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March 28, 2017, 9 a.m.
Business Models

Newsonomics: Can Dutch import De Correspondent conquer the U.S.?

It’s built a membership-driven model that produces trust, connection, and good journalism. But can it extend that approach to the hurly-burly of the American media market?

What if life were simple for journalists? They cover what they want to cover, developing deeper expertise in the fields that intrigue then. They get paid by those who actually want to read their work. And they regularly talk to their readers, bouncing ideas off of them and hearing ideas back. Those with long memories will recall that was one of the promises of the early Internet: disintermediation. In one version of the pipe dream, the web would blow away all those troublesome middlemen that stood between journalists and readers.

Two decades later, that early idea became largely dormant. Every once in a while, a blogger/journalist like Andrew Sullivan would forge that direct-to-reader connection, but such examples haven’t written themselves deeply into history. Rob Wijnberg and Ernst-Jan Pfauth believe they can make a version of that promise real. In fact, they believe they already have.

Today, the young entrepreneurs behind De Correspondent announce their landing in the U.S. The promise is a big one: Import the four-year-old Dutch news startup’s model into a much larger market, bringing the same membership-driven principles that have brought the duo attention from around the world. If all goes well, The Correspondent will launch in the U.S. next spring.

Pfauth, the 31-year-old publisher of De Correspondent, describes the two keys to the site’s approach. “First, it’s trying to be that antidote to the daily news grind by actually covering structural developments…and secondly, doing that in the best possible way by tapping into the knowledge of readers.” The business model flows from those editorial decisions: “We have a different perspective on what is newsworthy. It’s not sensational but foundational. To uncover the foundation, though, you have to work with the people who read you and who are members. The third part is the business model, because the whole ad-free member-funded model is the only way you can sustain this kind of journalism.” Relying on ad revenue, he says, forces publishers into a more sensational mode.

That pitch has worked so far in the Netherlands: De Correspondent can claim 56,000 paying members (at about $63/year) in a country with about 1/19th the population of the United States.

Both Wijnberg and Pfauth worked previously at NRC, publisher of two Dutch quality dailies, as editor of the morning paper and chief web editor respectively. The business partners are in New York City this week to begin laying the groundwork. Pfauth, Wijnberg, and their founding design agency partner Momkai each own a share of De Correspondent, and they’ll bring that for-profit, limited-profit model here. (The partners cap their profits at 5 percent, putting anything additional into the business.)

They both plan to move to the city in the fall, interviewing editor candidates and more deeply engaging with research, a high-profile project also makes their foray distinctive. That research is funded by a $515,000 grant announced today, with the Knight Foundation, the Democracy Fund, and First Look Media each lending big name support and money to the Correspondent project. (This grant is part of a much larger $12 million in new Democracy Fund/First Look funding, which also provides $3 million each to Center for Investigative Reporting, Center for Public Integrity, and ProPublica.) At NYU, Jay Rosen will lead the research effort to see what makes for an optimal membership model and what lessons there might be for American publishers in De Correspondent’s experience.

As Wijnberg and Pfauth test U.S. waters, they’re sure they got one thing right in their first launch. “One important thing it is that we didn’t talk about journalism or ‘save our jobs,'” says Wijnberg, the 34-year-old editor-in-chief of De Correspondent. “We always talked about the service we would provide to readers.”

Almost all of its revenue in the Netherlands comes from members. These members would be called subscribers elsewhere, but many have a more intimate connection to De Correspondent than do typical newspaper subscribers.

Those without membership can’t access the site’s content directly — a paywall by a different name. The Correspondent sees reader payment differently than most in the trade. “We believe people don’t become members for ‘access to the content,'” Pfauth told me last week. “They become members because they want to be part of a movement/community.”

That principle also has led the site to its own model of virality and lead generation. How do non-members discover De Correspondent? “If you have the link to an article, you can read it,” says Pfauth. “Every member is free to share articles with friends and followers, since he/she financed the article. When a member shares an article, it’s basically a virtual equivalent of a newspaper clipping. Someone who clicks on a shared link can’t see the comments or navigate to another page, but is able to read the article. At the top, it says: ‘This article has been given to you as a gift by paying member [name].'”

