But why?

Several times at tonight’s terrific kickoff of Portland’s new Online News Association chapter, guest speaker Mark Briggs quoted a variation on the line: "nonprofit isn’t a business model; it’s a tax status."

If that’s not a cliché yet, let’s hope it will be soon. It’s certainly true.

Nonprofit news companies are just businesses with a little extra flexibility over here and a little less over there. But as Oregon Public Broadcasting’s Toni Tabora-Roberts said after Briggs’ talk, the country’s most successful models of nonprofit local news – NPR, PBS and their affiliates – consider it unethical to compensate their "development" staff based on the size of the sponsorships they bring in.

I know bupkis about fundraising, let alone public broadcasting. But I know an assumption worth questioning when I see one.

Let’s grab this argument by both horns.

Of course! Nonprofits should treat fundraisers like salespeople and pay commissions when they land sponsorships

The argument:

Humans respond to incentives. The faster news economics change, the more important it will become for news organizations to reward entrepreneurial thinking and results. Paying on commission gives development officers clear incentives to invest time in new ventures, and helps organizations know when to pull the plug on bad ideas. It reminds everyone to be bold and fail fast. It gives managers the ability to tweak incentive structures in ways that encourage fundraising around a promising new idea.

Refusing to pay on commission for a job that basically comes down to advertising sales is a relic from the vanished era of scale. No journalism startup, nonprofit or otherwise, would dream of putting all its salespeople on flat salaries. By doing so, public broadcasters are riding the brakes of innovation.

No way! Public broadcasters know this game better than anybody, and they’ve got good reasons to not pay on commission

The argument:

Public radio sponsorships aren’t just ads. Sure, exposure is part of the package a sponsor is buying for their money. But a development officer is also selling warm fuzzies: The feeling of having supported a good cause. A sponsor can then share those warm fuzzies among its own executives, employees or customers.

Most nonprofit funders are ignorant of whether their money is being spent well. Almost all their information comes from their contact in the recipient organization: the development officer. Therefore a funder can’t get warm fuzzies without a close, trusting relationship with a development officer who they’re confident isn’t just out for a quick buck.

I’m already constructing the next round of arguments in my head, but that’s how the basics look to me.

(Creative Commons pledge drive photo by Indiana Public Media.)

1. Top
2. Why
3. How
4. Will
5. Guide
6. Best
7. Secret
8. Ultimate
9. Your
10. Worst
11. New
12. Future

Here’s a link to Thompson’s slideshow, titled “Dark secrets of the online overlords.” Like so many of the arguments I’ve found most persuasive in the last few years, much of this one consists of repeated examples of ways we should all do what Nick Denton is doing.

(via NiemanLab)

…it doesn’t matter how clever the opportunities are.

This is a simple point about the economics of local advertising, but it’s very important. I wish I’d understood it two years ago.

When I started a publishing business, I was told that you should generally not sell ad contracts for less than $100. At the time, I thought that was because ad salespeople priced their time more highly than I was willing to, and that I could bootstrap my way up by underpricing my time, like any respectable scab.

But here’s the thing: My time is only half of what’s at stake. The actual reason you shouldn’t sell for less than $100 is that if your product is worth less than $100, it will not be rational for advertisers to spend time buying your product.

I’m talking about the time required to evaluate an advertising opportunity, to run it past business partners, to obtain and transmit the graphical files, to settle on the message, to write the copy. These tasks sound piddly because they are. They’re obnoxious and time-consuming. That means that no business owner is going to do them unless there’s more than $100 in value at stake.

It doesn’t matter if the advertiser has no affordable alternatives. It doesn’t matter how great your product is. You know your product is great, but your advertiser doesn’t, and your advertisers have the right to evaluate your product. If you’ve designed a product that is so small that evaluating its worth is a losing proposition, then you have just deprived your advertiser of his or her rights.

Now, I’m not arguing that you should overprice your product. I’m arguing that you should make a product that’s worth a decent price.

Simply thinking smaller than everybody else isn’t going to work.

(Creative Commons stopwatch photo by purplemattfish.)

As the editor of a topical startup, I’m easily mistaken for an advocate on behalf of my audience. It’s true, there’s a strong resemblance: like an advocate, I start my day with the assumption that my audience deserves happiness and prosperity.

But this is the same assumption that starts the day for every media outlet in the world.

Here’s the difference between advocacy and journalism: Before doing anything, an advocate asks himself or herself: “What effect will this have?”

That’s the one question a journalist should almost never ask. There’s no quicker way to stifle an interesting or useful idea.

Using a social network isn’t rewarding until we invest time in it. More time, more reward.

What if social networks were TV channels circa 1948? The appearance of ABC doesn’t make me enjoy CBS or NBC less. But broadcast TV is capital intensive, so all 3 channels made money by delivering identical goods to a mass audience. Homogeny: road map to a vast wasteland.

Online social networks are built on a different type of capital — the aggregated time investments of their users. Google+, Twitter and Facebook are all trying to maximize that investment by offering identical functions to a general audience. User time investment has replaced airwave frequencies as the source of scarcity. The effect is homogeny.

“More time, more reward,” the cardinal rule of these early social media giants, is a broadcast mentality, even though the delivery system is digital.

This new ABC looks fine to me. But the next social networks that really matter — the ones that disrupt CBS and NBC rather than competing with them — will be the ones that figure out how to offer different sorts of rewards while demanding less capital from users: TNT, AMC, ESPN.

