But anybody who aspires to launch a journalism nonprofit (or even to work at one) needs to understand that the laws of economics still apply - only in reverse. In an online news model, where marginal production and distribution costs approach zero, there is almost no economic incentive to produce costly enterprise/investigative journalism. As a result, that kind of work becomes a pure public good - but one that government can't be fully trusted to provide. One answer: The nonprofit model.
This is the logic thread that runs through a recent post by venture capitalist John Thornton of Austin, who has studied both for-profit and nonprofit journalism models closely. As John neatly states the problem facing journalism in the online age: Content Wants to be Ubiquitous.
When the the unit production cost of any good approaches zero, what that good really wants to be is ubiquitous. And information–particularly news– on the web is sui generis in at least two reespects: regardless of the total production cost of a piece of content, the average unit cost has the potential to be trivial because replication is free. And unlike any other good I can think of, the marginal unit production cost is exactly equal to the marginal unit distrubution cost, and both approach zero. It’s hard to imagine that even the most arduous, long-form, Pulitzer-winning series of articles will have an per-unit cost of much above the asymptote–and here’s the perverse thing–if enough people want to read it.
As mentioned here previously, Thornton is raising money to launch a nonprofit called Texas Tribune.