Spot.Us Case Study Shows Impact of Crowdfunding on Journalism

Platforms such as Spot.Us and Kickstarter have shown that crowdfunding can work as a financing mechanism for journalism. We will likely see more crowdfunded stories in the future, which means it's important study how crowdfunding impacts journalism and the role and work of a journalist.

I'm currently in the process of completing a Ph.D. project about collective intelligence in journalism, and my case study about Spot.Us attempts to address these issues. I interviewed 15 Spot.Us donors and reporters for the study, which I presented last week in the form of a research paper at IJ-7, the Seventh Conference on Innovation Journalism at Stanford.

This is the first of two blog posts based on my paper. In this post, I offer five observations on how the crowdfunded process impacts journalism from the reporter's and donor's point of view. The quotations below are taken from the interviews I conducted with Spot.Us reporters and donors.

The Reporter's Point of View

Donating bonds readers to reporters -- Donating is a significant act that bonds reporters to the community members (a.k.a. readers). Reporters said it's very motivating to see that the community is willing to support their work. This is how one Spot.Us reporter described the feeling: "It feels great. It feels gratifying ... And seeing somebody paying $20 for a story -- it is way more than 20 cents." Reporters described the act of donating as "heartening," "gratifying" and "personally motivating, beyond professionally motivating." They consider the donors as their supporters. For them, donating is an act that supports their work and the topics they are working on.

Strong sense of responsibility -- The connection created by donations develops a strong sense of responsibility within the reporters. Reporters described this as being different from the feeling of responsibility that comes with a traditional assignment. It goes beyond the usual feelings of "professional responsibility." A Spot.Us reporter explained how this additional level of responsibility felt to her: "It is more than having it written in a nice style and formatted properly, things you worry about for an editor. You worry more about the accuracy, really honest reporting and presenting the issues correctly, because these people have directly invested in you."

Direct connection to the readers -- Rather than writing for an editor, reporters said they feel as though they're writing for the community. They find it rewarding to have a direct connection to readers, and to know who the readers are. One reporter said: "When I started working on the story [for Spot.us] I already knew who the readers are, whereas when writing a usual story [in a traditional journalism model] sometimes it feels like writing for a black hole."


Discomfort with pitching -- Spot.Us reporters don't feel comfortable pitching in public. For example, they feel hesitant to reach out to their social networks to raise awareness of their pitch. "I'm a journalist, not a salesperson," said one reporter. "I can't make myself go out and promote my pitch." Another reporter compared pitch promotion to begging by saying it's like asking for spare change by shaking a tin can on the street. Traditionally, journalists pitch directly to editors rather than to the public. Reporters said they would feel more comfortable promoting their pitch in public if Spot.Us organized promotional events that they could participate in.

Freedom to experiment -- Reporters said Spot.Us is more than just a way to finance their work; they see it as an opportunity to experiment with new methods of journalism, and an opportunity to experiment with tools such as video and infographics. The platform gives the reporters freedom they have been longing for.

The Donor's Point of View

Donating doesn't bind donors -- Donating doesn't bind donors as strongly as it binds journalists. After donating to a story, donors often don't return to the Spot.Us site to read the final work. They are more likely to stay connected with the story process if they receive notifications from Spot.Us, but even then the connection remains loose. "I'm not actually engaged with what has happened on the site," one donor said. "I will wait to get the email [telling me] here's the story done, here you are, here's the output of it. A part of it is that I'm not incredibly close to these stories."
spotusdonor.jpg Not eager to leave comments, submit tips -- Donors are not eager to participate in ways other than donating. They usually said that they don't have enough knowledge to submit tips to a story. One donor put it this way: "I participated by donating. I don't have so much to say about the topic, and I'm not used to leaving comments on websites." The donors rarely interacted with the journalists, even though Spot.Us encourages readers to do so.



Donating to a good cause -- Donors tend to support stories that have relevancy or connection to their lives. However, the primary reason for donating seems to be that they want to support a healthy society, and they consider journalism to be an essential element of this. Donating is more about supporting a good cause or the common good, rather than supporting a specific story pitch. Donors do not expect a master journalistic piece for their donation, though they are happy if that happens. "I don't think I'm gonna get anything [for my donation]," said one donor. "I'll learn something out of the process ... I consider this as a donation for the common good, more than anything else, or any kind of personal gain."

Donating to change the world -- Donors hope the stories they support will make a difference in society. They see articles as a way to produce change for the better in society by revealing wrongdoings or inequalities.

Donating builds one's identity -- The act of donating to a pitch helps builds one's sense of personal identity. Donors who are on Twitter usually tweeted after they had donated. Some donors said the act of donation made them feel part of the community, even though they were unable to define what that community is.

In my next blog post, I will discuss and analyze what these observations mean for journalism. For more information about the study or for the full paper, please contact me at tanja.aitamurto at gmail.com or on Twitter as @tanjaaita.

Tanja Aitamurto is a journalist and a Ph.D. student studying collective intelligence in journalism. She has studied innovation journalism at Stanford, and has degrees in journalism, social sciences, and linguistics. Tanja advises media companies and non-profit organizations about the changes in the field of communication. As a journalist, she specializes in business and technology. She contributes mainly to the Huffington Post and to the Helsingin Sanomat, the leading daily newspaper in Finland, as well as to the Finnish Broadcasting Company. Tanja splits her time between San Francisco and Finland, her home country.

