News organizations should always have been democratically controlled member cooperatives. Now's our chance to make that happen.

If we can figure out a new business model to support real journalism, we can create a better kind of journalism institution. And that could be just the start.

published: October 29, 2020 - last updated: November 13, 2020

I'm sure you'll agree with me when I say this: the news media is broken.

The internet age is destroying local news and traditional newspapers, causing them to close up or be absorbed by big media conglomerates. Robust pro-social journalism is having a difficult time thriving. Fake news is spreading out of control across the wastelands of corporate social media. And the news that's left is toxic, overwhelming us all with a firehose of crime and calamity and violence and division, distracting and dismaying rather than actually informing us.

But I think I have an idea to solve these problems, and it began with an interesting twitter thread...

§ A viable solution for internet news?

This thread from Victoria Canada based investor/entrepreneur Andrew Wilkinson (opens new window) describes how he has successfully and profitably "replicated the local newspaper" with a simple daily email newsletter. The key seems to be focusing on a smaller quantity but higher quality of news items, and using email as as cost-effective and convenient delivery mechanism. The model is incredibly simple, and many of the thread's commentors point to examples of similar models working in their area.

The most important takeaway for me is this: people are still interested in local news. Wilkinson's efforts demonstrate that citizens want to know what's happening in their city, but the quality has to be high. They don't want a bunch of lousy ads, they don't want inane filler and phoned in national coverage, and they don't want to pay the high price necessary to maintain a legacy institution with its old business model.

I was very encouraged reading this! It is indeed possible to save local news, help us all reconnect with the cities we live in, and perhaps save journalism itself. All it requires is a rethinking of the model.

But then I became worried.

§ Is this better or just new?

I was disappointed to find that Wilkinson's company has a clearly stated focus area in "crime". That may seem natural, but you should take a moment to read about the Mean World Syndrome (opens new window) (or just watch Nightcrawler (opens new window)), to understand that crime, accidents, and other calamities aren't actually useful news, but a marketing hack targeted at the lower parts of the psyche, meant to drive ratings rather than enrich the audience. This phenomenon has historically been called Yellow Journalism (opens new window) (although that term also encompasses many other problems), and it isn't unique to the internet era, but taints any kind of short-term for-profit media. I would also argue that "horse race" style political coverage is similarly toxic.

Responsible journalism could potentially include civic metrics such as the per capita crime rate or number of deaths from illness or injury. And of course reports of active dangers that people can proactively respond to are useful. But individual lurid stories are hardly informative.

Wilkinson's model is also completely ad-supported. I don't feel it's controversial to assert that advertising has an inherently toxic effect on news (and media in general) (opens new window), pushing outlets to sanitize their coverage of any real social critique, and do everything in their power to package up the real product, your time and attention. Manufacturing Consent (opens new window) pointed out these problems in 1988, long before the internet supercharged these dynamics and forced them into our collective faces.

This presents a problem. Not only has the internet era hollowed out much of the news media, especially at the local level, but even that old news media was full of worrying incentives and short-term thinking. And the new model discovered by Wilkinson and others doesn't promise a solution. Although Wilkinson himself seems to have more philanthropic intentions, he can't do that everywhere. The model more represents an interesting progression for the business of news, and it isn't an improvement for citizens. It's likely that others will follow behind him, various Silicon Valley types with hundreds of thousands of dollars ready to deploy on a whim to overtake their city's legacy newspaper. And they aren't likely to be a triumph of the public interest, but merely another turn of the wheel of capitalism, the old ownership class being overtaken by a new one.

Profit motives shouldn't determine the news. It's too important to trust to rogue entrepreneurs or corporate executives or attention extracting algorithms.

So what do I suggest?

§ Member cooperatives are the best way for news to work.

What exactly is a member cooperative? If you have any experience with credit unions you're at least tangentially familiar with member cooperatives, but here's the definition given by the International Co-operative Alliance:

A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.
- International Co-operative Alliance (opens new window)

And another less terse description:

"Not for profit, not for charity, but for service" is one common way that credit unions differentiate their activities from those of other economic enterprises, and it works well as a concise and accurate descriptor for the whole cooperative sector. Cooperatives are business enterprises, not charitable organizations, so they are not the same as non-profits; yet they do not exist to maximize profits, so they are not the same as investor-owned firms. Cooperatives are enterprises that are democratically owned and controlled by the people who benefit from them and are operated collaboratively for the purpose of providing services to these beneficiaries or members.
- Margaret Lund, in Cooperative Equity and Ownership: An Introduction (opens new window)

The concept of a member cooperative has been around for over 150 years, and it's become surprisingly prevalent, especially outside the United States. Here's a link about the movement and the International Co-operative Alliance if you're interested. (opens new window)

So member cooperatives are effective and time-tested, and synthesize many of the best aspects of other organizations:

  • Like non-profit charities, they can have a true focus on the community and the values of their members.
  • Like for-profit companies, they are self-sustaining and provide real market value to their members.
  • Like democratic institutions, they can be extremely transparent, accountable, and responsive to their members' wishes.

