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My proposal for regional
online news trading posts

by Steve Earley

To the list of wide-eyed ideas about how to save journalism, you can add this one:

The problems

The industry is moving toward charging for at least some online content. It seems now to be more of a question of when than a question of if. But, whether outlets go with a freemium, metered or subscription approach, what should they charge? Users, initially, aren't going to be happy with any price, in part because they've been spoiled by free online content for so long, but also in part because news organizations are making the price up.

This goes back to the news industry's fundamental problem. News is valuable. Democracy would not function without it. Very few would deny that. But, because the industry's business model never charged customers directly for content, just how valuable has never been determined.

This and the assumption that customers won't pay for news has steered some toward the nonprofit model, which, already producing great journalism in places like San Diego and the Twin Cities, will be a part of the solution. I'd argue, however, that people will pay for news. After Napster, alleged experts said people wouldn't pay for music anymore. Then iTunes came along. News is every bit as valuable as music. If the industry can't find a market for it, it's not trying hard enough.

Actually, it doesn't have to try too hard. It doesn't have to look any further than iTunes, in fact. Why not make an iTunes for news? My idea is a little bit more complicated than that — it would be regional, not international, and publishers could name their own price — but essentially that's what I'm proposing.

In addition to establishing a market price for news, my idea, what I'm calling regional news trading posts, addresses the following issues:

• News spreads like wildfire online, often without any kind of mechanism to credit let alone compensate the original source.
• News organizations are sitting on reams of potentially useful information they have no incentive to publish.
• Citizen journalists can potentially help professional news gatherers, but the professionals don't trust them.
• It's difficult to demand, or even expect, too much from volunteers, which most citizen journalists are.
• Wire services are too expensive and not local enough.
• While news organizations whine about the difficulty of monetizing online content, they've barely scratched the surface when it comes to the microtargeting of ads.
  

My idea also challenges the inter-organization rivalries that have come to dictate so much of outlets' decision making. Yes, cross-town outlets should still try to one-up each other's coverage. The fear that the other guy might have it and you won't promotes more aggressive reporting, and, as a result, better journalism.

But, what about when you know everyone's going to have it, and, it's, let's face it, not that great a story? Is the opportunity cost of five news organizations sending five reporters to get the same canned quotes and staged photos from a police dog-and-pony show hyping a mid-level drug bust really serving the audience? How about four of those news organizations have the fifth cover the cops' theatrics while their reporters are off at the unemployment office, prisons and mental health parity bill hearings probing the root cause of their community's drug problem?

Or what about when you know you absolutely won't have it, but your audience expects you to have it, regardless of whether you or someone else reported it?

There are times when it makes sense for competitors to be each other's customers. This not only better serves the audience but also opens up a completely new revenue stream for news organizations.

The solution

I am proposing for-profit regional (probably no larger than a Nielsen market) online trading posts where institutional journalists, freelancers, citizen journalists, quasi-journalistic nonprofits and consumers trade news content like completed articles and videos and news gathering products and services like databases, source lists, reporting, editing and aggregation. Producers could charge whatever they wanted for their products or services or elect to trade them for products or services offered by another market participant. Membership would be free, with a valid credit card number.

In a way, my idea hearkens back to modern society's early coffee houses, where patrons would, essentially, barter for information.

For example, a news organization that can't afford to send a reporter to every school board meeting could enlist a blogger to serve as a stringer. The news organization could pay the blogger for his work or compensate him with something that he wants but can't produce on his own, like video interviews with all the school board candidates.

A public feedback system would provide a means of evaluating traders' credibility. And, everything uploaded to the trading post would be embedded with metadata identifying the original author, who else acquired rights to the product or service and how they're using it.

News consumers could likewise acquire completed or raw news products à la carte, likewise either paying for them with money — purchases being automatically deducted from the credit card they registered with — or with some kind of service, tagging user-submitted content, perhaps.

The trading post itself would earn revenue by charging a modest commission — 3 percent or less — on sales made on the network and by taking a cut of the ad revenue traded content generates. The market would also sell ads within the trading interface, which would include original content like industry trends and tips and customized recommendations for members based on their past behavior. All ads would be similarly micro-targeted based on users' browsing and trading habits.

The market would also share subscription revenue with producers it assigns to cable TV-like tiers, some of which would be marketed to news producers, others to consumers. Premium features for news producers — such as advanced analytics software, fully customizable storefronts, vanity storefront urls and customized trends reports — would provide additional monetization opportunities.

It is important to stress that the trading post would not be a walled garden. It would merely be a mechanism to bring buyers and sellers together and to track and monetize content as it roams the open Web.