26 November 2008

Crowdfunding: Future Business Model?

Can crowdfunding become a viable way for mainstream media to support their services?

That’s the question posed by Mark Glaser in a recent MediaShift blog post, and as part of the discussion he looks at some examples of the crowdfunding theory being put into practice.

First up, a definition of crowdfunding from Glaser: “Getting micro-donations through the Internet to help fund a venture.”

He points to a couple of hyperlocal crowdfunding projects which are getting underway in the US.

Representative Journalism is the brainchild of academic Leonard Witt from the Kennesaw State University in Georgia.

The idea behind the initiative is to raise a series of donations from residents in a small town in order to pay for a journalist to be based there full time.

Witt told MediaShift: “So we have to work on three fronts: 1) we have to provide high quality journalism; 2) we have to get the community to know our journalist; and 3) the community has to feel that their membership in the community and the news and information it produces has value worthy of their financial support.”

Glaser also spoke to Spot.us founder Dave Cohn about the potential of crowdfunding as a source of funding for traditional media.

He said: “Community-funded journalism relies on two basic shifts. First, the audience has to think of journalism as a public good like art that’s worth sustaining with their own money.

“The second shift is with reporters who have to realise they are a personal brand and they can pitch the public.”

Based in the San Francisco Bay area, Spot.us encourages the public to offer tips for stories they want to see investigated and these projects are then funded by micro donations.

As well as these community crowdfunding efforts, Glaser looks at individual projects where bloggers have covered their costs through donations from readers.

For example, Chris Allbritton funded his Back to Iraq blog with public donations and satirical political blogger Ana Marie Cox was able to cover the second half of John McCain’s election campaign thanks to money given to her by readers.

Visit MediaShift for the full post.

[Picture - Jimmy McDonald on Flickr.]

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