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Can Financial Firms Use ‘Hot News Doctrine’ to Stifle Aggregators?

Traditional print newspapers and magazines are experiencing upheaval thanks to the rise of the Internet, but they are not the only information providers facing serious challenges. Even before the tumult created by the recent recession, major financial firms were struggling with the effects of competition from online financial news aggregation services aimed at investors. In some cases, these online services have obtained and disseminated the firms' most closely held, time-sensitive and valuable information product: The daily stock recommendations generated by their financial analysts.

The battles fought by several of those firms (Barclays Capital, Mogan Stanley and Merrill Lynch) are detailed in the recent federal district court ruling in Barclays Capital, Inc., v. Theflyonthewall.com (S.D.N.Y. Mar. 18, 2010). The firms won a big victory when federal judge Denise Cote, relying on the "hot news" misappropriation doctrine recognized under New York state law, issued an order limiting the republication of the firms' stock recommendations by the defendant, financial news aggregator theflyonthewall.com ("Fly").

Fly countered with a plea [PDF] to the the U.S. Court of Appeals for the Second Circuit that the enforcement of the injunction would force it out of business. In a dramatic turn, on May 19 the appeals court granted a stay [PDF] of the injunction and a rare expedited appeal, calling for briefs to be filed by July 26.

This case about the hot news doctrine has now itself become "hot news."

The Hot News Doctrine

As previously written on MediaShift, the "hot news" misappropriation doctrine is a legal principle first recognized in the early twentieth century when the Associated Press news service sued a rival service for paying off AP employees to pass on early versions of stories that were intended for West Coast newspapers. The rival service rewrote the stories to avoid claims of copyright infringement, and then sold them to West Coast news outlets.

The U.S. Supreme Court ruled in 1918 in International News Service v. Associated Press, that the AP had a right in the news content that it gathered that was distinct from its rights under copyright law: "the peculiar value of news is in the spreading of it while it is fresh," the Court famously commented.

With a bow to the First Amendment, the Court distinguished an individual's right to disseminate information contained in a newspaper once published from a business competitor's act of appropriation of material that had been acquired through expenditure of labor, skill and money. The Court concluded that the AP could sue on the theory that the rival's conduct constituted "unfair competition in business." Although the ruling was later criticized and challenged, the U.S. Court of Appeals for the Second Circuit reaffirmed its viability in 1997 in National Basketball Association v. Motorola, Inc., a case involving transmission of basketball scores.

The Barclays case is the first time that the Second Circuit has had an opportunity to consider the hot news doctrine in the context of the Internet age, which began picking up steam just after the ruling in NBA v. Motorola.

Current views on the viability of the hot news doctrine are mixed. The doctrine exists in tension with First Amendment values that protect the right to freely disseminate facts, and with the limits of copyright law, which do not extend to mere facts but only to the expression of facts. Nevertheless, the federalization of the hot news doctrine (which currently has been recognized only in a handful of states) has been proposed as a tool to support the efforts of traditional media to protect their content from online competition. That and other proposals to support traditional journalism made it into a recently released FTC Staff Discussion Draft [PDF] that summarized the discussions at the FTC workshops on the future of journalism.

The Value of Timely Financial Information

The Barclays opinion demonstrates the value of hot financial news, and the effects that unauthorized dissemination of that news can have on the financial firms that prepare and market it.

barclays_logo.gifAt issue in Barclays is the information contained in reports prepared by the financial firms for their largest and most lucrative customers and disseminated as "actionable recommendations" -- recommendations to buy, sell or hold a stock. As the district court explained, the firms' recommendations are not casually made; they are the product of the efforts of a large staff of analysts and related functionaries who acquire, sift and compile information on an ongoing basis, at great cost and expense.

The recommendations yield value for the financial firms primarily in the form of fees on the trades made by customers who frequently use the trading arm of the financial firm to make a trade on that recommendation. The value of the recommendations to the customers is the timeliness of the information: It is typically disseminated to them between midnight and 7 a.m., before the opening of the New York Stock Exchange. And it is significant as well that the reputation of the big firm analysts is such that their recommendations are themselves news and may move the market price of a stock significantly and in a very short period of time once widely known. Having those recommendations before market opening can provide the firms' clients with "an early informational advantage," as the court commented. The value of the recommendations derive not just from the quality of the information, but the "exclusivity and timeliness" of it.

To protect the value of this "informational advantage," the firms have implemented elaborate systems aimed at limiting access to the recommendations, including the use of password-protected proprietary Internet platforms, and licensing provisions that narrowly limit the right to disseminate the reports and forbid their redistribution to unauthorized parties. The district court described other technologies that are used to control access and dissemination, including blocking access to the firms' proprietary systems from certain websites and social networking platforms, and the use of personalized, encrypted URLs to deliver information to clients. (This makes it easier to track down the source of leaked reports.)

Despite these efforts, online financial news aggregators have been able to gain access to recommendations in advance of their public release. Fly, the district court found, was one of the first online financial news subscription services to engage in the practice of systematically obtaining and disseminating the actionable recommendations of traditional financial firms. Until the institution of the Barclays lawsuit in 2005, Fly's source of these recommendations was employees of the financial firms, who provided them despite the fact that they were not authorized to do so. After the litigation commenced, Fly changed its tactics; but it was still able frequently to obtain those recommendations, often from licensees of the information, and disseminate the recommendations to its subscribers before the financial markets' opening bell.

