At the age of 75 in Oct.12, 2003 Joan Beverly Kroc dies. As the third wife of McDonald’s CEO Ray Kroc, she inherited his fortune after his death in 1984. During her life Mrs. Kroc gave away more than $1 billion toward causes ranging from animal welfare, children, homelessness, nuclear disarmament, and the arts.
Upon her death, $225 million of her fortune went to National Public Radio, the nation’s leading regional public radio network, including $5 million to her local public radio station, San Diego’s KPBS. Mrs. Kroc believed in the power of the public radio „to serve the communities of America“. Ms. Kroc and her donation are just an example of the different ways media make money in the United States. Models in which people donate and subscribe for the media products they enjoy and would like to support.
This concept of supporting a news organization because you like its content or believe in it, is somewhat foreign to me. In Bulgaria, people rarely make donations to media organizations or pay for online content, so it was very interesting to hear about this idea. In Bulgaria state owned media gets money from the state budget – and that’s it. Private newspapers usually do not charge for online content. My newspaper is one of the few exceptions. Here is different.
According the most recent financial report of Minnesota Public Radio, public support generates 63 percent of the revenue. About 37 percent of it comes from individual donors which are around 200, 000. About 70 percent of the donations for Twin Cities Public Television (TPT) also come from individual donors. Stanley Hubbard, chairman and CEO of Hubbard Broadcasting corporation, is one of the biggest donors for TPT.
The model of charity has its problems. Most of the donors of Twin Cities Public Television are 65-plus+ years old. The chalenge is how to compel young people to support their favorite media outlets and programs in an environment in which you get so much information from so many different platforms. Television is searching for the ways to gain viewership, especialy among younger viewers.
The state also makes donations for public radio and TV stations. In 2008 voters passed the Clean Water, Land and Legacy Amendment (Legacy Amendment) to the Minnesota Constitution. The Legacy Amendment increased sales tax by 0.0375 percent beginning July 1, 2009 and continuing until 2034. The additional sales tax revenue was distributed into four funds: 33 percent to the Clean Water Fund; 33 percent to the Outdoor Heritage Fund; 14.25 percent to the Parks and Trails Fund and 19.75 percent to the Arts and Cultural Heritage Fund. Based on current sales tax revenue, Minnesotans will invest more than $1.2 billion in the Arts and Cultural Heritage Fund projects and programs over the 25 year life of the tax. For example from July 1, 2015 to June 30, 2016 – MPR received nearly $1,6 million, according to MPR’s fiscal year report.
The private media business in the United States also get support from online readers through subscriptions to gain access to content. This paywall policy is one that a lot of newspapers all over the world, including in Bulgaria, do not dare to take on for fear of losing readers.
After the last change of ownership, the Star Tribune, Minnesonata’s largest newspaper, the news organization changed its business strategy. The local media outlet now follows the business model of newspapers like The New York Times, which launched its metered paywall in 2011, and The Wall Street Journal, which always has focused on persuading readers to pay for digital content. The Star Tribune’s strategy is based on the „day visit“ in which a reader has unlimited access to articles on the webpage the first and second days. But has to pay on the third day. The paywall model is working for the Star Tribune – it has 50,000 online subscribers. The digital era and metered paywall have created a new income stream for the media organization, with 30-40 percent of revenue now coming from subscriptions, and 60-70 percent coming from advertising.