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From Paywall to Non-Profit: How Publicly Funded Journalism Helps the Industry

The journalism industry has developed multiple streams of income for reporters to deliver timely and professional news to its community. From advertising in print, to digital subscriptions, sponsored content, and hosting events, publications have changed their business models to keep up with the digitalization of journalism. The most recent solution to the industry’s spiral offers the exact opposite of this pattern — non-profit journalism. 

In an opinion piece published by The Narwhal, a young and reputable example of publicly funded journalism, Emma Gilchrist writes that the Canadian government’s $600 million media fund recognizes the significance of journalism by incentivising economic support. While the authenticity of these journalism non-profits’ independence from the state is questioned by some citizens and journalists alike, I believe a non-profit model can be separate from the state and in some cases, serve the public better than traditional media. My thesis presents that: media non-profits give small-scale newsrooms the opportunity to reach a larger audience and the opportunity for journalism to survive without conforming to the competitive commercialization of the digital industry.

Without public funding for newsrooms, some news outlets would not have the resources to produce strong journalism for their communities. According to Statista, after peaking at $3.88 billion in newspaper ad revenue in 2007 and 2008, Canadian outlets fell to $1.63 billion in 2018. The Toronto Star’s subscription revenue sat at $29.5 million as of May 2019, according to a Star article. Despite this, John Honderich, chair of the Star board, admits their struggle to stay afloat in Brett Popplewell’s Walrus in-depth analysis of the Star’s plan to save itself, saying they are “very, very, close to the end.” If these are the national figures journalism is dealing with, including one of Canada’s prominent news organizations, one can only imagine the hurdles smaller, local publications face. 

In the last 10 years, over 250 news outlets have closed, according to data from Local News Research Project. To combat this, the Canadian government’s non-profit media investment has introduced refundable tax credits and charitable status for qualifying journalism organizations, and non-refundable tax credits for Canadians who buy digital subscriptions, according to Business Wire. With credits to subsidize labour costs, journalism organizations can produce media without running a deficit. As their working capabilities increase, their content increases. Coupled with content, the incentives to subscribe to these newsrooms will gather a larger readership they would otherwise have struggled to accumulate based on salaries, ads, and digital subscriptions of bigger publications.

When newsrooms can focus on producing credible and relevant content for their communities rather than fighting for the same top stories to encourage audiences to pay for subscriptions, other great stories can be told. The Globe and Mail’s section on SNC-Lavalin stories reports 72 articles from February 2019 until present. As a top Canadian news outlet with digital subscriptions starting at $1.99 per week for two years before jumping to $6.99, one can imagine how much money they generated with frequent updates to engage public discussion and readers enough to opt in to readership. Though the SNC-Lavalin affair with the PMO is an important story, one can imagine how many stories were neglected in the interim. 

In her New Yorker analysis, Jill Lepore reports why push-notifications on news updates with stories sharing national attention is unhelpful because it focuses on the “sensational, exception, negative, recent, and incidental”, which makes the “ordinary, positive, historical, and systematic” seemingly disappear. While The Globe and Mail covered allegations and demotions of actors involved, The Narwhal published an in-depth piece on the UN instructing Canada to suspend Site C dam construction due to its violation of Indigenous rights. It’s audience still had the option to read outside the SNC-Lavalin affair with other strong pieces like an investigation of oil and gas companies owing Albertans $20 million in unpaid land rent.

The Narwhal, which launched in May 2018, is supported by 1000 readers, according to Gilchrist. Because of its community, The Narwhal did not have to compete to cover an oversaturated topic among Canada’s big news organizations for digital subscriptions. The non-profit news model, according to The Narwhal co-founder Carol Linnitt, “drives [them] to reconnect with our readers to deliver the news in deeper and more meaningful ways.” A recipient of four Canadian Online Publishing Awards in their first year of publication and among CBC News, CBC Radio and Huffington Post Canada for three Canadian Association of Journalists awards, The Narwhal is an example of the high calibre of work non-profit media can produce. In fact, The Narwhal is the sole Canadian news non-profit welcomed into the American Institute for Nonprofit News. 

Victor Packard’s Jacobin article identifies this time as an opportunity to reframe the media instead of using the increased funds to mirror the old commercial model. Newsrooms can reflect the diversity of their audiences in their increased readership and employment, and the development of strong beats, as readers make conscious decisions to pay for news that interests and helps them — while benefiting on their taxes at the end of the year.  A non-profit news model can slow the fast-paced news world to focus on telling a story well for loyal audiences, rather than adhering to the dominating stories for retweets and perpetuating a news culture forcing people to be in the loop on a minute-by-minute basis.

Despite the benefits of a publically-funded media presence, there is healthy skepticism about newsrooms’ economic sustenance being led by a government they are supposed to hold accountable and cover objectively. Andrew Coyne makes a case for this in a National Post article suspecting how journalists will cover election as the Conservative Party opposes the media funding helping them do their job against the Liberal Party proposing the plan to “save” the business. 

Referencing freedom of the press to address the healthy distance between government and journalism, it is in Canadian government’s interest to help sustain journalism, regardless of the issues they could highlight for Canadian citizens. The government is having increased discussions about regulating Facebook and Google, as misinformation continues to spread unchecked, according to Josh Wingrove’s Fortune article. Having non-profit media organizations Canadian citizens can trust and turn to for political, environmental, and economic news is crucial. 

In a CBC poll iPolitics’ Marco Vigliotti reported, 79 per cent trust information on social media less than the content from professional journalists. The reputation of the CBC defends itself as Canada’s national broadcasting challenging all federal parties in its coverage despite its public funding. Acquiring $650 million from 2014-2015 through public funds, according to Canada Media Guild, which dropped from $1078 million in 1990-1991. Acknowledging this decrease, the Canadian Media Guild reports that CBC President Catherine Tait saying she does not want to be, “vulnerable to shifts in the marketplace and government.” Noting this, placing power in the people who the stories will serve through the media plan is imperative. 

Identifying the organizations who are given the funds to transition into the non-profit model are not addressed by government officials, but an independent panel of media organizations, from National Ethnic Press and Media Council of Canada to the Association de la presse francophone and News Media Canada. Their function is to weigh a non-profit’s eligibility based on regularly employing at least two journalists for original news production and good journalistic practices. Instead of money incentivised by the government being seen as undemocratic, Pickard identifies it as a pillar of democracy, as it is an opportunity for the government to protect the public’s interest and ensure they have access to factual news. The government is providing news outlets with a mechanism to do their job and citizens the chance to choose who to engage with: helping them civically and economically.

Emma Gilchrist’s article on the Canadian government’s support of the journalism industry emphasizes the significance of its democratic function in our society. While the $600 million plan was introduced because of the changes journalists and publications had to endure because of advances in technology and the internet, its inception has the opportunity to change the status quo within the industry. From pages full of ads to sales on digital subscriptions, editorial content sponsored by businesses, and expensive events vying for revenue and audience recruitment, non-profit journalism removes monetary competition, so quality is the primary concern. Though some may worry about the separation from government, the independent panel evaluation and the knowledge of having a journalism system to keep citizens informed and a system of check and balances for internal government conflict. Without the pressure of having the biggest story first and dismissing local stories to cast a larger net of influence to stay afloat, journalism can serve its audience again.


Journalism & Poli Sci '20. I love books, goats, breakfast foods, and spend too much time refreshing my blog: https://sherlynassam.wixsite.com/sail