Beacon, an Online News Startup, Wants to Put a Face on Paywalls

It’s not subject to much debate that the journalism industry is still struggling with the Internet. After value shifted from in-depth, quality content to what's going to go viral and rack up pageviews, there's been a resultant dilution of the Fourth Estate that has subtle but serious political and socioeconomic ramifications for society. It's hardly a new lament, and thankfully we've begun to see a resurgence of in-depth, detailed stories online. But one question remains for digital publishers: How do outlets afford the time and effort?

“I think that a trend we saw from the blogging revolution was hey, stop charging for this, make it free, and earn your living on ads—and for many, many journalists, creators, and publishers, that was a massive failure,” Adrian Sanders told me. Along with Dmitri Cherniak and Dan Fletcher, Sanders founded Beacon, a journalism website they hope will empower (read: pay) writers to pen the nuanced pieces that are still having difficulty getting financial support in today's media landscape.

At the core of Beacon’s business model is the reader-writer relationship. Beacon readers can fund individual writers at a rate of $5 per month. That monthly payment, though supporting one particular writer, then gives readers access to the entire site—which includes some 30 journalists from more than 20 countries. Paywalls have been met with varying success, but Beacon thinks that by making the sponsorship more personal, it will help readers better understand how their subscription funds better stories.

“The open, free web promised us an ocean of different perspectives and thought, but because of the lack of economic models we're instead seeing a consolidation of thought based around status quo and casting the widest net. So instead of in-depth or insightful journalism you get spin, aggregation, and cat videos,” Sanders said.

Beacon's model relies on having solid writers with good reputations, and its initial lineup doesn't disappoint. Mujib Mashal, an Afghan native, writes about life in his country today. Kiera Feldman looks at power relations among institutions and people, and uncovers what these major blocks do to cover their tracks. Aaron Gordon is writing about soccer’s emergence in America and the global tension surrounding the sport. And Alison Bruzek focuses on “science in the city.” You get the idea.

The relationship between readers and journalists is fostered through social media then grounded in the economic exchange over the site. “I think things like Twitter and Facebook have shown us all that people do value that reader-writer relationship, not just the story and the byline,” Cherniak told me.

Writers and reporters have their own personalities and often large followings on social media, and can regularly interact with a specific audience. “Now it becomes much more about identifying voices I personally like, rather than relying solely on news brands to do that for me,” said Fletcher.

Beacon's founders posit that part of the reason the paywall system has been slow to take off in the US is because the product behind it isn't good. Subscribers may not want to pay $5 a month for a bunch of different content sites, but they might for one, high-quality destination. They hope Beacon is that sweet spot. But will people pay $60 a year for journalists they can read in other places?

In a blog post titled The Golden Age of Paid Content, The Browser editor Robert Cottrell wrote, "Readers will pay for content online so long as three conditions are met: 1) The content is worth paying for. 2) The price is low. 3) The transaction is easy."

Beacon will put Cottrell's theory to the test. The founders are banking on the fact that people have always been willing to pay for quality. ”I liken it to McDonalds versus something like Whole Foods,” Sanders explained. “Do I think McDonalds is bad, or will go away? No. But would I pay more for something of quality, or something that suits my particular taste? Yes.”

It helps that Beacon's costs remain pretty low. The startup is currently self-funded, and right now the team is small, with Fletcher managing the writers and community, Sanders covering the business end of things, and Cherniak on the tech side. As of right now, infrastructure costs are low, and Fletcher says they’re confident in their Cherniak's technical expertise can keep the company going for “a very long while.”

To keep the lights on and servers running, Beacon takes a minority cut of the subscription fees each writer generates. Fletcher said that while he'd prefer not to state the exact percentage, but he did say that Beacon is looking at models like Apple's App Store, which takes a 30 percent cut of app sales, for pricing guidelines. Splitting the revenue with writers directly also helps Beacon cut the initial cost of staffing a newsroom.

It remains to be seen if the company's unconventional method of funding can sustain a business.  “What's important to us now, rather than hitting any exact number, is just showing growth—getting more writers interested in the model, and helping the writers we have on board get more subscribers," Fletcher said.

The idea is that the direct exchange of money for value between reader and writer will keep the site from becoming yet another content farm. The paywall adds to the “Whole Foods" approach. “Our content isn't open to crawl for all," said Cherniak. "Right away that changes the dynamics dramatically."

Though many still cringe at the notion, people are becoming increasingly accustomed to paying for online news as more publications opt to go the paywall route. We’re already seeing this in Europe. The way Sanders sees it, there isn't any other option for some publications. "They can't beat Buzzfeed, etc. at the pageview game, and they don't have the sort of arsenal of media properties that someone like [Motherboard parent company] VICE has," he said. Can individual payments from reader to writer provide an alternative business model?

The potential for writers is certainly tantalizing. On Beacon, one writer could have 1,000 subscribers each paying for, say, six long-form pieces a year. That’s enough for the author to live on and to focus solely on writing detailed, informative pieces—if they can earn the subscribers.

Jonah Engle, another Beacon writer who works to uncover the complicated issues of drug policy, said, “Speaking for myself, I have spent an inordinate amount of time pitching and waiting for editors to respond, when I should be reporting and writing. And when outlets do respond positively, often the expectation is that you produce a piece at rates that don’t even cover your costs, and sometimes for no money at all.”

What's more, whether you’re writing from Aleppo or Gaza or Rome, some editors see no difference. You're still paid the same per piece, even in places like Syria, wrote Francesca Borri in a Columbia Journalism Review article on female freelancers in Syria. She described the scene:

So, sleeping in a rebel base, under mortar fire, on a mattress on the ground, with yellow water that gave me typhoid, costs $50 per night; a car costs $250 per day. So you end up maximizing, rather than minimizing, the risks. Not only can you not afford insurance—it’s almost $1,000 a month—but you cannot afford a fixer or a translator. You find yourself alone in the unknown. The editors are well aware that $70 a piece pushes you to save on everything. They know, too, that if you happen to be seriously wounded, there is a temptation to hope not to survive, because you cannot afford to be wounded. But they buy your article anyway, even if they would never buy the Nike soccer ball handmade by a Pakistani child.

It comes down to a fundamental quandary in digital journalism: Ads don't make enough money to consistently pay for large-scale pieces. That means editors are left with smaller budgets, which means squeezing reporters for more work and less pay, unless an alternative model can be found.

It's something Sanders and Cherniak learned firsthand with a prior venture, the iPhone storytelling app Backspaces. There, they realized that no matter how great the stories were, it was going to be hard to create a sustainable business model around them. They set out to shift away from the notion that going viral is king—which is the case when the number of views an article gets dictates its value.

“Some of our storytellers could drive 1,000 views and we knew it was the same people over and over, but we also knew they would never reach 50,000 views, and it seems so lame that 1,000 people find those stories valuable, but there's no way for the storyteller to make money," Sanders explained. "There's a lot of great stuff out there that does have an audience that should be supported.”