Can This Startup Fix Journalism’s Business Model?

Civil, a Brooklyn-based journalism network powered by blockchain tech, aims to launch a fleet of newsrooms

Matthew Iles, Civil CEO, at the startup's offices in Gowanus (Photos courtesy of Civil)

Media companies have made many attempts to “save journalism” in the past five years. First, there was the iPad magazine. Then there was Facebook (see how that worked out?). And don’t forget the magic bullet of pivot to video. Yet, with some notable exceptions, both traditional and digital publishers are struggling and cutting jobs, and reader trust in media is at an all-time low.

Now, Civil, a Gowanus-based startup, promises a path forward for journalists who want to do valuable work, make a living, serve readers, and spare folks the annoyance of spammy Internet ads and mind-numbing clickbait. To do that, it’s building an “Ethereum-based, decentralized marketplace for sustainable journalism.” (We’ll get to what that futuristic-sounding word jumble actually means in a minute.)  

Matthew Iles, Civil’s CEO and a journalism student turned marketing entrepreneur, says he realized a few years ago that each move designed to save journalism was “too tactical.” No one was addressing the larger problem: that most publications were powerless, bit players in a digital-media ecosystem almost completely dominated by Facebook and Google.

“They were way too late to recognize the hegemony of Facebook and Google, and that you couldn’t work within the system,” Iles says. “The only thing that would make a difference was a radically new business model.”

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Civil co-founders Julia Himmel, product designer, and Matt Coolidge, who focuses on brand strategy and communications

Enter Civil. Last October, the company announced $5 million in funding from ConsenSys, the Bushwick-based company that builds apps and businesses based on the Ethereum blockchain platform. Civil is using half of the money to seed “newsrooms” (its name for publications) directly, and the other half to build the technology and services to support them. The company plans to go live with its first newsrooms before the end of next month.

To readers, newsrooms will look like any other media website—though since they are reader supported, they’ll be ad-free. Users will be able to pay for subscriptions or make donations with credit cards, U.S. dollars, Euros, or the Ethereum-backed CVL token.

The Civil token is the mechanism by which journalists and readers will be able to participate more fully in the platform, which will be “co-owned and operated by users and journalists,” Iles says. All content will also be published on the Ethereum blockchain, which has a decentralized structure; this means content will be archived and tracked across too many computers to ever be taken down (say, by a vindictive billionaire).

Though much content will be free to read, token holders will participate collectively in governance of the site, ensuring newsrooms and individual journalists adhere to ethical standards and rules laid out in the forthcoming Civil Constitution, a framework intended to prevent things like fake news, hate speech, trolling, and inciting violence. Token holders can “vote” bad actors off the Civil platform, prevent newsrooms that may run afoul of the constitution from forming in the first place, and reward writers or publications doing meaningful journalism through donations or micro-tipping.

Any laid-off journalist will tell you it’s no easy feat getting people to pay to read when they can find so much for free on the Internet. While huge national publications have seen a massive uptick in subscriptions since the 2016 elections, the same can’t be said for most local publications, and digital-media companies like BuzzFeed, Vox, and Fusion are enduring fresh rounds of layoffs or portents of them. But Civil believes that giving readers a larger stake in the journalistic quality and financial outcomes of the platform will engender trust between readers and journalists–and those readers will be more willing to support newsrooms financially.

Popula will be among the dozens of newsrooms planned for the Civil network

Eventually, Civil sees itself serving as a sort of watermark, or protocol (a bit like Twitter’s blue check mark), to indicate trustworthy, accountable journalism. “We think of it as a notion of cleaving the Internet in two,” says Iles. “You have the Internet as we know it now, which is noisy, nasty, and full of misinformation. Increasingly people are becoming aware, if not frustrated and angry, about the current media ecosystem. If there’s a place on the Internet that could very clearly articulate that this is just journalism, and it’s being produced by journalists who’ve pledged to the constitution and are asking to work in service of you, that’s a different value proposition.”

Hot Takes on Civil, from Journalists on Civil

Attracting a large audience—and people who want to participate in the Civil marketplace through the use of tokens—means first attracting the type of journalists, and valuable journalism, that readers need and want. At launch, Civil will focus on three areas it currently sees as underserved.