The Impact on Financial Firms

According to the district court opinion, the aggregators' activities have had an impact on the financial firms' business model and revenue generation, a finding critical to the analysis of one of the key elements of the hot news doctrine: Whether the "free riding" by Fly and the other online services on the financial firm's efforts in generating their actionable recommendations "would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened." This element of the hot news doctrine, the court found, implicates the public interest in protecting "socially valuable products or services in danger of being under-produced."

The court ruled resoundingly in the financial firms' favor on this point, crediting the firms' evidence that they had cut their analyst staff and budgets significantly because, in addition to other factors, the analysts' reports were no longer the driving force behind the generation of commission revenue to the extent that they had been previously.

"With clients able to review the Firms' recommendations and even research reports through other sources, the research department have been handicapped in their ability to argue for their historical share of the Firms' overall budgets," the court found, resulting in cuts of from 20 percent to half or more over the past decade.

The conduct of Fly and the other online news aggregators, the court concluded, threatens the ability of the firms' to monetize their research and continue to produce it. In evaluating the appropriateness of an injunction, the court further commented that this activity "is a valuable social good," and "plays a vital role in modern capital markets by helping to disclose information material to the market, to price stocks more fairly and, as a result, to produce a more efficient allocation of capital."

The Injunction

The injunction crafted by Judge Cote was carefully aimed at the time period that the financial firms identified as most critical to maintaining the value of its recommendations. Fly was enjoined from disseminating the firms' pre-opening recommendations in most cases before one-half hour after the opening of the New York Stock Exchange. The court also provided for a re-evaluation of the injunction after a one-year period, to determine whether the financial firms have taken action against other news aggregators. It would be inequitable, the court found, to enjoin Fly from publication of the firms' recommendations if the firms fail to take action against others engaged in the same conduct.

Conclusion

The result in Barclays v. Theflyonthewall.com is likely to be important not only for financial firms seeking to protect analysts' recommendations, but for general news outlets as well. A reaffirmation of the viability of the "hot news" doctrine by the Second Circuit could spur additional lawsuits and would probably bolster the position of advocates for enacting the doctrine on a nationwide basis. If the ruling is overturned, the legal avenues available to content owners seeking to protect their content from aggregation services will have been further narrowed.
**

UPDATE**: The importance of this dispute is reflected in the filing of several amicus (friend of the court) briefs. The brief filed jointly by the Electronic Frontier Foundation, the Citizen Media Law Project of the Berkman Center for Internet and Society at Harvard University and Public Citizen asks the court to focus on the strong First Amendment interests at issue in the case. Google and Twitter have also filed a joint brief supporting Fly's position, citing both First Amendment and copyright concerns. Both Dow Jones, Inc., singly, and a group of media companies including the Associated Press, Time, Inc., The New York Times Co. and the Washington Post have also filed amicus briefs.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

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4 Minute Roundup: iPhone 4 vs. Android Phones

In this week's 4MR podcast I consider the new iPhone 4 announced by Apple, with a sleeker design, longer battery life, "retina display" and a front-facing camera for video calls. How will the iPhone stack up against popular Android phones such as the new 4G HTC Evo and the Motorola Droid? I talked with CNET associate editor Nicole Lee to discuss the pros and cons of the new iPhone.

Check it out:

4mrbareaudio61110.mp3

>>> Subscribe to 4MR <<<

>>> Subscribe to 4MR via iTunes <<<

Listen to my entire interview with CNET's Nicole Lee:

nicole lee final.mp3

Background music is "What the World Needs" by the The Ukelele Hipster Kings via PodSafe Music Network.

Here are some links to related sites and stories mentioned in the podcast:

iPhone 4 vs. HTC Evo vs. Droid Incredible at Mashable

Sprint CFO - HTC EVO can take on iPhone 4 at News.com

Dialed In - iPhone 4 versus HTC Evo 4G at News.com

4 carriers and 4 super smartphones - which is your favorite? at ZDNet

HTC EVO 4G for Sprint Review at MobileCrunch

iPhone 4's 'Retina' Display Claims Are False Marketing at Wired News

iPhone 4 multitasking will disappoint at Computerworld

Apple previews iPhone OS 4, adds multitasking at Computerworld

Also, be sure to vote in our poll about choosing iPhone or Android:


Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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How Josh & Chuck Made ‘Stuff You Should Know’ a Hit Podcast

Perhaps you were hunting around iTunes one day and came across a list of the top audio podcasts. There in the top five among the usual suspects from NPR was something called Stuff You Should Know. And once you started listening, you were hooked on the congenial chit-chat between hosts Josh Clark and Chuck Bryant, senior writers at HowStuffWorks.com (owned by Discovery Communications). And the topics, oh the topics, with one outdoing the next: How flamethrowers work, how you clean up an oil spill, and how hard is it to steal a work of art.

Stuff You Should Know About 'Stuff You Should Know'

> The podcast was first started in April 2008 with Josh Clark as host with rotating co-hosts, with Chuck Bryant joining him to form the dynamic duo in August 2008.

> They are not experts. Really, they're not.

> There's a TV show in its second season on Discovery Channel based on HowStuffWorks.com, but Josh & Chuck aren't involved with it. They would like to do something like that one day.

> They have made more than 250 podcast episodes, and it has peaked at #1 on iTunes among all podcasts.

> The shows take as long as they take. A show on cliff diving clocked in at 27:19 while a show on serial killers took 44:41.

