ProPublica General Manager Richard Tofel joins the podcast this week to discuss the future of the news industry and where ProPublica's work fits in as a leading nonprofit outlet.

Although Tofel emphasizes that ProPublica alone cannot save the news business, he does foresee nonprofits playing a crucial role in advancing journalism as print newspapers continue to decline in the face of current and future recessions. Specifically, he believes some kinds of journalism have become 'public goods' -- much like ballets, history museums, and the symphony -- and we need to find ways outside the market to fund them.

"The bad news is, I think that some kinds of journalism are going to need that kind of support," Tofel says. "The good news is that I think all those cultural institutions are strong proof that that is possible."

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Transcript

Mike Webb: Hi, I'm Mike Webb. Welcome to the ProPublica podcast. Last week, ProPublica's General Manager, Richard Tofel, did an interview on TheBrowser.com about the changing business of journalism. So we decided to ask Mr. Tofel, the man I report to here at ProPublica, to talk with us on the podcast about our work and how that fits into where he sees journalism going in the future. Tofel has worn many different hats in the news business, including working as the assistant publisher of the Wall Street Journal, as well as an assistant managing editor of the paper, vice president of corporate communications for Dow Jones & Company, and an assistant general counsel of Dow Jones. Before joining ProPublica, Tofel served as vice president, general counsel and secretary of the Rockefeller Foundation, and earlier, as president and CEO of the International Freedom Center. He's also the author of several books, including his latest, "Eight Weeks in Washington, 1861: Abraham Lincoln and the Hazards of Transition". Welcome to the podcast, Dick.

Richard Tofel: Thank you very much, Mike, good to be here.

Mike: All right. Well, why don't we start with your role at ProPublica. Can you tell us a little bit about your responsibilities here?

Dick: Sure. Basically, Mike, I run the non journalism operations here. So I report to Paul Steiger, who's our CEO and also our editor in chief. But I'm responsible for a full range of functions from budgeting and finance and HR and legal, to communications and also development.

Mike: ProPublica was created because of a crisis in the news business, in a specific sense that relates to investigative journalism being squeezed out. In a broader sense, that happened because the economics of the news business are changing. Do you think ProPublica's non profit approach will help save the news business?

Dick: I don't think that ProPublica, certainly, alone, is going to save the news business, and I don't think that non profits alone are going to save the news business. But I think there is a role for non profits, not only to respond to the crisis that's really been gripping journalism economically for the last five years, but on a continuing basis from here on out. And basically, I think the way I look at it and the way we look at it is that some kinds of journalism have in effect become public goods. Which is to say, the market is no longer producing them, it's not going to, and we need to find ways outside the market to fund them. And that's happened for many years with all sorts of public goods in this country. A very, very wide range of cultural institutions, for instance, the symphony, the ballet, history museums, art museums, theater companies. And that happens all over the country, it happens through economic cycles, and part of it is philanthropic support. And the bad news is, I think that some kinds of journalism are going to need that kind of support. The good news is that, I think, all those cultural institutions are strong proof that that is possible.

Mike: Do you think that ProPublica is partly responsible for the growth of non profit journalism with things like MinnPost and Texas Tribune?

Dick: Some of those things, MinnPost, for instance, was here before ProPublica. Some of them, I think... Texas Tribune, your other example, has said quite openly that to some extent they're modeled on ProPublica. I think we've had something of catalytic role in a number of ways. One, we were able to reach high profile partnerships with existing news organizations, at a frequency and a depth and at a level that people had not been able to do before.

Second, very frankly, I think we've had more impact than a lot of people operating in this field have had before, at least very often on a sustained basis.

And third, we're not in business to win prizes. But winning a couple of Pulitzer prizes has demonstrated something, I think, quite important about the potential for online news organizations in general, and for non profit news organizations in particular.

Mike: And I think it's made fund raising a little easier for us.

Dick: Well, and that was also a big difference at the beginning. ProPublica was started with a commitment from the Sandler Foundation for up to $10 million a year for up to three years. That was a much more considerable commitment of resources than had been available to any nonprofit news organization in this country up to that time, which was the fall of 2007. We brought along other funders from the very beginning, and we've had more and more of those. But those kinds of resources really did, I think, indicate right from the get go that we were talking about operating at just a greater level of scale.