“When you think about content and if it’s worth the money, the question is, ‘Can I get this anywhere else?’” says Iles. “Our strategy is to go after local, policy, and investigative news, where we think there is a dearth. They’ve been hardest hit over the last 20 years, and in many cases have evaporated.”

Though businesses typically fail for lack of demand, Iles doesn’t believe that’s the case here. The problem is that the business model simply doesn’t support quality, time-intensive reporting. As any journalist who’s worked in digital media or any reader who’s gotten sucked down the garbage-strewn Internet rabbit hole understands, clicks are king. “Ad-driven revenue models have not translated from print to digital,” says Civil co-founder Matthew Coolidge. “Civil is about finding a better and more sustainable funding model that doesn’t force you to write about the Kardashians to get the clicks to satiate Advertiser X.”

Civil worked with partner Old Town Media, founded by ex-Politico editors, to hire journalists and establish 15 “first fleet” newsrooms ahead of launch; together, they employ more than 100 full-time journalists. Civil’s recruiting pitch is appealing enough that it has attracted a splashy, seasoned roster of journalists.

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Iles says that selling journalists on a crypto-based platform got easier as the technology gained traction

Maria Bustillos, who’s written for The New Yorker, The Awl, and The New York Times, and has covered cryptocurrencies since 2013, is the founding editor of Civil’s first newsroom, Popula.com, which bills itself as an alt-weekly type publication for a global audience. Sasha Frere-Jones, the former New Yorker music critic, and A.J. Daulerio, the former Gawker editor, among others, join her.

For Bustillos, the distributed, blockchain element of the project–and its promise to protect content from censorship or outside control–was a compelling feature. She also likes to dabble in crypto and seems eager to have a stake in it. “It was apparent to me that the important and significant part of crypto has more to do with record keeping than with banking,” Bustillos says. “This is a way of creating unfalsifiable records; as journalists, that’s interesting.”

In our podcast, ConsenSys founder Joseph Lubin explains how Ethereum is a platform with applications well beyond cryptocurrency 

The cooperative ownership and governance aspect also has appeal for Bustillos after what happened to DNAinfo and Gothamist, which were abruptly shuttered by owner Joe Ricketts after their employees voted to unionize. (Gothamist relaunched last week as an arm of WNYC.) “If your outlet is owned by a billionaire who suddenly decides to close it down, you have no recourse,” she says. “A huge part of this is about creating a model where an outlet can present itself for inclusion and be approved by a community.”

Mazin Sidahmed, co-founding editor and senior reporter at Documented, a Civil-network site covering immigration and national security issues in New York City, says Civil has provided extensive support, including a financial grant, as well as as the technology on which to build the site and assistance with design. At the same time, Civil remained agnostic about both content choices and business model. Documented plans to solicit reader donations at launch, and eventually may move into a “pro” model that charges for news of interest to subsets of readers, like immigration lawyers.

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“There’s a lot of freedom to experiment,” Sidahmed says. “There’s no one dictating anything, setting requirements on copy you have to write or the business model you need to use. It’s empowering for us to create something we’ll be proud of.”

Coolidge says sites across the network have chosen a variety of revenue models, including metered (offering a few articles for free), pledge (like public radio), or straight monthly subscriptions. By year’s end, Coolidge expects “a couple hundred” community-approved newsrooms will exist on the Civil platform, and the Civil homepage at that point will function like a Netflix or Airbnb homepage that helps readers surface curated newsrooms that will interest them.

Iles acknowledges that selling journalists on a crypto-based platform was a lift initially, but as crypto gained traction and visibility, it has gotten easier. To some, it’s even part of Civil’s appeal. “The [media] industry is going through a cosmic shift right now, so this has as good a shot at succeeding as anything else,” says Popula’s Daulerio, “perhaps more so just by virtue of a different funding model.”

Erin Schulte is a freelance editor and writer living in Brooklyn. A former senior editor at Fast Company, she has written for the Wall Street Journal, the Washington Post, Entrepreneur, Parenting, Backpacker and Harper’s Bazaar, among other publications