global news-gathering organization

Co-Op Model Another possibility for restructuring advertising-funded mass media is the cooperative model. With a co-op, several news organizations reduce expenses by sharing content.

In news, the largest co-op model is the global news-gathering organization the Associated Press (AP). The predecessor to the AP began as a joint effort of several New York newspapers in 1846 to pick up news from Europe by sending boats out to trans-oceanic ships at anchor off Sandy Point waiting to dock. Rather than each paper hiring its own news boat to fetch the mail bundles, the papers agreed to share a single fleet to eliminate redundant costs. The Harbor News Association, as the co-op was known, evolved and grew into the AP. Then as now, member newspapers shared the costs of operation.

Not a single for-profit competing U.S. news agency has outlived the no-profit AP co- op model. Today the AP has bureaus in every state in the United States and 243 bureaus abroad. An estimated 3 billion people a day see or hear news from the AP globally.

Nonprofits National Public Radio (NPR), another nonprofit, although not a cooperative, has been successful as an alternative media ownership model. NPR began as a noncommercial endeavor in 1971 and reached a peak of listeners in 2010, with 27 million listeners a week who listened to at least one of NPR’s 25 weekly shows featured on NPR channels. But NPR audiences have been declining recently in what experts call the “Graying of NPR.” The largest group of NPR listeners is now retirement age, and grew up on NPR shows.

Whether an existing advertising-supported media outlet can be converted into a nonprofit is debatable. Even if a nonprofit can generate sufficient revenue to underwrite operations, the entity faces challenges to maintain its own infrastructure. With a newspaper, for example, printing presses have a useful life of 30 years. in lean times most newspapers have put off purchasing replacement presses, though

eventually, the presses will fall apart and need replacing. Other deferred capital expenses include maintaining facilities, replacing vehicles, and upgrading software.

A nonprofit may keep a media operation going for a period, but the longer-term issue is sustainability. Robert Picard, a media economist, sees bleak prospects for a “sustainable model.” A new nonprofit, Picard says, might be up and running for two or three years, maybe longer, but then fail because of deferred maintenance.

Tax Break for News? Among financial obstacles for nonprofit news upstarts is the U.S. tax code. The Internal Revenue Service (IRS) has denied tax-exempt status to many of these nonprofits. Why? Because news doesn’t meet the IRS criteria of education—“the instruction of the public on subjects useful to the individual and beneficial to the community.” When the Chicago News Cooperative collapsed in 2012, the IRS definition of news was a factor. For all news nonprofits, fund-raising is hampered when donors learn that their gifts are not tax-deductible. Currently there is about a two-year waiting list for newspapers attempting to obtain IRS 501(c)(3) nonprofit status and journalism groups.

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