Y Combinator-Backed Beacon Offers A New Approach To Crowdfunding Journalism

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Beacon, part of the current batch of startups incubated by Y Combinator, gives readers another way to support (and get access to) high-quality journalism.

Two of the company’s co-founders, Dmitri Cherniak and Adrian Sanders, told me that they previously worked together on a photo storytelling app for the iPhone, where they wanted to pay the photographers and give them an incentive to post more content.

Given the relatively small size of the audience, Sanders said, “The digital ad model did not make any sense,” but the pair still wondered, “Man, wouldn’t it be great if these mobile photographers could earn real money with this niche community?” Then they encountered Dan Fletcher, formerly managing editor at Facebook and social media director at Bloomberg, who would become the third founder at Beacon. As they discussed the state of the journalism industry, they realized that they could solve a broader problem.

Beacon’s approach is basically a form of crowdfunding. Journalism has previously been supported on general crowdfunding sites like Kickstarter and through more focused efforts like Spot.us, but I haven’t seen a model quite like this one. Sanders argued that on its own, crowdfunding can accomplish a lot, but “it doesn’t necessarily deliver a great experience for a community of readers.”

On Beacon, readers browse through different authors and their projects, and if they find one that they like, they can buy a subscription. There are different subscription levels but the basic price is $5 per month. The subscription actually gives them access to the full array of Beacon content, but the specific project that they support will get the “vast majority” of their payment, Sanders said.

Meanwhile, around 25 or 30 percent of the subscription revenue is put into a bonus pool, which is eventually paid out to the writers as well — not based on pageviews or social sharing, but on how many readers hit the “recommend” button after they finished an article, showing that they actually thought it was worth their time.

There are more than 70 journalists located in 30 countries on Beacon right now, with projects such as this effort to release government documents around U.S. counterterrorism, and this project covering the threats facing North American deserts. There are even journalists grouping together to create micro-publications, such as Climate Confidential.

The site is currently strongest on overseas and public-interest journalism, since that’s an area that requires a significant investment (and one where many publications are pulling back). But Sanders said he doesn’t want to limit Beacon to any particular type of project. Instead, the goal is to experiment and find what readers are willing to pay for. In fact, Beacon could support other forms of content entirely, like photography or cartooning, as it does with this look at New Yorkers.

“In the future, there has to be some way for people with large followings on the Internet to really group together and … be supported,” Cherniak added, arguing that it’s “crazy” that the main way to do that right now is to “put ads up on something.”