> In April 2010, the podcast had more than 3.5 million downloads. How do I know? Josh & Chuck's PR person told me that.

> Josh & Chuck still write for HowStuffWorks.com, and have become senior writers. They don't have the time to start another podcast, but do have a blog and would love to take a live show around the country based on an upcoming audiobook.

I had the pleasure of talking with Josh & Chuck recently in a wide-ranging phone chat, and the following is an edited version of that conversation.

Q&A

How did you get started with the podcast?

Chuck Bryant: Josh and I were both initially hired as writers, which is what we continue to do, for HowStuffWorks.com. We did that for a solid year before the podcast started. Josh was approached by our editor in chief to start the podcast. Josh even thought of the name, "Stuff You Should Know."

Josh Clark: Yup, I did ... HowStuffWorks is perfect for this kind of media and they wanted to expand the brand a bit [with a podcast]. I had no idea how to do it, and Chuck you didn't know how to do it?

Chuck: No.

Josh: And, frankly, to be honest I had never listened to an actual podcast before we started making one. Luckily we had a great producer and we were put together [as a team] and it worked out. We were surprised as anyone, probably moreso, that it's worked as well as it has.

stuffyoushouldknow logo.jpg

Chuck: The great thing about it was that there was no pressure at all at the beginning. We were writers for the website and that wasn't going anywhere, so if the podcast failed miserably they would have shut it down and we would have gone back to writing. We have a great company and a parent company Discovery Communications [that allowed us] to let it grow organically, by word of mouth, and it's been a big success.

Josh: We found the only real pressure is when we are above Ira Glass in the iTunes ranking. Otherwise, we're fine and feel like we can do whatever we want.

Chuck explains why he think podcasting has staying power even with the rise of video:

sxykpodcast.mp3

Were you the first podcast produced for HowStuffWorks?

Josh: We were the first one and it was a shot in the dark. It started to take off like a rocket. So they said, "Let's get everyone on the content side doing podcasts." We had our history podcast that started out as "Fact or Fiction" and I played the gullible rube who would say, "I heard this about this historical event. Is that true?" My co-host would say whether it's fact or fiction, or would say -- and this would rile people up -- "that's faction!" That went the way of the dinosaur pretty quickly and was replaced by "Stuff You Missed in History Class," which evolved out of that and has been very successful.

We have TechStuff, which is a great tech podcast. It has a great following, and the guys, Chris and Jonathan, are perfect foils for one another. They're very subdued and rambunctious, respectively. We now have 10 total podcasts with a video podcast.

[UPDATE: Actually, it turns out that HowStuffWorks.com founder Marshall Brain did the first podcast for the site called BrainStuff. And now there are 3 total video podcasts out of 10.]

Why do you think it became so popular?

Chuck: The comment we get most from our fans on email or our Facebook fan page is: "It feels like I'm listening to a couple of my old friends from when I was in college, sitting around in a bar, having a drink." The everyman quality that we both bring to the show really hits home. We're not experts, we don't profess to be experts. We mess things up every now and then, and people call us out and we read the correction on the air, and people get a kick out of that. It's just a very down-to-earth smart discussion, usually pretty funny, and people get to learn something and have fun at the same time.

Josh: The conversational tone that we manage to strike in every podcast is another compliment we get. "It's easy to listen to" is something we hear a lot. The reason for that is we don't practice together or rehearse. We both read the same article from HowStuffWorks.com, and we read it independently, do our own side research, ask our own questions and go over the topic and tear it apart and explain it bit by bit, including stuff we found in the article and elsewhere. We go off on tangents. We have a way of dating things by if it was before or after the first "Ghostbusters" movie came out.

Every bit of this podcast has come about organically, was given room to grow on its own. That accounts for its success as well.

Chuck explains how they never script anything in advance and try to spring little factoids on each other:

syskfactoids.mp3

So you base your subjects on a story that's been written for the website, right?

Josh: That's right. That's what gives it the structure. We both know the meat information that we both read over and over again to absorb it. That provides the loose structure, but within a topic ... one of my favorite topics of all time is How Zombies Work. That was cut into two parts. One was movie zombies and surviving a zombie apocalypse. That was semi-fictitious. Then there was the true part about Haitian zombies and how they're created. Knowing that's how the article went, we knew when it was time to switch gears when we'd used up our external research.

It's very easy to tell, after doing this so many times, when we're done. But at the same time, we've never been very pretentious about this. So we'll say, "Do you have anything else?" And that stays in, it doesn't get edited out. We're not bashful about letting people see through the veneer of what we're doing at any point. Though we do edit out any egregious mistakes -- most of the time.

stuff episodes.jpg

You cover some pretty serious subjects but you have a light tone. Does that become difficult for you or upset the audience?

Josh: Yes, every once in a while we get listener mail and are taken to task and scolded. It's very rare. In almost every case, the person says '"I am not going to unsubscribe but I wanted you to know you ruffled my feathers." When it comes to a heavy topic like "How Comas Work," we treated it slightly more heavily than we did "How Twinkies Work" but it still has the Josh & Chuck tone. After it was released, we knew we hadn't said anything offensive there but we wanted to make sure we hadn't inadvertently offended anyone who had a family member in a vegetative state. And we got listener mail from people who do have relatives in comas, and they thanked us and said, "You guys did this very well, it was factual and respectful and you didn't sensationalize it."