Mike: Now, in your interview with TheBrowser.com, you agree that newspapers are in big trouble. What's the biggest problem facing daily newspapers today?

Dick: Well, advertising, in one word. I do, unfortunately, think that print newspapers... I want to distinguish here between news organizations that grew out of newspapers and print newspapers themselves. I think that print newspapers are going to disappear faster than most people, at this point, think is possible. To me, the surest sign of what the problem is... We're now in, what? We're in the eighth, maybe, quarter of recovery from a perspective of gross domestic product, something like that, eighth quarter, maybe the seventh quarter. And newspaper advertising revenues are still going down. That has never happened before. Newspaper advertising was a cyclical business. When I was in the newspaper business at the Wall Street Journal we had a very strong idea of how it related to the macro economy, and that has simply disconnected so that, even when the economy is growing, newspaper advertising is shrinking.

And of course, one thing that we need to remember is the economy itself is still cyclical. So in the next recession... And the next recession, how far off can it be? One year, two years, five years? In the next recession I think you will see some really unfortunately terrible things happen to print newspapers.

Mike: And is this all related to declining circulation? Is that...?

Dick: Well, that's part of it. I actually think... The reason that I said advertising in one word is I think it is more of an advertising phenomenon in the sense that advertising has been transformed by the Internet more radically than any other part of publishing. And the pricing for it has simply collapsed. And alternatives, obviously, have grown up. And newspapers are still getting more than their, what some people would say is, fair share of total advertising. So I think most of the problems, both in pricing and in quantity, are on the inside. But it is also surely true that the erosion in newspaper print circulation that began 20, 30, 40 years ago has very much continued and, by some measures, accelerated. And obviously, when circulation is falling, that doesn't help advertising either.

Mike: Now, you sound very optimistic that readers are going to migrate to reading newspapers online. Can newspapers adjust and make the advertising work from online readership?

Dick: Well, not at the same level of revenue, and that's the trick. But those are, I would say, two different questions. The first is, "Are readers moving online, and are they willing to find quality sources?" Yes, they are moving online. Yes, they are willing to find quality. Yes, they are willing to read long form, for instance. I think there's increasing evidence of a very strong, maybe even resurgent, demand for quality long form. There are all sorts of news ways to deliver it, and the delivery of it is getting easier and more flexible. And the aggregation is getting more rich, people are getting a better idea of how to do clever aggregation. So all of those things are good. The problem is that the rates for advertising online simply don't compare to those in print. There is no reason to think they ever will, at this point, I think. And so, I do see a reader transition. I think that it will come at an economic cost.

Mike: So are pay walls the answers, is that how newspapers can make up the difference?

Dick: They may be. This, to me, is one of the hard questions. I count myself in the group that regards there having been a mistake made in the mid to late 1990s about whether to charge. As you know, probably, at The Wall Street Journal we held out against that. The Journal always charged, or almost from the very beginning. I think it was the right move, and I think the Journal still benefits from it enormously.

Mike: But was that because of the demographics of the Journal's readership?

Dick: It was really actually because of a rather stubborn insistence by the publisher of the Journal that he simply wasn't going to give away his product. And it didn't make any sense to him why you would work so hard and create something of such high quality, and then turn around and give it away to people. But everybody else pretty much went the other way, and they kept going the other way for 15 years. Whether it is now too late to turn people around, I think, is going to be one of the great questions of 2011 and maybe 2012. I think the jury's still out on that.

If you could get readers, in general, to pay for content, it would very much change the business. And that's possible. What I would point people toward is TV. When you and I were growing up... When we were little, if you'd said to people, "One day, in your adult lifetime, everyone will pay $100 a month to watch television," you would have said that that was insane, that no one paid money to watch television.

And now, almost everyone in America does that without blinking. So you can... It's conceivable. And if you can change it, then the economics of the business change radically. But if you can't, then we're headed to a very different place.

