No Profit, No Problem

How a new city daily (on newsprint!) rolled

San Francisco, 2014—With the collapse of the business model undergirding the tradition of muckraking journalism—and the double-digit profit margins it supplied—most newspapers that survived the last five years did so by cutting staff, eliminating coverage areas, and hyping easy-to-report fluff. In the process, many U.S. cities lost their civic watchdogs. After slashing hundreds of journalists, many newsrooms became increasingly frivolous and irrelevant. Witness these lead headlines from the January 2014 San Francisco Chronicle:

Macy’s Fab Fashion Show: Day 6

Perfect Waves for 16th Annual Surf Competition

Man’s Best Fiend: Dogs Snacked on Victims of Nob Hill Double Murder

The San Francisco Public Press survived, however, by throwing out two assumptions deeply embedded in the DNA of corporate media. The first was the notion that newspaper owners had to make a profit. The second was that the journalism had to be subsidized by ads.

These insights helped this relatively new daily produce an increasingly powerful stream of quality journalism, with headlines like these:

City Overpaid $150 Million for Wind Contract, Records Show

Poor Patients Wait Longest in AIDS-cure Rollout

Golden Gate Bridge Workers Warn of Quake Weakness

What our profession discovered is that in the face of technological change, the ad market dried up much more rapidly than did readership. And also that these days, while many readers prefer to skim news sites for a small monthly fee on their iPhones, jPhones, and kPhones, demand for print did not disappear. In fact, as ad revenue plummeted, circulation revenue became an increasingly important piece of the shrinking pie. By 2010, circulation accounted for 40 percent of the average newspaper company’s income, up from 20 percent in the mid-1990s. So, despite the decimation of reporting staffs, newspapers’ loyal and aging subscribers became significant financiers of journalism.

When I first touted the idea of starting a nonprofit, ad-free newspaper in 2008, traditional media mavens were dismissive. Yet, supported by a small group of idealistic journalists and nonprofit professionals in San Francisco, the Public Press evolved from an online-only venture to a multiplatform news organization with a robust Web presence and a thriving print edition.

The Public Press is able to compensate for lower revenues by dramatically cutting production costs. Without ads, our twenty-four-page broadsheet has the same newshole as a sixty-page San Francisco Chronicle, yet costs half as much to print. Because our paper weighs less, we can deploy news carriers on all-weather cargo bicycles, making our delivery operation inexpensive and environmentally friendly.

The key to the Public Press’s business model has been cross-media, content-sharing alliances with other independent and public-media ventures. These include local public radio and TV stations, ethnic and neighborhood papers, and a slew of local foundation-funded, Web-only news providers. Our favorite columns are condensed transcripts of public-radio talk shows on KQED-FM and KALW-FM in San Francisco, dispatches from the staff of the Center for Investigative Reporting in Berkeley, and blog and vlog posts by writers at New America Media, which aggregates the ethnic press. Front-page state, national, and international stories come not only from The Associated Press, but also the nonprofit Christian Science Monitor, National Public Radio, and its statewide radio counterpart, “The California Report.”

Much like the ad-free Consumer Reports magazine, the Public Press is financed by the sale of papers (our print circulation is now fifty thousand on weekdays), supplemented by aggressive local fundraising drives and occasional foundation grants. At $150 a year, a subscription (we call it a membership) costs one quarter of what the Chronicle charges. And the street price of 50 cents can’t be beat. The Chronicle went up to $2 in 2013.

With just twenty-five editorial staffers competing against the Chronicle’s sixty (less than a quarter the number it had in 2009, and one-tenth its peak in 2001), the Public Press would appear to be outgunned. But because we focus on public policy, economics, and social trends—and seldom cover sports, fashion, or random context-less crimes—we have developed a reputation as a credible source of important news. And while other papers still chase advertisers with elaborate Sunday sections devoted to new homes, wine, and automobiles, the Public Press focuses its coverage on rental housing, the environment, local arts, workplace safety, public health, transit, and reviews of consumer products and services aimed at people of all incomes and backgrounds. The classified ads we print are a free public service through a partnership with Craigslist.

That trust relationship with the audience, pioneered by public broadcasters such as PBS and NPR, has paid financial dividends, in the form of 35,000 memberships. It’s only a start in a city of 750,000 and a region of more than seven million. But the home-delivered paper is essentially just a premium membership benefit; anyone can view our work for free at

It wasn’t quick or easy to get to this point. In early 2009, we were able to leverage a seed grant from the San Francisco Foundation to hire a part-time editor to coordinate more than a dozen volunteer journalists to start producing local news on the Web. We followed in the footsteps of online nonprofit news ventures such as MinnPost in Minneapolis, GothamGazette in New York City, and VoiceofSanDiego, building an audience by covering our region’s bread-and-butter issues.

By 2010, we’d raised a few hundred thousand dollars—enough to pay decent freelance rates and begin limited-run printings of our work to distribute in a few neighborhoods. In 2011, we ramped up to monthly, then weekly, while cajoling barely three thousand San Francisco residents to become member-subscribers.

The daily print launch in 2012 gave our reporters more cachet with sources. But it also allowed us to reach a whole new audience: the working-class population in San Francisco. Low-income folk are of little value to the luxury-goods advertisers targeted by traditional papers, and the Internet doesn’t ameliorate this because even in 2014, a third of that segment of the population has limited or no broadband Internet access at home.

Five years ago, who’d have thought that you could view CNN in 3-D through your sunglasses or live video-chat from your wristwatch? But such technologies are still more expensive than a newspaper and can’t be operated in the bathtub. And many of us who now rely on these gizmos have nonetheless sought to carve out some time offline. Like books, printed newspapers still have their place. Not only are most Baby Boomers still alive, but millions of them, newly retired, have more time to read.

Of course, we have a Web site that runs a twenty-four-hour HDTV Surround Sound City Council channel, and the standard Intelligent Agent, Suzy, who speaks plain English and guides archive searches. But it’s our sober, in-depth, public-media-style approach to the journalism that distinguishes us on the screen and in the paper.

Our hope is to form a network—like the hundreds of local NPR affiliates—with other noncommercial news Web sites around the country that are planning to start print editions. But our main goal is to build a local media infrastructure that treats readers as citizens instead of merely consumers.

In 2009, when so many had given local journalism up for dead, it was difficult to stay dedicated to an idealistic vision of the media. Yet a handful of professionals who had come to see themselves as mission-driven public servants refused to let the bean counters tell them how to do their jobs. In the process, they reinvented the newspaper business.

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Michael Stoll is the executive editor of the San Francisco Public Press, a nonprofit news website and ad-free quarterly newspaper founded in 2009.