Business of News

A Civil primer: The benefits, and pitfalls, of a new media ecosystem

August 13, 2018
Civil founder Matthew Iles. Photo by Nick Himmel.

Imagine that the media ecosystem as we know it has ceased to exist. There are still journalists and readers, but all the traditional distribution methods and revenue streams are gone. Publishers have gone bankrupt or been absorbed by giant platforms who now control all the attention and advertising. How would you design a new ecosystem from scratch? Is it even possible to build a publishing platform that is owned by its users and can make money while still supporting journalistic values?

That is what Civil founder Matthew Iles is trying to do: invent a global platform for independent journalism, powered by blockchain technology and cryptocurrency, governed by an open-source constitution—including an advisory council that will act as a kind of Supreme Court to adjudicate ethical disputes—and run as a non-profit foundation.

“I felt we were witnessing the persistent decline of journalism as a sustainable industry,” Iles says. “To me, the only way we could rectify this, since it started with a massive internet paradigm shift, was to come up with something radical and fundamental. The question was, how do we design something where mission and business model are in alignment and in service of the mission of journalism?”

ICYMI: Civil says the future of media is blockchains and cryptocurrencies

Civil hasn’t launched its cryptocurrency yet, but the platform already hosts a portfolio of newsrooms like Popula, which is run by writer Maria Bustillos, and Block Club Chicago (a reboot of the Chicago version of the former DNA Info network) as well as a New York-based project called Documented that is tracking immigration issues. There’s also the Colorado Sun, which was founded by several writers and editors who left the Denver Post, and Civil has partnered with the European Journalism Center to fund a project aimed at reader engagement.

Each newsroom has received a grant from a $1 million pool provided by Civil, chosen because they were independent and engaged in writing about topics (hyperlocal, social policy, etc.) that Civil’s founders believe are undercovered by mainstream outlets. But once the platform is up and running, Civil says any newsroom that wants to publish and be supported by its members is free to do so regardless of what they write about, provided they abide by the principles set out in the constitution.

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Civil itself is funded by a $5 million investment from ConsenSys, a group of developers working with the Ethereum blockchain. In addition, there’s a related for-profit company called Civil Media, which will sell a variety of services to platform users and publishers, as well as a Netflix-style studio to fund journalistic and media productions.

The challenge is not a small one: Civil has to create not only a new blockchain-powered platform, but also a crowdsourced constitution, a non-profit journalism foundation and a council of expert advisers, all at the same time. It’s a little like creating a virtual country, complete with citizens who vote, an economy, a court system and a government, but the structure of this country is unlike anything that has come before it. And it’s doing all of this in a media climate that is as unforgiving as it’s been in a generation.

Vivian Schiller, the former NPR and Twitter executive who recently joined Civil to run its non-profit foundation and advisory council, described the philosophy behind the project in a recent piece on Medium:

What if we had a time machine that could take us back 25 years, when news organizations were just starting to experiment with the World Wide Web? Knowing what we know now, what might we do differently? Knowing what could go wrong, how might we have thought about governance, integrity of information, identity and legitimacy? How might we have thought about business models to support quality, and safeguards to protect us from bad actors?


How it started

The idea for Civil dates to the spring of 2016, when Iles—then just 29—was a marketing executive for a startup incubator called Launch. After getting a sociology degree from Duke University, where he was the editor of the student paper, Iles worked at ESPN’s digital arm and got interested in analytics and digital strategy, and eventually set up a business with his wife selling web design and strategic marketing services to startups.

Although he worked mostly on the marketing side of the industry, Iles says he grew increasingly concerned about the future of the business, in part because the advertising revenue that had always supported journalism was being siphoned off by large platforms like Facebook, and users seemed to be losing trust in their journalistic institutions.

In looking at the journalism business, the Civil founder says he became convinced the poor health of the industry was a business model problem—not only was ad revenue being captured by Facebook and other platforms, but scrambling to gather as much revenue as possible seemed to have distorted the industry’s incentives.

Instead of trying to survive by handing over the business to the giant social networks, he dreamed of a crowd-powered platform specifically for journalism, run by and for journalists. Iles described his initial vision in a blog post as a social platform that would “champion honest reporting, inclusive perspectives and civil discourse [and] change how we stay informed, shape public opinion and take civic action as a society.”

Being open and crowdsourced and owned by its members was a crucial step, says Iles, who has always been a fan of crowdsourced services such as Wikipedia. “Who am I to set the rules?” he says. “We need it to be owned by the people, in order for people to see that we’re serious about this commitment to creating a platform for journalism, to inspire trust, so that people would flock to our platform and help us build it.”


The blockchain

After months of brainstorming, including with former New York Observer editor Tom McGeveran, the idea behind Civil started to take shape, though Iles says he still didn’t have a mechanism for making crowdsourcing part of the platform. “Decentralization was a key tenet from inception,” he says, “but I didn’t know a way to literally allow people to own and operate Civil while also relinquishing the controls ourselves.” That changed when he started consulting for ConsenSys, a group of developers working with the cryptocurrency Ethereum.

