While Shadowproof runs another membership and donation drive (yes, that again), it seems worthwhile to consider the other ways journalistic outlets can gain funding now that Google has destroyed the digital advertising market that was previously the backbone of many public spirited online news outlets.
Shadowproof settled on memberships and donations because it was the best way to both operate effectively and remain loyal to readers and our principles. The alternative, usually only available to sites that are getting at least ten million-plus in monthly traffic (real or imagined), is to fund operations with specific advertising campaigns, which are predominantly comprised of morally dubious native advertising. Native advertising is designed to trick the reader into thinking an advertisement is a news story. BuzzFeed has pioneered this deceptive approach and not without incident.
So, the question seemed to be between two different models – gaining funds through advertising or through readers in the form of donations, memberships or subscriptions. Even sites that rest on a cushion of venture capital funding eventually have to deal with this reality or hope to be bought or invested in by a large media conglomerate that can eat losses indefinitely. Given the barrier to entry both quantitatively and ethically for advertising, it looks like most places are choosing the reader-supported model.
But Politico appears to have found what could be considered a third way to fund itself, one that relies on federal government contracts.
According to a source familiar with the situation, Politico’s subscription service launched in 2010, known as Politico Pro, heavily relies on the powerful people and institutions it covers for its funding. The Weekly Standard estimated, based on public documents, that from 2011-2014 Politico Pro made nearly a million dollars off government contracts.
In 2015, Politico brought on Republican operative Brad Dayspring to be Politico’s first vice president of communications. Dayspring previously served as the communications director for National Republican Senatorial Committee and was an adviser to former House Majority Leader Eric Cantor and Wisconsin Governor Scott Walker.
Politico claims in their press release that Dayspring will help the company build its business model and that they “believe Brad, who has an exceptionally sharp understanding of the intersection between media, campaigns and government, is the perfect person to lead this charge.” That intersection, according to people I’ve spoken to, includes Dayspring lobbying his former co-workers and colleagues in the Republican-dominated Congress to buy Politico Pro subscriptions.
This is, on some level, a reader-supported model. But might some of those powerful people threaten to pull those subscriptions if they are displeased with the coverage? And, wouldn’t such a threat actually financially imperil a narrowly tailored subscription service? In other words, doesn’t Politico have to play ball with Congress to keep the money flowing?
Of course, this third way model may not be working. The Washington Post recently reported that Politico has “imploded,” with key staff jumping ship.
Rumors of Politico’s demise are so widespread that Vice President Joe Biden recently joked at a Gridiron Club dinner “I have been around long enough to remember some of the most prominent publications of the past; The Herald Tribune, The Philadelphia Daily News, The Washington Star, Politico.” Biden then paused for a laugh before delivering the punch line “Too soon?”
It likely is too soon to call time of death for Politico, but equally, it is well past time to raise questions about the conflict of interest between covering politicians while correspondingly trying to sell them products. After all, the customer is always right.