At The Table @ The Minneapolis Foundation

Guest Speaker Joel Kramer

The news business has changed dramatically in recent years. There is a huge increase in citizen journalism, the role of social media is consistently growing, and advertisers are finding new ways to reach their customers. According to MinnPost Editor and CEO, Joel Kramer, our guest at the most recent At the Table event, every paper in every city has been affected in some way and approximately 10,000 journalists have lost their jobs in the process.

Mr. Kramer discussed that while most assume the reason for problems is the trend of readers moving from print to online as their primary source of news, he argues that it is a flawed financial model behind advertising that is breaking the business.  Traditionally, 80% of newspaper expenses were covered by advertising revenue.  Today, companies do not need an intermediary like a newspaper or a web page to meet their customers, particularly in a social media environment where advertisers can rely on viral marketing or can easily collect emails to communicate directly with their customer base.  The only publications immune to this trend are so hyper-local or uber-specialized that their advertisers are not looking for online marketing to meet the masses.  For example, print remains a viable option for the local hardware store or place of worship.

At the Table Participants Connecting

MinnPost was created by Mr. Kramer in 2007 as a non-profit media source, which is heavily focused on public affairs journalism that combines reporting, analysis and commentary.  According to Mr. Kramer, there is “no such thing as unbiased journalism”, so he’s using this model to take down the curtain and be more open with the readers, which he estimates at between 25,000-30,000 on a regular basis. Mr. Kramer had three primary reasons for structuring MinnPost as a non-profit media source.

1. There was no need to recreate a broken wheel.  It was already evident that the for-profit model was not working and he did not want to rely on advertising revenue to operate.
2. Public affairs information is a public good and not a consumer good. This designation aligns MinnPost with other public goods such as the arts or public radio and therefore follows a similar funding structure.
3. A newer revenue trend for online news is to charge for content, and evidence shows that only about 10% of readers are likely to pay for content.  This percentage is equal to the fundraising experiences of public television and public radio.  Mr. Kramer shared that people are most likely to pay for content that helps them make money.  Therefore, publications such as the Wall Street Journal have had success because people feel they need to read WSJ in order to be better at their job. Likewise, sports content is also often paid for because of gambling.  However, given MinnPost’s emphasis on public affairs, it did not seem likely to generate a large following of paid readers.

Discussing the topic

As a non-profit, MinnPost does rely on donations of readers, foundations, and actively searches out sponsors of content.  They receive some ad revenue, but this is a small budget line for them.

Mr. Kramer’s model is based on an interesting argument – media as a public good and not a consumer good.  Do you agree?