July 7, 2017

Neal Gorenflo: Why Don’t Journalists Start Co-Ops?

Neal Gorenflo by Sebastiaan ter Burg - CC BY2.0 CROPPED

Conspicuously absent from the booming grassroots-sharing economy is the professional journalism sector. For some insight into this conundrum, I spoke to Neal Gorenflo, the executive director and co-founder of Shareable.net — a nonprofit solutions-news outlet covering innovations in resource sharing, new economies, and cities. Neal’s work also gets him in circulation as an adviser to mayors, communities, and civic organizations worldwide. He’s currently promoting the latest Shareable anthology, “Sharing Cities: Activating the Urban Commons.”

Watershed Media: It’s been said that journalists come from too libertarian a business environment (commercial mass media) to work in co-ops or collectives. It’s true that besides the Associated Press, there aren’t any notable/consequential news co-ops out there. Do you have a sense of why this may be the case?

Neal Gorenflo: Associated Press is not just a symbolic representation of cooperatives in the news industry. It’s a pillar of the industry, so shouldn’t be dismissed so easily. It should be regarded as an example to be built upon. It could also be a platform to build out from both up and down the value chain. And for all I know, there are many other examples. For instance, there is Positive News in the UK which recently converted to a cooperative.

The most important thing I’ve learned about cooperatives since starting Shareable is that it’s a much larger and more diverse sector than 99 percent of people think. It’s a vast universe unto itself. Tragically, public ignorance of them is vaster.

And I would start with questions that explore strengths rather than weaknesses, like what conditions in the news business make it ripe time to form news cooperatives?

WM: In that case, let’s talk about platform co-ops. What sort of opportunity does a platform co-op approach represent for news media, and for individual working journalists, who are already enterprising, self-motivated and trained communicators?

NG: First, we need to define what is meant by the term platform cooperative. Imagine Vox was owned and governed by its writers through a cooperative structure where each writer-member had one share, one vote. That would be a platform cooperative.

As to their prospects in the news industry, I think they have potential. Cooperatives tend to thrive in well-understood industries, and there are many journalists seeking jobs. Also, digital publishing doesn’t require a lot of capital, so it’s likely that members’ initial investment would be enough to get started, at least in a modest way.

Cooperatives could also likely compete effectively. They typically operate at a lower cost than traditional businesses because they don’t have an expensive management and investor layer to pay. This allows them to pay workers competitively while maintaining a cost advantage. This could help them compete in an industry with falling revenues.

This said, there has to be awareness and the will to pursue this option. It takes a lot of patience and persistence to get cooperative enterprises off the ground. There’s the extra overhead of an unfamiliar ownership and governance structure to deal with in addition to core business challenges, but once you get over the hump, cooperatives can be a big advantage.

WM: You say that digital publishing is not capital intensive. How does that break down? What sorts of financing strategies could journalists turn to for capitalizing a new co-op?

NG: It’s worth revisiting the fact that digital publishing doesn’t require a big, expensive printing plant and distribution network like traditional newspapers. There are also free online publishing tools from free websites to open source audio and video production software packages. You can also speak to sources around the world for free using Skype or Google Hangouts. These, along with other online collaboration tools, makes it possible to run a news operation without a newsroom.

So a good bit of the basic infrastructure cost has gone to zero. This makes it possible to spend more on reporting and reporters. That lends itself to a worker- and/or a consumer-cooperative financing and governance model.

The financial barriers to entry are low enough that reporters and/or their readers can self-fund a news organization. A multi-stakeholder cooperative — where there workers, consumers, and investors own and govern the cooperative together — might be the way to go.

I made it sound easy, but there are also new challenges like mastering search engine marketing, social media, and competing against other attractive mediums like video and online gaming. It might be cheaper to start a news organization, but it might be harder to stay in business. The media landscape is much more dynamic than in the golden age of newspapers. You need to be nimble, have ready access to specialized talent, and be super responsive to readers if not bring them into the news production process.

WM: You mentioned the opportunity to involve readers in the news production process. We’re seeing lots of engagement-driven stuff like that out there — Hearken, for example, aims to turn audiences into forces that influence newsroom decisions. But we’re still focused on attention in that model — and thus shy of a consumer or buyer co-op, which requires not just attention for whatever’s currently trending, but also intention by audiences to support something they need that may not be trending. What is the next step for audience engagement and empowerment in the civic-media equation?

NG: Well, the full package of audience engagement might look something like this — reading, sharing content, contributing to the production process in a variety of ways, and then having a say and a share in the actual enterprise. So a system that lets readers climb that ladder of engagement in a self-directed way and change their pattern of engagement when needed seems worth trying if we value independent media. The good news is that all the parts of this model exist, but haven’t been put together in one place yet.

WM: It’s surprising that there isn’t more co-op activity around journalism and mass media. Do you have any prognostication about how these alternative models might gain more traction?

NG: While there may be other examples like Positive News, I don’t know them. That doesn’t mean there isn’t a cooperative trend in media. I just don’t see it yet. It’s worth exploring further.

One strategy that’s being pursued in other industries is co-op conversion. This is an option workers at failing factories have pursued all over the world for decades. Retiring business owners are also increasingly selling their businesses to their employees. This is a big trend as boomers retire. Who knows, co-op conversion could work more broadly in the news business too.

If we’re talking about media in general, then take a look at Stocksy, an online stock photo marketplace owned by its 900 contributing photographers. They have been operating for a few years, are doing around $10 million in annual revenue, and recently distributed surplus (the equivalent to profit) to members-photographers for the first time. Their site is gorgeous. It appears to be a well run business. It’s one of the best examples for other media businesses to explore.

As to the future, it’s eternally TBD. I believe journalists have the capacity to forge their own destiny. They are in many ways already. Platform cooperatives are one more tool in the toolbox. It’s up to them to use it.