Since that point in time, we've become a lot more confident that our approach could be applied to anything. So we've done "How Tourette's Works" and we got compliments from people who have kids with Tourette's. I think people identify with us on a personal level and they're willing to forgive us.

Chuck: We now cover ourselves a little upfront with a disclaimer of sorts. We did a show on serial killers and it turns out we're not the only ones endlessly fascinated with serial killers. And we knew we would be joking around on the show, because that's what we do, so we said, "We just want people to know that while we are fascinated with this and into this, we do know there are real victims and we don't want to make light of that, so let's get on with the show." Every once in a while a little disclaimer goes a long way.

Josh: Physics doesn't really work in Chuck's or my brain, it doesn't fit that well. So we'll research our little hearts out and try. We did a recent podcast on the Hadron Collider, but we did a disclaimer at the beginning of that one too, not that we would offend anyone, but that we would surely get several things wrong on this. And if you can correct us, please do. And we got corrections from astrophysicists. As recently as last Monday an astrophysicist came up to me and said, "You guys really screwed up the Large Hadron Collider." But in a successive podcast, we read all the corrections on air, so the bad information we give out is corrected by someone who really knows what they're talking about.

How do you get your audience involved? They suggest topics and correct you, but is there any other way you interact with them?

Chuck: I can't say enough about our fan base. We've been lucky enough to meet some of them here on our trip to New York. We had a little get-together last night and are having another one tonight. They're the kindest, smartest, most interesting, curious, inquisitive people we've ever met. Josh always says that they're the largest collection of friends who have never met before. We get 350 fan mails a week, and our Facebook page has more than 10,000 fans after being up two months. We go onto Facebook a lot and we're really active there, it doesn't just sit there, and they appreciate that. It's a big happy family.

Josh: Plus, our Kiva team is another way people have got involved in a really tangible way. We did a podcast on how microfinance works, and how you can give loans to entrepreneurs in developing countries. We partnered with Kiva.org and set up a Stuff You Should Know team, and got to $100,000 donated within a couple months. [The total is now beyond $150,000.] There's a subsection of fans that has taken over our team and are leading the charge to raise a quarter-million dollars to loan to entrepreneurs in developing countries by the end of August.

Do you have plans to expand into other formats or do other projects?

Chuck: We've done a few live speaking gigs and spoke at an education conference and that's opened up a whole world to us, speaking in front of live humans, instead of just the two of us sitting in a room.

Josh: If you want to be baptized by fire do your first speaking gig in front of a group of teachers and principals -- especially if you were a smart aleck in school. They can tell 20 years on that you were somebody who would have given them trouble at their school.

Do you think the reason you're so popular is that typical journalism is not doing a good enough explaining the basics?

Chuck: There's some validity to that. Journalism and television media these days is pretty rapid-fire. You don't get a lot of in-depth discussions on things. That's why I love TV shows like "Charlie Rose" where you can get to the meat of the matter. We're both big NPR fans; they do a good job of that. We've been able to expand the show, and when you have 45 minutes to discuss a topic, you can break it down, and it's just a gold mine for guys like us. It used to be five minutes long and it became really hard to work in those constraints and so they just got longer and longer.

Josh explains how the subjects for the podcasts "comes from our brains":

syskbrains.mp3

*****

What do you think about Stuff You Should Know? Why do you think it's successful, and if you're a fan, explain why in the comments.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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Want Your Self-Published Book in Stores? Weigh the Options

The rise of online book retailers means that self-publishers have better access to customers than ever. But many authors still want to be on bookstore shelves. The good news is that you don't really need traditional distribution to get into bookstores.

The Databases

logo_bowkerlink_220x103.gifWith your ISBN and bar code from Bowker in hand (read my previous post that told you how to get control of your own ISBN), it's time to register your title and your contact information in their Books In Print and Global Books In Print databases. Registering with BowkerLink is the first step to enabling the industry to discover your book, and it's free.

Ingram is the largest book wholesaler and distributor in the world and if your book is not listed in their ipage ordering system, it's simply invisible to booksellers. You must have 10 titles a year to be accepted into their program, but this article shows you three ways to get in through the back door.:

  1. Create a relationship with a traditional distributor whose titles are listed with Ingram, and send them an inventory of offset-print books.
  2. Print your book on-demand with the Ingram-owned company Lightning Source, and you're automatically in.
  3. Use a self-publishing services company to list your book with Ingram.

No matter whom you distribute with, a 55 percent discount is standard. (You can offer less, but expect few takers.) When calculating your profit margin, factor in printing, shipping, postage, returns and start-up costs like editing and design -- all the costs of doing business. Don't forget ongoing costs like marketing and publicity, giveaways, promotion and accounting. Direct sales is certainly more lucrative than traditional distribution and you give that up when you sign an exclusive distribution deal. So why bother?

Traditional Print Book Distribution

In traditional distribution you (the publisher) prints a large number of books with an offset printer. The books are sent to a distributor who wants to sell mass quantities of your book to wholesalers and retailers.

Unfortunately, your book isn't really sold until it's bought by a consumer, so when -- not if -- your books are returned (a sad fact about the industry), the distributor then returns them to you.

distributors.jpgThe well-respected Independent Publishers Group has a new branch called Small Press United (SPU) and, if you're one of the fewer than 20 percent accepted into their program, they will present your book to resellers next to offerings from the mainstream press. Also consider Publishers Group West (PGW) and Baker & Taylor (B&T), the most important distributor to the library market.

