Crowdfunding Emerges as Key to Online Journalism in Europe

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April 20, 2015;Through the Cracks

Journalism around the globe continues to seek new business models in the wake of the digital revolution that has laid waste to the traditional advertiser-supported print model. And there’s even a news site dedicated to that: Through the Cracks: Crowdfunding in Journalism.

The site reports on Krautreporter, a German news site that raised $1.38 million to launch an ad-free online magazine, even though its founder said he didn’t know if the venture would last a year. But Through the Cracks says that Krautreporter is announcing plans to launch a platform dedicated to the field of crowdfunding itself.

“We want to be a service provider for international crowdfunding projects and…add to this European movement of crowdfunding that we see at the moment,” said Krautreporter’s head of audience engagement at the International Journalism Festival in Perugia, Italy. It will aim for an international audience of reporters and storytellers to use the platform.

He sees “a European crowdfunding movement that is…booming. […] Especially at this point in time in journalism, there are no rules. There are just assumptions and those assumptions have to be tested…because sometimes you will find that assumptions that were true yesterday are not true today.”

121 Giving - Content Underwriter is considered the first crowdfunding platform for journalism; it grew rapidly between 2008 and 2011, but shut down earlier this year. Others include the Dutch news startup De Correspondent and the Spanish El Español, both of which raised millions of euros, as well as Stundin in Iceland, the Blank Spot Project in Sweden and Direkt36.

Krautreporter’s managers believe they have identified an unmet need for a news outlet whose coverage wasn’t ruled by ads or the need to produce a page-views target. Krautreporter started out as a German-language online magazine, and began its crowdfunding platform in 2013. They also learned that a platform dependent on free-standing stories or projects that raise a few thousand euros for each isn’t a sustainable business model: “They really run for enough funding to sustain a whole newsroom operation for a year or even longer.”

The results are genuine alternatives to the existing media landscape, building a newsroom and establishing a news brand. Originally, Krautreporter was run with contributions from freelancers, but its leaders decided to work with more full-time staff who can work in a common office. It also relies heavily on reader engagement.

Crowdfunding is popular in the United States, but that business model for news sites has not been as prevalent here, where nonprofit news sites have been making their mark.—Larry Kaplan