France: Paywall works for investigative journalism site

The online investigative publication that recently reported French President Nicolas Sarkozy received 50 million euros in campaign support from Libya in 2007 is an anomaly: a profitable subscription-only service that accepts no advertising.

Mediapart is showing that in the right circumstances, an investigative news organization can be a viable business.

Investigative journalism in the U.S. is on the decline because the old business model that supported it is collapsing. A number of nonprofit online news organizations have been attempting to fill the gap, with Propublica the most notable example.

Many journalists have concluded that investigative journalism is not a business but a public service that needs to be supported much like an arts or charity organization.

Profit of 572,000 euros

But Mediapart has managed to attract 58,000 paid subscribers and break even since its founding four years ago. It reported a profit of 572,000 euros on revenues of 5.1 million in 2011. (Editor and President Edwy Plenel, formerly of Le Monde, here describes the road to profitability, in French.)

Mediapart’s innovations are described by Nicola Bruno and Rasmus Kleis Nielsen in their online book “Survival is Success: Journalistic Online Startups in Western Europe,” just published by University of Oxford and the Reuters Institute for the Study of Journalism.

Bruno and Nielsen profile three startups each from Germany, Italy and France. and show how the media and economic conditions in these countries require unique innovations that differ from models that have worked in the U.S. and Great Britain.

A medium that stands apart

The anti-establishment Mediapart stands out among startups, say Bruno and Nielsen, for its large newsroom staff of 25 and its near-total dependence on subscriptions of 9 euros a month to generate revenues.

It is known for its campaigns against the notoriously incestuous connections between France’s mainstream media and political and financial interests, they say. This may explain part of its success: it is willing to report on subjects considered taboo by mainstream media.

“Plenel [the editor] has declared that journalists working on stories that might expose political scandals are subject to an ‘all-out surveillance campaign’ by the security services and orchestrated from the Presidential Palace, including ‘phone-tapping aimed at establishing a list of their contacts and relations’.”

Mediapart’s critics have accused it of a left-leaning bias as well as hypocrisy for accepting 200,000 euros in government subsidies in 2009 and 2010, according to the authors. In recent weeks it has come under heavy fire from Sarkozy and his supporters for the Libya story.

Three years of losses

The publication launched in March 2008 after a campaign to line up 10,000 paid subscribers. In its first three years it lost a cumulative 6 million euros, but it made a splash with an investigation of how a key Sarkozy supporter supposedly was helped to avoid paying taxes.

Bruno and Nielsen conclude on a cautionary note:

“With almost 60,000 paying subscribers, it seems that Mediapart has found a niche and a loyal and interested audience that can sustain it (especially if it manages to diversify beyond subscriptions alone). As long as the readership is willing to pay, the site just may avoid further entanglement in the kinds of political patronage, corporate cross-subsidisation, and state support it has been so critical of.”

Europe’s innovations

It isn’t clear that a model like Mediapart’s could translate to the U.S. or that it would need to. The U.S. has a much larger foundation sector than Western European countries and a preference for private solutions rather than state solutions to social needs.

Propublica is the prime example of the nonprofit model, aided by foundation grants totaling more than $10 million a year. And the trend in media seems to be toward a public service model for journalism like National Public Radio, which taps multiple revenue sources beyond sponsorship.

Still, European models like Mediapart challenge many of the assumptions we have in the U.S. about how to pay for high-quality journalism.

Tags: business models, digital journalism, English, France, investigative journalism, Mediapart, Oxford, paywall, Reuters

James Breiner: Entrepreneurial Journalism

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