I emphasized the "can" above to point out the largest weak spot of cooperatives: their similarity to political institutions.

§ Member cooperatives are like governments, but that doesn't have to be a bad thing.

Any discussion of voting tends to lead to frustrated sighs. We all understand the theoretical power of voting, but in practice it's difficult to see it actually lead to positive change.

But I don't think that's a problem inherent to voting or democracy. The typical voting mechanism we use in the United States is called plurality voting, which is arguably the worst group decision making method in common use (opens new window), and that terrible mechanism is made slow and inconvenient and insecure by a mishmash of technologies from the 1700's and the 1980's.

Modern political economists and game theorists have invented several forms of voting that are much more fair and responsive, and the internet allows us to conveniently leverage those mechanisms. I won't go into the details here, but there are three forms of voting that can be combined to produce much more fair and responsive democratic institutions:

  • Approval Voting (opens new window), which allows voters to express their preferences accurately and honestly regardless of how likely their favorite candidates are to win.
  • Quadratic Voting (opens new window), which allows voters to express how deeply they care about each issue in a mathematically balanced way.
  • Persistent Voting, an idea I came up with, which allows voters to update their vote at any time, rather than having to wait for a stressful and overly strategic election event.

The most common form of democratic control used by member cooperatives is elections for board positions. The members of the cooperative cast votes for board members, and the board members in turn appoint the officers of the company. In a world where voting is slow and unfair and inexpressive, these "indirect" systems that elect a layer of representatives rather than directly controlling outcomes make some sense.

But with better and more scalable voting systems in hand, we can use voting to make more decisions, and to make more specific decisions, allowing voters to directly control more aspects of an institution. In our hypothetical news cooperative, members could directly vote to choose the chief officers, their local editor, the "constitution" or governing documents, the prioritization of journalism effort, and any other useful decision you can imagine.

This topic deserves much more explanation, and in future posts I'll make these democratic ideas more concrete. For now, I've created a simple little website with a similarly simple demo of approval/quadratic/persistent voting for you to play around with (the user experience design is extremely suboptimal, I'm not a designer!) It can be found at (opens new window), and the source code can be found on my github account (opens new window).

§ We can build the next kind of news institution, but there are still problems to solve.

It isn't good enough to simply turn a news organization into a member cooperative and expect it to transform society. While it's surely true that a member cooperative can command more trust and authenticity, and get some people involved purely based on their civic interest, that isn't enough to sustain something meaningful. We have to find a business model that can deliver true value to members and address the challenges ravaging other news organizations. And that model's primary source of revenue has to be the members themselves, since otherwise it will just face the same problems with ads and the ever-changing ad market.

Here are some points of a business model I think might work:

  • Email newsletters are the main form of distribution since they're cost-effective, convenient for readers, and maintain control of the line of communication. Members can customize how often and when they receive their newsletters, and what topics they're interested in.
  • Quality is prioritized over quantity, since that's what actually serves members. The daily newsletters are very short and focused on actionable news and general headlines, and weekly newsletters focus on valuable in-depth reporting and analysis of all kinds.
  • Anyone can sign up for free, but free readers aren't full voting members, and their newsletters aren't customizable and include ads (mostly to bother them into becoming members!) When someone signs up as a paying subscriber then they become a member, can fully customize their newsletters, and the ads are removed.
  • Members can vote to prioritize reporting topics, so we have a balanced signal of what topics they care about.
  • Members can vote to prioritize technical product features, so we have a balanced signal of what functionality they care about.
  • Members can select the chief officers and make other governing decisions.

These are just the essential points, and don't come even close to a robust model. However I have some further ideas and at some point will post a follow-up with something more concrete.

And I'm sad to say, I'm fairly certain I'm not the right person to lead an organization like this. I have no experience with journalism or editorial management, and I'm already working on several purely technical projects that I feel better fit my aptitudes. But I had this idea and was excited by it, and perhaps someone else out there is better positioned to make it happen. I'd love to be involved in some way!

§ This could be just the beginning.

I powerfully believe that member cooperatives are a model capable of empowering citizens and producing equally distributed prosperity, and that they should occupy a central role in our economy. I believe member cooperatives haven't been used to their full potential, largely because democratically coordinating large groups has historically been so difficult.

That doesn't have to be the case though. The ubiquity of credit unions demonstrates that once an idea has been validated, it can spread widely. I'm convinced that a world where member cooperatives have reformed almost every industry is possible, but that dream requires leadership and effort to get the ball rolling.

I'm also excited by the idea of applying the tools and methodologies of the tech startup world to cooperatives. Software has been eating our world for decades now (opens new window), and has been doing so entirely for the benefit of entrenched capital interests and myopic entrepreneurs (opens new window). It's time for those tools to be deployed for the benefit of the citizenry, in service of values and community and not corporate profits. The only way to achieve that goal without it being co-opted or distorted is for the citizenry to be in direct control.

I hope to not just help build this individual journalism cooperative, but also tools and systems that allow us to create a larger alliance of technologically competitive cooperatives across many industries. I hope this could be the foundation of a true sea change in our culture and economy.

As they say, the best way to predict the future is to create it.