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Addressing Deficits: How Crowdfunded Journalists Find Success in a Restructuring Media Industry

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Addressing Deficits: How Crowdfunded Journalists Find Success in a Restructuring Media Industry Addressing Deficits: How Crowdfunded Journalists Find Success in a Restructuring Media Industry Kenneth Gibson A Thesis in The Department of Journalism Presented in Partial Fulfillment of the Requirements For the Degree of Master of Arts (Digital Innovation in Journalism Studies) at Concordia University Montreal, Quebec, Canada August 2020 ©Kenneth Gibson, 2020 CONCORDIA UNIVERSITY School of Graduate Studies This is to certify that the thesis prepared By: Kenneth Gibson Entitled: Addressing Deficits: How Crowdfunded Journalists Find Success in a Restructuring Media Industry and submitted in partial fulfillment of the requirements for the degree of Master of Arts (Digital Innovation in Journalism Studies) complies with the regulation of the University and meet the accepted standards with respect to originality and quality. Signed by the final examining committee: ___________________________________ Chair Dr. David Secko ___________________________________ Supervisor Dr. Andrea Hunter ___________________________________ Examiner Dr. Elyse Amend Approved by _________________________________________________ Dr. David Secko _________________________________________________ Dr. Pascale Sicotte Date ______________________________________________ ABSTRACT Addressing Deficits: How Crowdfunded Journalists Find Success in a Restructuring Media Industry Kenneth Gibson This thesis examines crowdfunded journalists’ beliefs about the most effective ways to appeal to potential financial supporters and successfully meet their funding goals. In the wake of continually worsening economic restructuring in the journalism industry and the disruption of journalism’s perennial advertising-based business model (Anderson, Shirky, & Bell, 2014; Kaye & Quinn, 2010), crowdfunding has emerged over the last decade as a possible alternative business model (Hunter, 2016). The financial crisis has resulted in cutbacks in coverage and staff, and an erosion of journalism’s societal role as the fourth estate (Gasher et al., 2016; McChesney & Pickard, 2011; Mensing, 2007; Picard, 2014; Public Policy Forum, 2017). The existing literature on what motivates people to support crowdfunded journalism has looked at the question primarily from supporters’ point of view (Aitamurto, 2011; Jian & Shin. 2015). However, there has been little research on what crowdfunded journalists themselves think are the best ways to motivate or appeal to potential financial supporters. Using in-depth, semi- structured interviews (as per Castillo-Montoya, 2016 and Leech, 2002) with 10 Canadian journalists who have engaged in crowdfunding for new media outlets, this thesis examines key value propositions the journalists use to motivate their audiences, the general obstacles they face when convincing their audience to pay, as well as promotional techniques and other related practices that contribute to successfully reaching their funding goals. The interviews were analyzed thematically (as per Guest, MacQueen, & Namey, 2012) using a constant comparative method and open coding to track emerging themes. The results show that respondents are crafting value propositions by alluding to deficits created by industry restructuring, and the negative impact this restructuring has on democratic society. iii ACKNOWLEDGEMENTS I would like to extend my sincerest gratitude and thanks to my thesis advisor Dr. Andrea Hunter of the Department of Journalism at Concordia University for their patience and diligence in guiding me toward the completion of this thesis and getting it across the finish line in the final few months. Dr. Hunter showed immense trust and faith in my ideas and writing, which gave me the confidence to push forward. Thank you to my committee members, Dr. Elyse Amend and Dr. David Secko, for giving their time to offer feedback at various stages of completing this thesis. Much thanks, also, to my friend David Elliott for letting my use their apartment as an office space in the Winter of 2018 while completing my thesis proposal. Thank you to all my friends for providing moral support and encouragement during the completion of this project. I would also like to acknowledge my gratitude for financial assistant provided by the department during the phases of course work and research design. iv TABLE OF CONTENTS LIST OF TABLES…………………………………………………………………....vi CHAPTER I: INTRODUCTION…………………………………………………….1 CHAPTER II: LITERATURE REVIEW…………………………………………… 8 CHAPTER III: METHODOLOGY………………………………………………….24 CHAPTER IV: RESULTS…………………………………………………………...41 CHAPTER V: DISCUSSION AND CONCLUSION………………………………..89 REFERENCES………………………………………………………………………103 APPENDICES……………………………………………………………………….119 