(Updated June 12, 2014)

Over the past six or so months, the news about the news world has been flush with conversations about the rise of for-profit digital news startups and, in particular, the rise of venture capital-backed startups.

According to the Pew State of the News 2014 report, venture capital firms have added more than $300 million into new media startups in 2013.

And this doesn’t take into consideration other money that has flowed into news from those with tech and start-up backgrounds, like the founder of ebay (eBay Inc.) Pierre Omidyar (now of First Look Media), and Laurene Powell Jobs, the wife of Apple’s Steve Jobs (Ozy), who have also backed new content-based journalism outputs, Bezos’ purchase of The Post, or Ben Huh, the I Can Has Cheezburger entrepreneur, who co-founded and funded a mobile news curator (Cir.ca).

Pew calls this rise unprecedented, and there’s evidence that digital journalism has created 5,000 jobs over the past six years — and that for-profit start-up online newsrooms beginning to scale may have had more than a little to do with this.

So it’s important for the Donald W. Reynolds Journalism Institute to step back and look at this trend — from its rise to the unasked questions. That’s what my project will do: focus on venture capital-backed operations and/or hopefuls in the news startup space.

Consider just how much this space is expanding.

We know at least some news startups can scale at this point.

At Huffington Post, originally a venture capital-based company backed by Lerer Ventures and now owned by AOL, there are now more than 750 editorial employees on the books. Buzzfeed, also partially backed by Lerer, is now known as much for its quizzes and listicles as it is for its original reporting.

There are those venture-backed startups that have gotten significant attention and may scale soon, most notably Ezra Klein’s Vox. Parent company Vox Media recently received another $40 million infusion in its latest round of financing.

And fivethirtyeight.com founder Nate Silver is often listed in this group, having managed to embed his statistically based data reporting inside ESPN for a reported $15 million to $20 million.

Circa, which has raised $3.4 million, may be operating on a smaller scale. But its mobile-based approach to editorially curated news has been considered innovative enough to pose a threat to The New York Times in its leaked Innovation Report.

And Newsy, a video news curator which has a relationship with the Reynolds Journalism Institute and the Missouri School of Journalism, was recently bought by Scripps for $35 million.

In the past, venture folks have stayed away from content. But why the turn to content now? And from inside the newsrooms, what is the plan to continue to make these sustainable?

These ventures promise to be new kinds of companies — through innovations in editorial content, technical advancements, and sustainability and business models. But the truth is that we’ve heard very little about what is going to make some of these innovations different as they claim to be — or not.

There are great promises for editorial innovation — claims to make it more comprehensive to learn about the vegetables of journalism without it seeming like broccoli, promises to offer real insight into niche products, a hope for a return to long-form reporting.

Or there may be offers for the rise of data journalism, and the rise of the atomic unit of news through mobile platforms. There’s been experimentation with video and a new interest in trying to see how platforms can change content delivery.

But we need to take a hard look at these claims for editorial reinvention and see what has changed from an empirical standpoint, and moreover, how is it that these sites are hoping for authority and/or legitimizing themselves in the discourse of journalism.

Another open point lies in the question of promised technological innovation — from companies founded by tech entrepreneurs and backed by tech capital, a fair number have promised that they will do things technically different.

But it’s an open question what this means and how these sites will accomplish these plans.

Some organizations have started to explain their innovative approaches to news and media work.

At Vox, we have started to hear more about how the content management system, Chorus, offers new opportunities as opposed to a more clunky Web and print content management system.

And at Buzzfeed, we’ve heard about the socially driven analytic innovations that aid the organization’s efforts to create engaging content.

This project aims to learn more about these innovations — the reason behind them and why they matter. How do they change the dynamics of production? What advantages do they bring to the creation of different types of news?

Finally, another key question to investigate may be the most consequential of them all — just what is the future of financial sustainability for venture-backed companies? We know that venture capitalists often invest in many companies, often ones that will fail — with a strategy that if you invest in enough of them, one will take off.

In the past, venture folks have stayed away from content. But why the turn to content now when in the past, VCs had ruled this out as unprofitable and labor-intensive? Is this a media bubble? And from inside the newsrooms, what, exactly, is the plan to continue to make these sustainable; how will these sites draw users, readers and advertisers?

News startups are an incredibly enticing opportunity to those concerned with the fate of journalism, and may make a real impact on the kind of journalism we receive — perhaps even beginning to supplement some of the retrenchment in quality content we have seen. In my mind, they are an extremely bright spot on the spectrum for thinking about the future of news. On the other hand, we just don’t know enough about what they actually mean, and that’s what this project for RJI intends to investigate.

Nikki Usher  
Nonresidential fellow


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