The Art and Science of Data-Driven Journalism

Data-driven Business Models

Data journalism and the databases that drive it also offer dramatically improved means to organize and access source material over time. That’s not a minor issue: Newsrooms and media organizations are subject to the same challenges around knowledge management and collaborations that other organizations are in the 21st century. The McKinsey Global Institute estimates that knowledge workers spend 20 percent of their time trying to find information.64activity is central to the work journalists do, improving collaboration through social software and digital source material condenses the time it takes to get a story researched, edited, and published. As editors in the business, tech, and finance world know well, that can mean real money”and stabilizing revenues and finding new sources of income is very much on the minds of publishers these days. The 2013 State of the Media report from Pew Research Center’s Project for Excellence in Journalism painted a picture of contraction, with newsroom closings and a digital advertising market dominated by technology giants like Facebook and Google.65the traditional business models of newspapers has been well-documented over the past decade. More than 166 U.S. newspapers of an estimated 1,382or closed down altogether since 2008,66than 40,000industry since 2007.67when newspapers enjoyed local advertising monopolies and 20 percent profit margins, either. Craigslist, eBay, and have each become platforms for the classified revenue that once sustained local newspapers. No single, replicable business model for media in the information age has emerged since, although literally hundreds of panels, conferences, and colloquia have been held to debate the issue. The economic pain remains most acute at the regional level, where daily newspapers face the difficult challenge of getting consumers to pay for yesterday’s news. Just publishing or republishing rows of data alone will not come to the rescue. For instance, one of the canonical examples of data-driven news, EveryBlock, never quite caught on. The site, reasonably described as the “Xerox PARC of civic data,”68was acquired by MSNBC in 2009, expanded and refocused on creating community features on top of local data over the years. In 2013, NBC News shut down EveryBlock,69business model. EveryBlock faced other fundamental issues: Despite a 2011 redesign that integrated more social features and topics, the local data that drove the service didn’t prove compelling enough to attract consistent daily visitors to sustain the site. Pages of data weren’t enough to engage the public on their own. EveryBlock needed more narratives and human interest pieces to keep people coming back for more, engaging them in participation and creating a community. In 2014, EveryBlock relaunched70experiment, however, hopes that the platform become the civic architecture to stitch together neighborhoods elsewhere are considerably dimmed. Instead, private social networks like Nextdoor or Facebook, bulletin boards like Craigslist, and mobile applications that follow will more likely help neighbors connect to one another or local services.The struggles that hyperlocal and local news72searching for a business model have left many observers wondering what will work.73percent of staff and shifted strategy from local advertising sales to national accounts, Patch is on path to be profitable in 2014 with 17 million unique visitors across 906 sites in April of 2014.74tough decisions to make about where to cut and where to invest. Despite the promise of data-driven journalism and its importance in the digital news environment, some are still choosing to close divisions dedicated to data.Digital First Media, for instance, “shuttered its Project Thunderdome” in April of 2014.75an article for the Nieman Lab,76promising digital startup within a much larger media company, producing solid videos and data-driven features like “Firearms in the Family,”77Assassination”78advisor.79Thunderdome down, however, was driven more by cost-cutting on the part of Digital First Media’s majority owner, Alden Global Capital, than the success or failure of the unit.Other media companies would be wise not to make the same decision, argued Scott Klein, who said that publishers can afford data journalism if they prioritize it:News organizations are contracting and budgets are going down. Times are still very tough. That said, I suspect that some newsrooms say they can’t afford to hire newsroom developers when they really mean that their budget priorities lie elsewhere”priorities that are set by a senior leadership whose definition of journalism is pretty traditional and often excludes digital-native forms. I also hear a lot from people trying to get data teams started in their own newsrooms that the advice that newsroom leaders get is that newsroom developers are unicorns, whom they can’t afford. Big IT departments sometimes play a confounding role here.I suspect many metro papers can actually afford one or two journalist/developers”and there’s a ton of amazing projects a small team can do. For years, the Los Angeles Times ran one of the best news application shops in the country with only two dedicated staffers. (They still do great work, of course, and the team has grown.) If doing data journalism well is a priority of the organization, making it happen can fit into your budget.80alive from the Thunderdome, at least, will have many options in a booming market81startups82Media, Buzzfeed, Gawker, Business Insider, and Mashable. According to Pew’s 2014 State of the News Media, these relatively new entrants have created some 5,^000^ jobs.83journalism went mainstream when Nate Silver’s revamped FiveThirtyEight launched at ESPN and the New York Times started The Upshot. Whether some of the new entrants prove commercially successful is still in question, particularly for those pursuing explanatory journalism, seeking to help readers navigate the news. “These publishers haven’t talked much about their revenue strategy, but this is still publishing,” noted Lucia Moses in an article on the ad model for explainer journalism in Digiday: They’re in it for the advertising. Online publishers can build an ad-based