v LIST OF TABLES Table 1 – Description of codes produced from initial deductive coding based on research design………………………………………………………………………….33 Table 2 – Description of codebook and final themes and subthemes……………………36 vi Chapter 1: Introduction The digital transformation of commercial publishing in the 1990s caused many structural changes in journalism’s long-established advertising-based business model (Bollinger, 2010; Fuller, 2012; Jones, 2010; McChesney & Pickard, 2011). While the shift away from print and broadcast consumption to digital media has sparked many debates about how the form of journalistic work should change, a more urgent question seems to be how news companies will innovate new business models to rehabilitate their profitability, regain financial stability and assure continued life for journalism as an institution of civil society. Innovations in media distribution and production technology over the last 30 years lowered the barrier of entry to starting a media outlet, slowly increasing competition in the marketplace and the amount of content being published (Anderson, Shirky, & Bell, 2014; Oestreicher-Singer & Zalmanson, 2012). There are also few geographic limitations on the audience online publishers can reach (Kaye & Quinn, 2010). Legacy news companies struggled to monetize their own content online as the explosion of media via the commercial World Wide Web was happening; online advertising rates were established at a fraction of print rates when the commercial web first took off and have not significantly increased in the last 20 years (Mensing 2007; Moses, 2014). Publishers currently struggle to compete with data-driven programmatic advertising that Google and Facebook can offer. These two companies now dominate the online advertising industry generally, taking in around 60 percent of all online advertising revenue (Mitchell, Holcomb, & Weisel, 2016). There has been some experimentation with online subscriptions, metered paywalls, and other payment models. However, the public has come to expect online content to be free, and changing that mindset has proven difficult (Carvajal, García-Avilés, & González, 2012; Chyi, 2005, 2012; Graybeal & Hayes, 2011; Halpape, 2011; Hunter, 2015; Kaye & Quinn, 2010; Ladson & Lee, 2017; Picard, 2000). Only the largest and most well-known news brands, such as The New York Times have recently been successful in achieving financial sustainability through reader subscriptions (Scire, 2020a). The contemporary financial situation for even the largest “digital-native” news organizations also looks grim. Companies once considered to be among the few that had “figured out” how to make money is a digital news world through strategies such as native advertising, or video advertising, have been laying off employees in large numbers, with 1 Buzzfeed and Huffpost laying off 1,000 employees between the two companies in January 2019 (Helmore, 2019). The economic instability brought on by the COVID-19 pandemic has led to even more cutbacks, layoffs, and furloughing of staff. A survey by the Internet Advertising Bureau found that a large majority of online publishers in the U.S. say they have had advertising deals cancelled or paused since the beginning of the pandemic (IAB Proprietary Research, 2020). Buzzfeed announced pay cuts of between five and 10 percent for staff and between 14 and 15 percent for executives (Tani, 2020) and furloughed 68 staff members (Smith, 2020); they also cancelled their morning news show after its partner, Twitter, pulled funding (Scire, 2020b). Vice laid off 155 staff worldwide (Nover, 2020) and cut pay for remaining staff (Spangler, 2020). Vox media put 100 staff members on furlough for three months in April 2020 (Flynn, 2020). Condé Nast, publisher of magazines Vogue, The New Yorker, Wired, GQ, and Vanity Fair, as well as digital-only publications like Ars Technica, Glamour and Pitchfork, furloughed staff with plans to lay off hundreds (Barber, 2020). As of May 1st, 2020, 36,000 news media workers had been laid off, furloughed, or had their pay cut (Tracy, 2020). In Canada, all shares in the Toronto Star’s publicly traded parent company Torstar Corp. were sold to a private venture capital firm for approximately 5 percent of what they were worth a decade ago (Deschamps, 2020). John Honderich, the chair of the board of Torstar, and former publisher of the paper from 1994 to 2004, cited COVID-19 as worsening existing economic woes at the paper and hastening the decision to sell (Honderich, 2020). Saltwire Network Inc, a newspaper chain of 27 newspapers in Atlantic Canada owned by the Halifax Chronicle Herald, laid off 109 employees in June 2020 (Benjamin, 2020). Prior to the current economic crisis, the journalism industry experienced a similar economic contraction, resulting in closures and layoffs, in the wake of the 2008 financial crisis (Williams,
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