In Banyan’s pioneering approach to journalism, reader-owned cooperatives will own and operate community-centered Web news organizations that provide the community and its people with the reliable information they need to make their best life and citizenship decisions.
In Banyan’s model, the co-ops’ journalism will be free and open to all on the Web. Reliable news and information will be the co-ops’ membership marketing magnet, the gateway to an array of benefits that paying co-op members will enjoy.
Banyan has incorporated the nonprofit Banyan Publishing Corp. to seed and then serve news co-ops, primarily by licensing them powerful software that’s tailored for news co-ops, not only for publishing their journalism but also providing automated marketing and tracking of co-op memberships, including processing of online membership payments.
Distinctive Nature of Co-ops
What’s magic about cooperatives is that for a long list of industries they offer stable and replicable business models that work in economic settings too arid to support for-profit models — the kind of situation many communities are experiencing with journalism after six grim years of plummeting newspaper advertising revenue that’s led to drastic cutbacks in original reporting.
Co-ops are neither investor-owned nor nonprofit. They take myriad forms and make up a growing but little-noticed segment of the U.S. economy —$3 trillion in assets, $500 billion in revenue, and $25 billion in wages. Most numerous in the United States are the more than 7,100 credit unions, which are owned by their depositors.
Unlike public broadcasting “members,” co-op members get an ownership stake, a vote and a share of any profits, although profit is not the point: co-ops are devoted not to investment aims but to serving their members’ needs, and they are democratic, governed on the principle of one member, one vote.
Advantages of News Co-op Structure
A revenue stream that is tapped by reader-owned cooperative newspapers in Italy, Germany, Switzerland and Mexico, and by listener-owned radio stations in Canada; Web journalism co-ops are just beginning to emerge in the United States. This revenue stream, when combined with revenue from advertising, is what will make Banyan-affiliated sites sustainable when sustainable ad-only sites are rare.
A rock-solid integrity that is the source of Banyan’s trustworthiness and for its distinctively relational and accountable approach to journalism. Consumer cooperatives are, quite simply, the most trustworthy ownership form. This is because they are owned by their end-users—hundreds if not thousands of a Banyan affiliate’s readers will own their news co-op the way a subset of shoppers own a food co-op and depositors own credit unions. The board, executive director and editor will be accountable to these owners, which is to say the community.
An amplifier for civic networking. The trustworthiness of the co-op structure, supported by carefully drawn standards, will remove friction from the online communities that will form around Banyan affiliates’ journalism, making the co-ops’ civic networking more effective and thus of greater value to readers. This will strengthen democracy, advancing Banyan’s mission.
A hands-on democracy workshop, further advancing the mission. Co-ops are democratic institutions; each member gets one vote, and at annual meetings they may cast votes to elect directors, who will hire a community news co-op’s editor and other staff. Banyan co-op owners will be true voting shareholders, in contrast to “members” of public radio and television stations or of nonprofits such as the Sierra Club. But democracy is more than votes cast, and community-level co-ops offer many ways for members to work together within the co-op and in the community it serves.
To attract and hold co-op members, the Banyan model counts on sophisticated marketing to monetize the value in the array of tangible and intangible benefits detailed below.
Most fundamentally, a new co-op’s has two parallel marketing goals:
1) attract a critical mass of readers through the efforts of its organizing committee, then encourage readers to use viral tools in Banyan’s software to pull other people into the gravitational field of the co-op’s journalism.
2) convert as many readers as possible into paying co-op members. The software will do much of an affiliated co-op’s marketing work: When a reader first clicks to rate an article or engage in the Banyan community, the software will respond in a minimally intrusive way to welcome the new reader and start getting her or him acquainted with Banyan as a co-op that supports its readers and their community. At this point Banyan’s servers will place a cookie in the new reader’s computer to track activity, then deliver automated requests to join the co-op that proceed through several steps as time passes and the reader’s activity evolves.
It is anticipated that as Banyan-affiliated co-ops mature the percentage of their readers who become shareholders will at least match the share of PBS viewers who become pledging “members.” The more deeply engaged in Banyan’s community reader/users are, the likelier they are to become shareholders. Drawing readers into deep civic engagement is a double success: It better achieves the Banyan mission, and it improves the chances of the reader becoming a co-op member.
A Banyan-affiliated news co-op must deliver enough value to its readers that a significant fraction will find buying a co-op membership, and making continuing annual payments, an irresistible idea.
The co-ops’ bedrock benefit will be journalism that fulfills Banyan’s value proposition—news and features that its readers will find relevant, respectful and trustworthy. But Banyan journalism is free to all who want to read it; the added value that will inspire readers to become members will come from further benefits, some tangible and some intangible. First, the intangibles:
Ownership stake: News co-ops offer a rare opportunity to own a chunk, albeit small, of a vital community institution; membership offers a sense of self-worth from helping to ensure the future of an institution that makes a constructive difference in a member’s life and community.
Civic network: A sense of belonging and power from using the Banyan software’s online civic networking tools to work with others to advance an issue that matter to them—and to make a contribution to their community.
Visibility: Banyan’s software will include a reputation algorithm that ranks people who comment or participate in their co-op’s civic networking spaces. The system will give more prominent display to comments from participants with higher rankings; being a paid-up member will add reputational points and thus boost ranking and visibility.
Integrity: In an Internet/cable news era that’s awash in exploitive and manipulative “journalism,” standing on the side of trustworthiness through the Banyan model’s approach to business and its relational journalistic practices will offer a sense of ethical rightness.
Accountability: A sense of control over the direction of the journalistic enterprise; each member will have a vote in the election of their co-op’s board, which will hire its editor and other staff.
Profit distribution: Each member will receive a share of their co-op’s year-end surplus. (The payments are expected to be modest; in some years there will be none.)
Voice in the Institution: Members get a vote and thus a voice in their co-op; they also will receive a regular newsletter about their site that not only informs them of developments but also asks their opinions and guidance about improvements in the site.
Discounts: Community-level Banyan licensees must, as part of their turnkey agreement, establish relationships with trustworthy local merchants willing to offer discounts to Banyan members.
Banyan will always be on the lookout for other benefits to offer its members.
Banyan expects to test many membership price points and payment options. We envision a basic membership costing $36 a year, which is works out to a dime a day, a vanishingly small amount even for the poor. A household membership would cost $60 a year; other membership levels would range up to $500 annually.
Price and Payments
A Banyan co-op site with 2,000 basic members would gain no less than $72,000 per year from membership payments alone—enough to pay the salary and benefits of the site’s editor, and then some. It remains to be seen how many members will choose the higher levels of membership.
As a Web-based service, all but a few membership payments will be made online; Banyan’s software will process the online payments for licensed co-ops.