“Tokens are the first time something like this has been made possible,” Iles says. “As soon as I first encountered the technology, I knew it would be the key to everything. I thought here’s a totally new way of organizing people in service of a mission, where the value can be captured by the people instead of by some third-party corporation.”

Iles and McGeveran started talking about building the journalism platform on the blockchain. Civil announced on July 18 that it would issue its own cryptocurrency tokens (which are based on the Ethereum blockchain) on August 13, in what is sometimes called an ICO or “initial coin offering.” Later, the deadline for the issue was extended to September 18, to give potential members more time to understand what they are buying into.

Since Civil wants to encourage membership rather than just cryptocurrency speculators, would-be buyers of Civil tokens have to answer a questionnaire before they can be approved to buy any. Everyone who owns tokens will become a member of the Civil community, and will get the right to vote on the principles enshrined in the constitution and the adjudication of disputes. The offering hopes to raise a total of $24 million.

There are a number of benefits to creating a new form of money, but the one Civil is most focused on is that it has the potential to help realign the incentives that underlie the journalism business. Instead of having to cater to billionaire owners or a hedge fund, newsrooms like Popula can be supported directly by members paying with Civil tokens. Those tokens can also be used by newsrooms to pay writers (although that’s not a requirement).

The idea behind these incentives is that good and honest journalism will be rewarded, and fake or malicious journalism will be penalized. In addition to those benefits, the “distributed ledger” that is the core of a cryptocurrency is open and transparent, so that every transaction can be seen by all, and everyone who uses it has their own copy. That makes it difficult to tamper with, or at least makes it obvious when it has been.

ICYMI: The Colorado Sun pits Civil-backed startup against The Denver Post

Popula founder Bustillos, one of the first to create an independent newsroom on Civil, says this feature of the blockchain is one of the main things that attracted her to the platform—the idea that the archives of stories could be protected from deletion or tampering if they were incorporated into a distributed ledger that is shared by everyone on the blockchain.

Mike Masnick, the founder of tech commentary site Techdirt and someone who has studied blockchain technology for some time, says he is fascinated by the possibility of cryptocurrency tokens as a business model for journalism. “But no one has shown a clear path for how it works in any meaningful way for journalism,” he says. “And whenever I ask, I get jargon and buzzwords.”

Civil co-founder McGeveran is sympathetic. “That was my attitude when I first met Matthew,” he admits, “but then I started to think that blockchain is definitely coming for the journalism industry. So if you’re in media, you could decide to not build something to take advantage of all this—as some did in the 1990s when the web first came along—or you could go out there and try to build something.”


The constitution

Finding a balance between upholding the vision behind Civil while still allowing for community rule is where the constitution comes in. It is being built in real time via a Google Doc that anyone can contribute to. Co-founder Matt Coolidge says the company came up with a first draft, and asked journalism scholars and experts for advice, as well as about 50 people in the news industry who had already expressed interest in the concept.

The document, currently fewer than 3,000 words including an appendix (less than the length of this article), outlines everything from defining terms to mapping out how governance works. It’s more vision than explicit rules about what is acceptable—more Declaration of Independence than Bill of Rights. That said, the constitution does include some examples of what is and is not tolerated. For example, it says newsrooms must not knowingly publish non-factual content, should not engage in plagiarism and can’t re-publish a work without the author’s approval.

Other specifics have been the subject of debate, such as the use of anonymous sources. “Identifying sources is something that lots of US outlets are committed to, but pseudonymous writing is a big part of what happens journalistically in other countries, so we don’t want to say that identifying sources is something newsrooms have to do,” Coolidge says. “So the constitution says transparency is important but there are reasons why it might not be done, such as government harassment etc. It’s up to each newsroom to determine that.”

Reading through the comments and editing history on the Google Doc is a little like reading the transcript of a debate in a political theory course, where the topic is governance and incentives for social behavior. But there are also technical aspects, such as a discussion over whether to mention that the Civil community/marketplace is built on Ethereum. One participant asks: “Should we name a specific technology in the constitution? That means that in order to switch to a better technology later, we will need to change the constitution.”

Schiller says she sees the Civil constitution as being partly about journalism standards and practices, something that in many organizations is not spelled out for everyone to see. It also describes the process by which newsrooms on Civil remain accountable to the standards they signed up for—what are the mechanics by which they are challenged if they don’t stick to those standards, and how can they appeal? But it also tries to leave enough openings for future issues that may not even be obvious yet.

“We don’t want to have these things come up down the road and not be prepared—we don’t want to be blindsided like a certain platform [i.e. Facebook], to assume that everyone will be nice and then find out later that they aren’t,” Schiller says. “As more newsrooms come on, we can harness the power of this large community.” The first version of the constitution will be published as part of the launch of Civil’s tokens, with a second version to be published by December. After that, the constitution will be ratified by members.