Big distribution companies have not been eager to work with self-publishers, but that's changing. Still, it's easiest to get in through membership in the Independent Book Publishers Association (IBPA) or the Small Publishers Association of North America (SPAN). Both are worthwhile organizations for self-publishers thanks to their seminars, advice, discounts, and community.

But don't rule out a smaller distributor who specializes in your niche or genre, especially if you need help with design, editing, e-book conversion, and other tasks in order to publish your book. They may be more dedicated and more effective in providing you with personalized service over the years. As with the self-publishing services companies, you pay these distributors; but since they must maintain a good reputation with booksellers, they carefully vet their authors. Check out IPBA's Distributor/Wholesaler Directory and this list of Top Independent Book Distributors to start.

The downside? You relinquish the opportunity to sell your print book and your e-book direct to the consumer. Measure that benefit against the potential benefits of having hired a sales force, paired with your ongoing promotion efforts, to make your decision to go this route.

POD Distribution With Lightning Source

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The newer print-on-demand distribution model works like this: If a brick-and-mortar bookstore customer asks for your book, the bookseller finds it in the ipage Ingram database and places an order. Lightning Source prints it and sends it to the store, where the customer picks it up.

These days, customers are more likely to order from an online reseller, which cuts out the middle step. In this model, the customer orders a book from the online reseller, who sends the request to Lightning Source, who mails the book directly to the customer on the reseller's behalf.

Along with many other advantages, there are fewer returns because booksellers don't have to order several and wait to see if they sell. You don't have to worry about returns with print-on-demand.

POD Distribution With a Self-Publishing Firm

lulucswc.jpgEven the most basic, do-it-yourself self-publishing services companies -- think Lulu, CreateSpace and Wordclay -- offer services that includes an Ingram database listing for your book in your publishing company name. But since booksellers are definitely not flocking to what they consider the vanity presses in order to stock their shelves, make sure the publishing house name on the spine is your own. (See my previous article, The Pitfalls of Using Self-Publishing Book Packages.) They may -- invisibly to you and the customer -- use Lightning Source or another POD subcontractor to print and send it, which is fine, but realize you're paying a little more for this service.

A Middle Path

Before you seek out traditional distribution, you might ask yourself if you really need it. Many authors are more easily served by direct sales and POD distribution of print and e-books. Think of these options, for example:

  1. Using your website for direct sales via an online store.
  2. Back-of-room sales at personal appearances.
  3. Consignment deals with local booksellers and retailers in your niche.
  4. Using Lightning Source for both printed books and PDF-formatted e-books sold to stores and online retailers in U.S., Canada and Europe.
  5. Using Smashwords and Scribd for e-book sales in many formats for many e-readers (See my previous article for details on How to Pair Scribd and Smashwords for an Ideal E-book Strategy.)

You may be one of the many authors who missed the news that you can get into the Ingram database by printing on-demand with Lightning Source, or the newer news that self-publishing services companies now include this in their packages, too. (Yes, do keep looking for even newer news in this quickly evolving industry.) But do not miss the fact that you are responsible for the marketing and promotion that will create a buzz and sell your book.

The defining fact about traditional distributors is that they vet their work, whereas POD services companies will print and distribute almost anything. A traditional distributor will have opinions. Their reputation is on the line and they want to work with like-minded independent publishers dedicated to success. You should consider them a partner. Until then, an on-demand distribution solution should suffice.

Carla King is a publishing and social media strategist and co-author of the Self-Publishing Boot Camp Workbook, which grew out of experiences leading workshops for prospective self-publishers. She has self-published non-fiction travel and how-to books since 1994. Her series of dispatches from motorcycle misadventures around the world are available as print books, e-books and on her website.

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What Skills Will Future Journalists Need?

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Education content on MediaShift is sponsored by Carnegie-Knight News21, an alliance of 12 journalism schools in which top students tell complex stories in inventive ways. See tips for spurring innovation and digital learning at learn.news21.com.

For the past two years, OurBlook.com has been conducting interviews with top experts in journalism and media about the future of journalism. In my previous post for MediaShift, I offered a collection of views about where the industry and profession is headed.

We recently began asking interviewees to outline what they see as the role and skillset of the journalist. Overall, experts agreed that the future journalist will be:

  • A multitasker, juggling various responsibilities and roles, many which may have nothing to do with "traditional" journalism.
  • Technologically savvy, having at least a basic understanding of programming, web tools, and web culture.
  • A gatekeeper for a particular beat, directing readers to the most current and trustworthy news, regardless of who wrote it or where it's housed.
  • A versatile storyteller, who knows how to present a story online in various formats.
  • A brand and a community manager, who cultivates a constant and interactive conversation with their readership.

Experts Weigh In

The following are some of the best quotes from series:

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"What you are seeing is that journalists are having to be stretched a lot more with their skills ... I think that the best way to categorize or describe today's journalist would probably be somewhat of a multitasker and someone that is very, very determined [about] doing some serious storytelling. If you want to be rich this is not your profession to go into. But it is really a profession of service. And so I would say that it's someone who is determined to be an artist, a storyteller, and really provide a service for the public. I think some of those core things are still there." -- Vadim Lavrusik, community manager for Mashable.com and recent Columbia School of Journalism grad

"As recently as five or six years ago, it was enough to be one kind of reporter. It was enough to be a television reporter, or to be a print journalist, or to work for a wire service, or to work on radio. Unfortunately, that's not the case anymore. The firewalls between the newsrooms and the interactive side of things have really fallen down. And if you're going to do a story, you have to produce it on several levels. And if you are a reporter, your bosses are certainly asking this of you." -- Christopher Brown, National Press Club's vice chairman on new media and professional development.