Wijnberg and Pfauth say they’ll work through the results of the NYU membership research before finalizing their U.S. model. But the model will clearly draw heavily on their Netherlands experience. There, they broke records by taking in $1.3 million in startup crowdfunding within three weeks of their ask, eventually reaching $1.7 million overall.

The goal in the U.S. will be to remain membership-based and ad-free, with membership prices TBD. Why ad-free? That’s not simply a matter of reducing visual clutter (though the Medium-like simplicity of The Correspondent offers that) — it’s a share-of-mind question. “It’s a matter of focus,” says Pfauth. “We focus exclusively on the reader.”

How well does the site make good on its top-of-each-page promise, “Your antidote to the daily news grind”? Fairly well. The stories offer the sort of intelligence we’ve come to expect from such U.S. publishers as The Atlantic, Slate, and many others.

De Correspondent pays 21 full-time journalists — “Our pay is on par with market averages in Dutch journalism,” Wijnberg tells me — among its 45 total employees, who include developers, designers, and management. Its journalists cover topics broadly and smartly. (For a sense of the breadth of De Correspondent’s coverage, translated to English, check these stories out.)

These correspondents’ titles tell us a lot of how they see their jobs differently than traditional journalist beats: “Progress Correspondent,” “Sports and Analytics Correspondent,” “Technology and Surveillance Correspondent.”

One common thread is that relationship with readers. As one example, De Correspondent cites the work of its energy and climate correspondent Jelmer Mommers, who unearthed a 1991 Shell tape showing that company’s “detailed knowledge of the dangers of climate change.”

How did he do it? A reader shared it, one of a number of readers who had regularly engaged with Mommers. Mommers and The Guardian’s head of environmental coverage Damian Carrington joined forces on what became a Shell series, asking a big compelling question of our time: “If Shell knew climate change was dire 25 years ago, why still business as usual today?”

De Correspondent has shared its philosophy and strategy in several articles on Medium, which are worth parsing for those who want to understand the company’s 10-principle manifesto (halfway down on page) of the trade.

The big “puzzle” of membership

“Membership” is the key word in the NYU research effort announced today, the Membership Puzzle Project. De Correspondent’s business model is, strictly speaking, about subscriptions. It’s the degree of the subscriber’s engagement that defines a “membership.”

If the names of the Knight Foundation, Democracy Fund, and First Look Media — the latter two created by entrepreneur Pierre Omidyar (and, disclosure, the former also a funder of Nieman Lab) — reinforce the newsworthiness here, it’s Jay Rosen’s deep participation that signals another sort of relevance.

“It’s a knowledge exchange,” Rosen told me of the membership study. “We want to look at institutions inside and outside of news. We want to find fears, questions, doubts.”

It’s De Correspondent’s built-in connection to readers that attracted the press critic whose formulation of “the people formerly known as the audience” has been universally quoted, if too little applied. (But progress is progress. Even the stand-back-from-membership New York Times has gotten more interactive and intimate with its readers the past several years. Today, its app reminds readers: “Got a confidential news tip? The Times would like to hear from readers who want to share messages and materials with our journalists.”)

Rosen has spent his professional career thinking and writing about how to rebuild trust and connection: “If there is one through line in my work, it is the participation by the public in journalism.” In his piece explaining why he’s participating in this collaboration, Rosen devotes the most space to that core Correspondent principle of “journalist as discussion leader.”

The project will hire a full-time research director and use Rosen’s graduate students to reach out across the expanse of America to gather the successes and failures of membership models. They’ll range from 40-year-old public media models to the newly energized News Revenue Hub, led by innovative Voice of San Diego.

“We want to learn from Correspondent best practices and track the best of American learnings, from public media and more, including the Knight-funded Business Lab at WBUR,” Jennifer Preston, Knight’s vice president for journalism, told me Monday.

In a nutshell, the Membership Puzzle Project asks: What will cause tens of thousands of Americans to voluntarily pay for news reporting?

Will the transplant take?

On paper, Rob Wijnberg has at least a little American cred. He holds U.S. citizenship, courtesy of his father, who was born in Madison, Wisconsin. Wijnberg’s grandparents came to the U.S. from the Netherlands in the late ’30s, Jewish refugees escaping the Nazi onslaught.

