One Nonprofit Press Is Ending a Productive Revenue Stream — Here’s Why

This story is based on an article by Joshua Benton for Neiman Lab.

Why is the Salt Lake Tribune planning to remove its news paywall? The organization, which converted from for-profit to nonprofit status in 2018, is focused on embracing its “nonprofit-ness,” which includes an assurance of access at the broadest possible level.

Paid access to the site brings an annual $2.6 million to the Tribune, comprising a relatively reliable 20% of its revenue mix. The plan is to convert paid subscriptions into regular voluntary donations, which have the extra (albeit limited) benefit to the donor of being tax deductible. Current subscribers will receive a message saying that their ongoing payments make them patrons of the news being made available to the community at large. A test of the program has indicated that most subscribers will remain enrolled when faced with the proposition, though some will naturally opt out.

This is a different framework for the relationship between readers and the site. Benton astutely comments, “At this late stage in the decline of the newspaper business model, a lot of digital subscribers are paying for civic reasons at least as much as practical ones,” so this may be a perfect opportunity to get in there and emphasize the civic purpose by aligning the income stream.

The quest for the right revenue mix has been more or less constant for nonprofits, and activity in this realm has become far more intense in the face of the direct and indirect effects of federal retrenchment. Many organizations have suddenly been pushed to examine their business models with an urgent and critical eye, looking at how accurately their program mixes and revenue sources match (or even advance) their real mission intentions. But nonprofits in some fields have been seeking new or transformative business models for years prior to this present era, and those dedicated to publishing or broadcasting news are among the frontrunners. There is no question this area has been impacted by federal cuts, as can be seen in public broadcasting. Even setting aside those receiving public funds, though, the struggle to support nonprofit news has persisted for decades; meanwhile, for-profit news producers and investors have wreaked havoc and cast doubt on their capacity to meet the public’s civic need for information.

It is instructive to look at the ways this search has progressed over the past 20+ years. Without going into too much detail, the original assumptions of funders in this field were faulty. They assumed the task would be more straightforward and short-term than it turned out to be — especially for smaller and more local newsrooms and those without extraordinarily heavy early capital investments. This story we are talking about today is, therefore, just one of several experiments in converting the public’s dependence on for-profit news outlets (often owned by wealthy investors) into reliance on a mix that includes a healthy portion of independent, nonprofit news. Such efforts have required sustained philanthropic commitment, which has manifested in many forms over the years, and this investment has finally, through an enormous amount of experimentation toward fitting models to markets, resulted in a growing number of ongoing successful and replicable test cases. Still, it’s also true that some of the more robust examples of success were well capitalized, and there may be an additional lesson for philanthropy to learn in that.