Tokens and voting

Everything not laid out in the constitution is essentially open to debate, and amendments can be added if enough members vote for them. There is also a process built in to the Civil platform whereby tokenholders can challenge the existence of a specific newsroom. This isn’t designed as a way to challenge any editorial decision a newsroom could make, but to allow members to vote on whether a publication has broken Civil’s rules in such an egregious way that it should lose its right to publish on the platform altogether.

How this process works is spelled out in the Civil registry, a kind of “terms of use.” If you want to publish, you have to stake a certain number of tokens, which are deposited or held in escrow (existing newsrooms will have to do this after the token launch). If you choose to leave the platform you can get your tokens back, but while you are publishing via Civil those tokens are at risk. If someone wants to challenge your presence, they have to stake their own tokens, and then the community votes by using their own individual tokens.

If the vote goes against the newsroom, it loses its tokens and could be removed from the platform. Most of the tokens that are forfeited go to the challenger (who is effectively compensated for enforcing the platform’s rules), while some of the tokens get disbursed to everyone who voted, as a way of rewarding them for taking part in upholding the principles of the platform. One potential risk of this approach, of course, is that it could encourage witch hunts, something the presence of the Council is intended to mitigate.

Iles says that one of the problems Civil is trying to correct is that “there’s currently zero cost to distributing misinformation—it’s cheap to do, even after you distribute it and it’s been debunked, there’s zero cost to you, even reputational cost. So we thought, ‘Why not build it into the system?’”

If you want to publish on Civil and/or challenge someone else’s right to publish, you have to state who is involved and what their credentials are, and you have to stake tokens on the outcome. “So if you do publish misinformation, there’s a disincentive,” Iles says. “We want to make it increasingly expensive to be a jerk.”

This view of how Civil will work implies that current journalistic incentives are oriented towards bad behavior that needs correcting, says Masnick, but he’s not sure Civil will help, because the ones most likely to do this “are the very publications that are least likely to use something like Civil.” Masnick argues a strong editor or publisher with good values “seems more likely to be effective than having a mob of token holders who may not understand the news biz at all.”


The Council

The vision behind Civil was always that the platform would be owned not by the company, but by members who invested in tokens, says McGeveran. “But we also felt we had some rights to determine what the platform was going to become. If all of a sudden 10,000 people were to come on and decide to sell Beanie Babies, that’s not really the problem we’re trying to solve. So how do you have the decision-making rest as much as possible with the community, but still maintain some control? That’s where the council comes in.”

Civil’s council of advisers, which Schiller is in the process of assembling, will function as a kind of Supreme Court when it comes to resolving disputes, assessing penalties and upholding the principles of the platform. It will include between 15 and 20 journalists, academics and other experts; those already named to the council include Emily Bell, director of the Tow Center for Digital Journalism at Columbia University, former Wikimedia Foundation Executive Director Sue Gardner, and Rutgers law professor Ellen Goodman.

As for what kinds of disputes they might be called to rule on, Iles says if a newsroom that was abiding by the constitution’s principles was challenged just for being conservative (something that conservatives argue is currently happening on both Facebook and Twitter), “that would be a very bad outcome.” So a newsroom can appeal to the council, which would determine whether the complainant has a case or not.

Iles said he fully expects there will be battles over concepts or execution “and it will be messy. But it’s at those tension points that we’re going to see the character of Civil emerge. In theory, it will build trust because my vote was counted, even if I didn’t win, and that will give Civil its credibility and its loyalty. It will be the seat at the table many consumers are asking for when it comes to these global tech platforms.”

And what if someone acquires enough tokens to try and influence the voting? Theoretically this could happen, since under the Civil constitution, more tokens means your vote counts for more (a concern that a number of commenters have raised on the open Google Doc), and even the decisions of the Council could theoretically be overturned by a “supermajority” or two thirds of the total membership. But Iles says trying to rig votes in this way would be self-defeating.

“Economically you wouldn’t want to own 51 percent of Civil,” he says, “because at the moment you found out that I owned that much, you would throw up your hands and say this isn’t what I thought this was supposed to be, and then the overall value of the tokens would crash. So the attacker would have to spend a lot of money to acquire that many tokens because the price would go up, but then no one would want those tokens any more; it would be like buying enough matches to burn down the match factory.”

ICYMI: Former DNAinfo staffers link up with Civil for Block Club Chicago

Correction: An earlier version of this story said the first group of newsrooms on the Civil platform were given seed funding. In fact, they got a grant (meaning no return on investment is expected). The story also said Civil itself got a grant from ConsenSys, but that was actually a venture capital investment. Also, founder Matthew Iles has a degree in sociology from Duke, not a journalism degree.

Mathew Ingram is CJR’s chief digital writer. Previously, he was a senior writer with Fortune magazine. He has written about the intersection between media and technology since the earliest days of the commercial internet. His writing has been published in the Washington Post and the Financial Times as well as by Reuters and Bloomberg.