"There is always going to be a need for people who can string a coherent sentence together and gather accurate information. In creating your brand, you have to be true to yourself because it becomes a lot easier to do that if it meshes with your personality." -- Amy Vernon, freelance journalist and the top female Digger of all time

"I think it's very important for journalists to look at what is happening in the real world, and try to find ways where their skills can be used to meet real market needs. If you can have your own baseline business of clientele and services that you offer, you can still have another job. When they lay you off or fire you -- and they will, that's the way that business is -- you don't want to be stuck scrambling. You will be in a much better position to guide your own career and take the work that you want, if you can be in business for yourself." -- Amy Gahran, info-provocateur, media consultant, and former writer for Poynter's E-Media Tidbits

Adam Chadwick on the Future of Journalism from OurBlook.com on Vimeo.

"My major concern with the emerging class of journalism students [is that] ... a lot of them see what's going on in the industry, not just newspapers, but broadcast and radio as well, and they don't want to be a part of it anymore. What kind of message is being sent to the next generation of journalists right now? It's really sad to see. So, you just wonder who's going to step up and be there?" -- Adam Chadwick, a filmmaker currently working on "Fit to Print," a documentary exploring the decline of the U.S. newspaper industry

"We are trying to be a lot more welcoming ... we are trying to encourage more dialogue than we did in years gone by. I think that's helping not only do the job that we are called to do, but its going be something that rescues the press." -- Michael Ray Smith, professor of communication studies, Campbell University

"I think the question becomes how much of a role do journalists have with regards to the future of journalism. In my opinion, they hold all the cards at this point ... journalism and reporting are still the same. That has not changed one bit. The tools that we use to do it, that's what is changing so rapidly." -- Bill Handy, visiting professor, Oklahoma State University

"You have too many people that are old, or my age, that are moaning ... and they are really missing the tidal wave. My students are riding the crest of that tidal wave. As a matter of fact, they don't even know it's a tidal wave ... that they are in a digital tsunami. They are just having fun in the water, and guys my age are on the beach and seeing this tsunami and running like hell." -- Benjamin A. Davis, former producer at MSNBC.com and NPR, and current instructor at Rutgers University

"A great deal is the same. The job is still is try to figure out what is significant and interesting and go report on it, and tell stories, and try to disperse that as best you can, to the public. Of course all of those steps have changed along the way. What is significant and interesting has changed, how you report is changing somewhat, and how we disperse it is changing a lot. But the basic tools are still reporting and storytelling." -- Mike Hoyt, executive editor of Columbia Journalism Review

Sandra Ordonez calls herself a web astronaut who has been helping organizations navigate the internet since 1997. Currently, she helps run OurBlook.com, a collaborative online forum that gathers interviews from today's top leaders in the hopes of finding tomorrow's solutions. Since December 2008, the site has been conducting a Future of Journalism interview series. Sandra also heads up the Facebook page, "Bicultural and Multicultural People Rule." Previously, she was the Communications Manager for Wikipedia. She graduated from American University with a double degree in International Relations and Public Relations.

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Education content on MediaShift is sponsored by Carnegie-Knight News21, an alliance of 12 journalism schools in which top students tell complex stories in inventive ways. See tips for spurring innovation and digital learning at learn.news21.com.

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Barnett: Advocacy, Membership Groups to Push Non-Profit News

The erosion of the traditional business model for news has led many to go down the non-profit path. The result is a slew of new non-profit news websites. The Bay Citizen, which launched at the end of May, is the newest and joins the likes of ProPublica, MinnPost, and the Texas Tribune, to name just a few. But as the closing of the non-profit Chi-Town Daily News last year indicates, running a non-profit isn't easy.

Perhaps no one understands this as well as Jim Barnett. After almost two decades as a newspaper reporter, Barnett threw his efforts into launching his own non-profit news service in 2005. Managing a non-profit proved to be a major challenge and Barnett realized he'd need some new skills in order to be successful in this space. These days, he's pursuing a masters in non-profit management at George Washington University, working as an in-house adviser to AARP's publications group and doing some editing for the Washington Post News Service at night. He's also been expanding on his academic work on his blog, The Nonprofit Road, and more recently on Harvard's Nieman Journalism Lab blog.

I spoke with Barnett to examine the outlook for non-profit journalism, the government's role in the future of news, quality indicators for good non-profit news sources, and more.

Q&A

You've been blogging about non-profit journalism since 2009. You're pursuing a non-profit management degree at GW and you even tried to launch your own journalism non-profit. It's fair to say you're pretty invested in the model. Are you concerned that the activity in the non-profit journalism space will slow down at all because of the drop in newspaper layoffs? How do you think non-profit journalism will evolve over the next five years?

Jim Barnett: While it is true that the bloodletting of the past couple of years has created a huge talent pool for non-profit startups, I think the model really is riding its own trajectory. What now seems like a flurry of interest I think is actually the result of a longer-term trend that I think will continue as the economy recovers and the newspaper industry stabilizes.

I think the recent uptick of interest in the non-profit model can be traced to events in 2004, as it was becoming painfully apparent to many in the news business that the newspaper model would not translate simply or easily into the digital age.