business one of two ways: Go the scale route by selling price-depressing ads programmatically, or focus on the long tail of lucrative, highly custom advertising (which presumably has a better shot at getting consumers’ attention). These publishers are making a bet on the latter, and in the case of the startups, they have the benefit of having established backers”Vox is part of Vox Media; FiveThirtyEight has ESPN”to help with technology and ad sales.84however, more business models for data journalism than advertising, as Mirko Lorenz, a journalist and information architect at Deutsche Welle, highlighted in the Data Journalism Handbook: The big, worldwide market that is currently opening up is all about transformation of publicly available data into something that we can process: making data visible and making it human. We want to be able to relate to the big numbers we hear every day in the news”what the millions and billions mean for each of us.There are a number of very profitable data-driven media companies that have simply applied this principle earlier than others. They enjoy healthy growth rates and sometimes impressive profits. One example: Bloomberg. The company operates about 300,000and delivers financial data to its users. If you are in the money business this is a power tool. Each terminal comes with a color-coded keyboard and up to 30,000analyze, and help you to decide what to do next. This core business generates an estimated U.S. $6.3least this what a piece by the New York Times estimated in 2008. As a result, Bloomberg has been hiring journalists left, right, and center; they bought the venerable, but loss-making Business Week, and so on.Another example is the Canadian media conglomerate today known as Thomson Reuters. They started with one newspaper, bought up a number of well-known titles in the United Kingdom, and then decided two decades ago to leave the newspaper business. Instead, they have grown based on information services, aiming to provide a deeper perspective for clients in a number of industries. If you worry about how to make money with specialized information, the advice would be to just read about the company’s history in Wikipedia.And look at The Economist. The magazine has built an excellent, influential brand on its media side. At the same time the “Economist Intelligence Unit” is now more like a consultancy, reporting about relevant trends and forecasts for almost any country in the world. They are employing hundreds of journalists and claim to serve about 1.5worldwide.85that it can provide about the world. Proprietary data is a valuable resource that can and does drive the business models of giant companies. There’s a reason data scientists are a hot commodity from Silicon Valley to Wall Street to intelligence agencies in Washington, D.C.: They can create valuable knowledge from vast amounts of data, both public and private. Similarly, there’s a reason that hedge funds use the Freedom of Information Act to buy government data:86business intelligence for investment management. Outside of Western democracies with relatively well-established FOIA laws and governments that have been collecting and releasing data for decades, data stewardship may be even more strategic. Justin Arenstein, a Knight International Fellow embedded with the African Media Initiative (AMI) as a director for digital innovation, said in an interview:We’ve embedded open data strategists and evangelists into the newsrooms, backed up by an external development team at a civic tech lab. They’re structuring the data that’s available, such as turning old microfiche rolls into digital information, cleaning it up, and building a data disk. They’re building news APIs and pushing the idea that rather than building websites, design an API specifically for third-party repurposing of your content. We’re starting to see the first early successes. Four months in, some of the larger media groups in Kenya are now starting to have third-party entrepreneurs using their content and then doing revenue-share deals.The only investment from the data holder, which is the media company, is to actually clean up the data and then make it available for development. Now, that’s not a new concept. The Guardian in the United Kingdom has experimented with it. It’s fairly exciting for these African companies because there’s potentially”and arguably, larger”appetite for the content because there’s not as much content available. Suddenly, the unit cost of value of that data is far higher than it might be in the United Kingdom or in the United States.Media companies are seriously looking at it as one of many potential future revenue streams. It enables them to repurpose their own data, start producing books, and the rest of it. There isn’t much book publishing in Africa, by Africans, for Africans. Suddenly, if the content is available in an accessible format, it gives them an opportunity to mash-up stuff and create new kinds of books.They’ll start seeing that content itself can be a business model. The impact that we’re seeking there is to try and show media companies that investing in high-quality unique information actually gives you a long-term commodity that you can continue to reap benefits from over time. Whereas simply pulling stuff off the wire or, as many media do in Africa, simply lifting it off of the Web, from the BBC or elsewhere, and crediting it, is not a good business model.87Olympics data in 2012 is a useful example of an entrepreneurial business model of this sort,88Associated Press.89facts, and figures,” wrote Jacqui Maher, assistant editor on the New York Times Interactive team, in a post on the “data Olympics.” She said:Just about any competition that tests the mettle of athletes can be broken down into data points, like personal-best times crossing the finish line of a 5k race, or top career home runs in Major League Baseball. Bringing a sport’s national champions together in international competitions”for instance, soccer’s World Cup”adds more layers of information. And then there’s the Olympics. How much more data is that? Well, in two weeks of the Olympics over 204 gold, silver, and bronze medals were awarded after 7,000the best of 32,000took us about 30,000repository to figure out how to show it.90