Mike: Do you see a day when ProPublica would either charge partners for stories or put our content behind a pay wall and charge readers?

Dick: Two different questions. On charging readers, as I say, if the general expectation is that people will pay for content online, then it becomes like cable television, then frankly, sure. Absolutely. It would make a very big difference in our ability to sustain the operation. And I think if readers generally understood that you pay for quality content online, I don't think we'd meet a lot of objection. We're not going to be the second or third news organization to do that. We neither have a brand that's yet sufficiently well known, nor are we producing enough content in quantity, I think, to be the second or third news organization. But the second or third hundredth news organization? For sure. And maybe quite a bit before that.

Your other question was whether we would charge partners. We've done a little bit of that, and we have no philosophical objection to doing it. But it's a question of working most efficiently with partners.

We've had some hesitance about this from the very beginning. One of the great things about ProPublica's publishing partnerships is they are really strictly editor to editor relationships. They don't involve the business side of our partners. And having been on the business side of some big news organizations, I don't think, frankly, they bring a lot to the table that's good from our perspective, or from our readers'. I think they tend to slow people down. They tend to make people conservative in all sorts of ways. There's a little bit of a built in bias against it on that side.

And then there's the very practical question. Those non profits that have been charging partners for stories, frankly, have been getting very, very little money for it. So it's a very different practical question. If the sums you could get back would go a long way toward paying for the stories, but no one's had that experience yet.

Mike: Are you surprised that other news organizations have been so willing to use ProPublica content?

Dick: No. The reason is, I think, that there is a general awareness in the publishing business that people need to present the strongest possible mix of content they can. That the world has gotten increasingly competitive. That people expect curated packages, in effect, from almost everyone at this point. I felt from the very beginning that, if we could produce content at a high enough level of quality, that we would not have a problem with getting partners to publish it. Once I saw the kind of staff we were able to assemble, I really had no doubt we could produce content at that quality level.

Mike: Next month is the third anniversary of ProPublica, and our first partnered story. How many partners have we worked with so far?

Dick: About 78.

Mike: And that's 78...?

Dick: 78 that are still in business and three that aren't.

Mike: What's your biggest surprise about working at ProPublica and how things have worked out so far?

Dick: That's a good question. I guess how fast the place was able to evolve, how fast we were able to get up to the level of playing as a serious news organization that we have. One thing we focused on, as you know because you've been an instrumental part of it for the last year or two, is having established our basic business model, we're trying to get ourselves in a position where publishing with partners is great -- it's a very, very important part of our business model -- but where we could also publish stories simply to our own site and still reach a key audience, an audience of influentials, an audience of deeply interested people in particular subjects like hydraulic fracturing, or Guantanamo, or the Mumbai attacks, or regulation of health care in one part of the country or across the country. I guess I'm surprised at how quickly we were able to do that.

Mike: The question that I'm most frequently asked is, "What is a story with moral force?" That's in our about section that describes us. What's your description of that?

Dick: Moral force is a phrase that Paul Steiger used, not infrequently, when we were at The Wall Street Journal. It's his in this respect, and what he always says is that stories with moral force are stories that are about abusive power or people who have failed to live up to the public trust. Not just about business and finance, but across a wide set of definitions of what power means, and that the highest purpose of journalism is to try to re balance, to give a voice to people who don't have that kind of power, and to check the kind of people who do who may not be inclined to use it for the public good, but, instead, for their own private benefit.

Mike: All right. Well, Dick, it's been a pleasure to have you on the show. Thanks for joining us.

Dick: Mike, thanks again.

Mike: To see more of his conversation with TheBrowser.com, visit ProPublica.org/Tofel. And now for this week's Officials Say the Darnedest Things Tumblr quote of the week. "The absence of public ethics scandals seems to be more a consequence of luck than good planning and action." Where was it said? In a 2008 internal review by the International Monetary Fund about the sexual conduct of some of their senior managers.

OK, thanks for listening. Thanks to Minhee Cho for producing, and thanks to all the people who pay for the news they consume. For ProPublica, I'm Mike Webb. We'll see you soon.

Transcription by CastingWords