“He came to the Netherlands when he was eight,” says Wijnberg. “I am a U.S. citizen because he was smart enough to get me citizenship when I was born. But I never lived in the United States.”

How will these outsiders deal with any perception that it’s arrogant of a couple young Dutch journalists to think they can build a new American news model? The publisher and editor are quite self-effacing, but they do believe their multi-faceted model offers something different in the U.S. landscape.

Says Wijnberg: “There is no platform I can think of that combines all these things together. There’s no author-centered, beat-oriented, ad-free, member community, a knowledge community that’s an interactive, member-funded platform — one that does all these things together.

So will a U.S. Correspondent work? It’s unlikely research efforts will uncover some secret sauce to unlock American wallets, though they will certainly get a better understanding of our market. Most important here is to take The Correspondent’s ideas seriously.

A year away from launch, it would be foolish to lay odds on its success. Better to lay out some strong pro and con arguments and review them in a couple of years.

Let’s consider three reasons it might work:

  • Harmonic convergence: In the age of Trump bumps and subscription surges, Americans are increasingly willing to open their wallets as they read the latest outrages on their smartphones. Money is pouring into everything from Meals on Wheels to Planned Parenthood, even as subscriber and public radio station membership grows at unprecedented rates. The Correspondent’s timing might be perfect. (In this piece, Wijnberg further lays out the argument for The Correspondent’s timing.)
  • A contemporary “United Artists” model of high-branded, expert journalism is ready to happen. Collecting lots of talented journalists, who could bring their audiences along, could make an attractive proposition, though it would be expensive to assemble.
  • Their high-touch approach fills a niche: With its emphasis on a continuous cycle of journalist/reader conversation, The Correspondent distinguishes itself from the quality national journalism pack.

And three reasons it might not:

  • It’s Dutch. Can an example drawn from a nation of 17 million play in a nation of 320 million? More than population, consider the considerably more diverse and messier U.S. landscape, as compared to Netherlands’ half dozen or so national dailies. Blendle, the pay-per-view article-selling business imported from Amsterdam, hasn’t seen its early Dutch success replicated in its U.S. launch. La Presse’s big tablet strategy, making a go of it in Montreal, hasn’t been as well received in Toronto.
  • It’s too small. With The New York Times and The Washington Post pumping out hundreds of original stories a day, can a staff of 20 journalists (if similar to the Dutch site) — or even double that number — make a sufficient case for support?
  • It’s too supplemental. I have little doubt that the U.S. Correspondent will produce articulate journalism worthy of attention. But getting big numbers of people to subscribe to a new brand — one supplemental to the other paid and free news sources of the day — will be tough. It’s taken Slate 21 years to build the audience loyalty to get to 30,000 members — though it means something different and more voluntary by membership.

I first met the Pfauth and Wijnberg at a Vienna journalism conference a couple of years ago. They impressed beyond their years in both their clarity and their journalistic ambition.

Last week, I asked them whether they had a notion, when they launched De Correspondent back in 2013, of bringing it to America.

“When we started it, this was always in the back of our minds,” says Wijnberg. “So in our founding principles, it says The Correspondent is about trying to uncover and highlight developments all over the world. It doesn’t really make sense anymore to talk about things happening in the world in a national sense. Of course, because you are a fully digital platform, there are no physical barriers anymore…you don’t have to stick to your own country.

“And, of course, the Dutch language is pretty small, so we are used to thinking internationally here, because our country is such a small part of the world…The Netherlands is a pretty small country and it’s a great place where you can start this kind of platform and develop it and see what works and what doesn’t work. But in the back of our minds, there’s always been the idea of slowly expanding into an international platform.”

That’s a unique twist on journalistic globalism — and one that’s a tonic in these weirdly xenophobic times.

For Wijnberg, it’s a game of bigger numbers and smarter journalism: “Right now we only talk to 23 million people, because that’s the number of people that speaks Dutch worldwide. If we start publishing English, then we have potentially a billion people who can add their knowledge to our reporting.”

POSTED     March 28, 2017, 9 a.m.
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