One was Louisiana State University's March 2004 symposium, "News in the Public Interest: A Free and Subsidized Press," which attracted thought leaders. The non-profit model was a major topic of discussion, and it soon began gaining traction within journalism circles.

In November 2004, Columbia Journalism Review published an essay by Phil Meyer of UNC-Chapel Hill entitled "Saving Journalism." In it, Meyer talked about the non-profit model as a way 'to keep the spirit and tradition of socially responsible journalism alive until it finds a home in some new media form whose nature we can only guess at today.'

After a lot of talk that year, things really started taking off. In 2005, the Voice of San Diego was launched. Two years later came ProPublica and MinnPost. Today, there are many more, small and large. And now, other non-profits that do advocacy and education are exploring how they can use the tools of journalism to help fill the void.

How will the non-profit model evolve over the next five years? I don't think anybody can say with any degree of certainty. We're in a period of great experimentation, and much will be up to luck and circumstance. But when you think about how much has happened since 2004, I do think it is clear that the sector has achieved a critical mass that will carry it for years to come.

I will risk two general predictions. I think you'll see a lot more advocacy non-profits (think Human Rights Watch or American Red Cross) doing more to fill the void in traditional journalism. And I think you'll see more journalism sponsored by membership groups (think Council on Foreign Relations) and online communities (Spot.Us) that function like membership groups in many ways.

You're no stranger to criticism of non-profit journalism. Do you believe the model has its limits or is it journalism's silver bullet?

Barnett: It's by no means a silver bullet. I'm always very careful to say that the non-profit model is an answer, not the answer. But the non-profit model is especially useful in certain areas, such as public affairs reporting from D.C. and state capitals that have been abandoned by many newspapers but that we need to function as a society.

This is not a new revelation. I like to remind people that the non-profit sector in journalism dates to 1846 when a group of New York newspapers formed a cooperative to cover the Mexican-American War. That cooperative serves us now as the non-profit Associated Press, and the economic forces that made it a good idea then remain in force today.

Is there anything non-profit journalism does better than traditional newspaper journalism in its heyday?

Barnett: That remains to be seen. But I do think the non-profit model does as good a job as any of matching newspapers' ability to take risks, throwing reporters and resources at a story without any promise of financial return. In most for-profit models of the digital age, news stories must serve two masters: Each must meet the standards of journalistic inquiry and each must carry some share of the freight by generating online advertising revenue. In the non-profit model, the case for philanthropy can be built around the pursuit of objective journalism without the same pressure to generate immediate readership and revenue.

You've written about the Newspaper Revitalization Act and the FCC's Future of Media project. What role should the government play in the future of journalism?


Barnett: First, we need to separate the concepts of journalism and the media -- in this case, newspapers -- that deliver it. I'm not a huge fan of the Cardin bill because it attempts to give newspapers -- not necessarily journalism -- a special place in line for government help. I think government creates problems in any industry when it starts picking favorites, no matter how noble the cause. If newspaper publishers really want to operate under non-profit status, they can do so under existing law. But the real problem is the economics: Publishers must serve shareholders first, and they generally do better by continuing to cut costs (read: news staff) even if they lose circulation and quality. The Cardin bill does nothing to reverse the newspaper death spiral.

Do you think public subsidies, such as the ones suggested by Robert McChesney and journalist John Nichols, are a good idea?


Barnett: Whether one thinks subsidies are good or bad, they are a fact of life for any major media enterprise. Earlier this year, David Westphal and Geoffrey Cowan at USC released a masterful report showing the pervasiveness of government subsidies to news media of all kinds, and they argued that this is exactly how the Founding Fathers intended it. I think their report enlightens the debate immensely. To oppose subsidies on principle is a bit like the health care reform protestor last July demanding, "Keep your government hands off my Medicare!" But what level or what form any subsidy should take is way beyond my little realm of expertise.

With so many different journalism non-profits sprouting up, earlier this year you blogged about the need for a 'Good Housekeeping seal of approval' for non-profit journalism and outlined some ideas for criteria. You said you'd be doing additional research on this and that it would be a topic of discussion at the We Media conference. So we're following up, any new insights?


Barnett: I've wrapped up my research and am working on a post for the Nieman Journalism Lab that I hope to publish soon. The question I tried to tackle was this: 'What steps can non-profits take if they want to be legitimate news providers?' There are some great examples out there, and not all come directly from within boundaries of traditional journalism. Some advocacy non-profits such as Human Rights Watch establish legitimacy as fact-finders and align their case for philanthropy with that mission. Other non-profits such as the American Red Cross use the tools of journalism as a means of accountability and transparency to donors. Stay tuned, my post should go live this week.

What's next for you? Any plans to expand your role in the non-profit journalism world?

Barnett: One thing's for sure -- I'll be wrapping up my academic career next year when I get my master's from GW. Beyond that, I hope to apply some of the things I've learned to my day job as a strategic analyst at AARP. We put out some high-quality publications, and I think we have a lot to contribute at a time of great change in the news business.

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What role do you see non-profit news organizations playing in the future of the press? Share your thoughts in the comments.

A writer, reporter and media consultant, Jaclyn Schiff is up at the crack of dawn to tackle the headlines of the day for her job at the non-profit Kaiser Health News. When she should be catching up on sleep, she can usually be found updating her Twitter feed or Tumblr blog, MEDIA Schiff (pun intended). Schiff covers non-profit news for MediaShift.

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