It’s small: just $5,000. We’re far from Success. But this is a success. It’s a start. And that, I’ve been learning, is the way nonprofits get built.

This situation is too new, and I’m too close to it, to draw many useful lessons from this. But here are a couple:

• We teamed up. This wouldn’t have happened without the support of a partner. As I wrote last year, entrepreneurial journalists aren’t just picking a niche to serve their advertisers or their audience. They’re also doing it because every niche already has institutions in it. Blessedly, we’ve found several institutions that we admire and admire us back. One of them suggested this collaboration.
• We aimed low. Last year, we applied unsuccessfully for a $25,000 startup grant from Knight. Though I sometimes dream about how easy this would have all been if we’d landed that, in retrospect I wouldn’t have awarded it to me, either. Whatever his journalism experience, an inexperienced business manager needs to learn to walk before he learns to run. Funders, I think, know this well.

By the way, this means we’re hiring.

That’s probably the best point I managed to make about the news business at Saturday’s Digital Journalism Portland conference. It was an honor to share a panel with Robert Wagner of Cascadia.fm and Barry Johnson of Oregon Arts Watch, talking about quitting our day jobs to have entrepreneurial babies.

The talking doesn’t really start until 1:00; my first bit is at 2:20, but if you’re watching you shouldn’t miss Barry and Rob, who are much more experienced in this stuff than I am, or moderator Melissa Chavez of to-be-launched Sexistential Magazine, who did a ton of advance work that clearly paid off.

The conference is a project of the great Abraham Hyatt, with video provided by the skills of Dr. Normal and Eitan Tsur.

Starting this summer, I’ll be leading a series of talks for the Oregon Humanities Conversation Project, a kick-ass initiative that sparks interesting cultural conversations around the state. Here’s the elevator pitch:

Two years after Clay Shirky predicted that "every town in this country of 500,000 or less" was likely to "sink into casual, endemic, civic corruption" fostered by the death of local newspapers, what’s the score? The continuing collapse of the media sequoias has created openings into which small-scale innovators, from MyEugene to BikePortland, are sprouting. But tomorrow’s news outlets, whose audiences and incentives are dramatically different than yesterday’s, will put new pressures on local civic culture.

 

"Old forest, new trees: Oregon’s new economics of local information" will use a hands-on exercise to explore the forces behind the shift from mass to niche media; sketch case studies from innovators around Oregon and the country; and highlight a key social problem faced by the new news media – the deep and growing asymmetry of information between rich and poor.

TOTALLY FUN, amirite? All my presentations, research and appearance schedule will be posted here on the blog, so expect to start hearing more around midsummer.

(Road-trip photo by Nicholas_T.)

Somehow, nobody has figured how to give all of us an incentive to let each other use the stock photos we’re already taking.

A couple months back I failed to fully communicate this concept to a friend at The Oregonian. Here’s another attempt:

• Any news organization, large or small, can add photos to the pool.
• Anyone can buy photos from the pool a la carte, or pay for a long-term membership.
• Photographers get a cut for each download.
• Regular contributors get discounted memberships.
• Marketing types could buy and use the photos, too – though they couldn’t contribute, because only documentary-style work could be uploaded.

That’s it! My Oregonian friend noted that, like many papers, they already offer a little-used page where you can buy old Oregonian photos. This is different! Here’s why:

• It’s a two-way service. Newspapers’ photos-for-sale stores, like print newspapers’, are one-way services: we make, you buy. The problem is that even a large daily newspaper doesn’t produce enough photos to reliably have one to offer for any occasion. Opening such a site to every photographer in town would increase volume. Like at Craigslist or Amazon, audience follows volume, and volume lets you lower prices, and lower prices bring more audience.
• It’d be catalogued and tagged like any modern stock-photo site.

This second bit, of course, is the big expense of stock-photo services and the big flaw in my plan. My hunch: the tagging and sorting would have to be done by software or by a low-wage worker abroad.

But here’s what I’m sure of: Somebody somewhere could use the photos currently sitting uselessly on my hard drive.

At end of the day, that’s a waste – the kind of waste that the Internet, sooner or later, will solve.

That information is called news. It’s quite scarce and it’s very useful.

But news isn’t the only kind of scarce, useful information. Ever since the local wiki I manage started pulling in search traffic, I’ve noticed something pretty interesting: about 30 percent of our search traffic comes from people’s names.

We’re not talking about Britney Spears here. We’re talking about Patricia McCaig, a political aide to Oregon Gov. John Kitzhaber, and Ted Buehler, a bicycle safety activist. They aren’t boring; they’re just not at all famous. They’re the most interesting hand you shook at the church picnic. They’re people who make it happen (whatever it is) without talking to the press or keeping a website of their own.

They’re people people are looking for.

Check out this chart of the 110 most popular Google searches leading to PortlandAfoot.org in the last 60 days:

Thirty-seven of those, or 34 percent (marked in red), were searches for people’s names. (For visibility’s sake, the vertical axis is a log scale.) If you don’t count Portland Afoot’s #1 search phrase, which is just the name of the site, people’s names accounted for 30 percent of Google-driven visits, too.

It turns out that people are looking for people quite a lot.

And – especially on the local level, I suspect – people are scarce.

(Extremely clever photo by an unknown photographer.)