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To cite this article: Nicole Ladson & Angela M. Lee (2017) Persuading to Pay: Exploring the What
and Why in Crowdfunded Journalism, International Journal on Media Management, 19:2, 144-163,
DOI: 10.1080/14241277.2017.1298110
ABSTRACT
Incorporating theoretical concepts from communication, media
economics, and social psychology, and using data from two
constructed weeks, this content analysis study examined factors
contributing to funding successes on Byline, an international
crowdfunded journalism platform. This study found that non-
public affairs news is more likely to reach funding goals, have
more supporters, and receive more money per supporter than
public affairs news; author location makes a difference in how
many supporters and how much donation a news column
receives; and offering more reward options is associated with
a significantly higher odds of a column reaching funding goals
and having more supporters. Overall, this study offers empirical
evidence of how news organizations may learn from Bylines
successful crowdfunding strategy, as well as theoretical linkages
between uses and gratifications and Cialdinis rule of reciprocity
in understanding what and why people are persuaded to pay
for news.
Introduction
Crowdfunding is gaining in interest and potential as a revenue source for
many fields, including journalism. This study examines factors predicting
successful crowdfunding strategies on Byline, an international crowdfunded
journalism platform, and offers theory- and evidence-based managerial sug-
gestions for news organizations worldwide looking to adopt alternative
funding strategies.
Led in the United States by a rapid decline in print advertising that
accelerated with the 2008 economic recession (Barthel, 2016), the financial
stability of newspapers has deteriorated rapidly, especially at newspapers in
larger cities (Downie & Schudson, 2009). Even if the newspaper crisis might
be exaggerated (Chyi, Lewis, & Zheng, 2012), this decline has led to layoffs,
less news coverage and other cost-cutting measures. This downturn has
sparked conversations about if newspapers will survive (Kaiser, 2014), and
if they will, for how long (Public Affairs Staff, 2014). For newspapers
CONTACT Dr. Angela M. Lee amlee229@gmail.com University of Texas at Dallas, School of Arts,
Technology, and Emerging Communication, 800 West Campbell Road, Richardson, TX 75080, USA.
2017 Institute for Media and Communications Management
INTERNATIONAL JOURNAL ON MEDIA MANAGEMENT 145
expected to last, there is concern about how they will be financed (Chyi,
2012), especially as some millennials believe that news is a right, not some-
thing they should have to pay for (Lichterman, 2015).
This worldwide decline in newspaper advertising revenue (Kilman, 2015)
means new and different business models must be developed for the industry. A
sustainable business model is important for how people produce, consume, and
communicate news because professional content comes with a price tagjournal-
ists need skills, training, and resources to gather the information, verify facts, reach
sources, etc.to produce quality pieces gathered in an ethical fashion and with
independence from corrupting influences (Lewis, 2012, p. 844).
Could crowdfunded journalism be part of this new and different business
model? This study sets out to analyze factors contributing to success on the
Byline platform to determine if there are larger patterns of what might make
crowdfunded journalism financially viable and generalizable to other news
organizations seeking new funding strategies.
This study differs from other crowdfunded journalism studies in two ways:
First, whereas most studies in crowdfunded journalism primarily examine
the topic from a theoretical perspective (Hunter, 2015, 2016) and often list
journalism in a list of creative works that could be crowdfunded (e.g.,
Agrawal, Catalini, & Goldfarb, 2014; Bannerman, 2013; Belleflamme,
Lambert, & Schwienbacher, 2014; Mollick, 2014; Mortiz & Block, 2016);
this study is one of the few that integrates theory with empirical research.
The goal is to test the extent to which existing theories from communication,
media economics, and social psychology inform our understanding of crowd-
funding journalisms economic viability.
Second, Byline is different from other crowdfunding efforts in that (1) it
publishes entire stories rather than pitches, such as on Spot.Usone of the most
studied crowdfunded journalism platforms that uses only pitches (Aitamurto,
2011; Jian & Usher, 2014); and (2) Byline is financially sustainable (cf. Spot.Us;
Coddington, 2012; Easton, 2015). From a media management perspective,
Bylines observed economic success may help advance our understanding of
how other crowdfunded news sites may achieve financial sustainability despite
economic woes in traditional news media.
Paying intent
It is difficult charging for online content, let alone online news content (Chyi, 2013;
Chyi & Lee, 2013). In the face of mainstream news medias widespread economic
hardship, Bylines relative economic success is noteworthy.
The U&G has traditionally been used to understand how and why audiences
use media across different platforms (e.g., Katz, 1959; Lee, 2013; Ruggiero, 2000),
and it operates under the following central tenets: (1) media users actively and
purposefully choose media for consumption; (2) their goal-oriented choices in
media are driven by the desire to satisfy different needs; and (3) they are more
likely to repeatedly use media that satisfy their needs (David, 2009; Rubin, 2009;
Ruggiero, 2000). In the context of media economics, studies find that users are
more likely to pay for what they use and find interesting (Chyi, 2013; Chyi & Lee,
2013; Kammer et al., 2015).
A number of journalism studies have documented the disparity between what
journalists and news audiences find noteworthy (Boczkowski & Peer, 2011; Lee
& Chyi, 2014b; Jian & Usher, 2014). Specifically, Boczkowski, Mitchelstein, and
INTERNATIONAL JOURNAL ON MEDIA MANAGEMENT 149
Walter (2011) found that news audiences across the globe prefer non-public
affairs news, such as entertainment, sports, crime, and weather, whereas journal-
ists prefer public affairs news, such as politics and business. Integrating the
previously mentioned findings, this study hypothesizes that news audiences are
more likely to fund non-public affairs stories on Byline:
Research Question 2: Does author location influence (a) the number of sup-
porters and (b) average amount of donation per suppor-
ter a column receives?
receive (Cialdini, 2001). This could take the form of a donation request
enclosed with a small gift that doubles the response rate to 35% compared
to not giving the donors anything at all. The gift could be as small as
personalized mailing labels. What makes this principle powerful and
exploitable are the obligation to receive and a sense of future obligation
to return a favor (Cialdini, 2009; Fehr & Gchter, 2000), even when the
influence agent is a business (Guadagno, in press). In the context of Byline,
reciprocity can be seen in journalists setting specific rewards of what a
contributor will receive if they donate a certain amount. In other words,
through rewards, audiences are promised something in return for their
financial investment.
Cialdini et al. (1975) found in a series of experiments that if a requester
moved from large initial request to a smaller request, it increased com-
pliance in the subsequent request. If a publisher on the Byline platform
were to include multiple reward options for a possible donor ranging
from, for example, a thank you e-mail to dinner with the journalist in
exchange for varying amounts of donations, could an audience member
view the stratification (e.g., having a variety of reward options) as a
concession and, hence, be more likely to fund a news story? It should be
noted that while different types of models in crowdfunded journalism have
been studied (Aitamurto, 2015; Bradford, 2012), the reward modeloffer-
ing something to investor in return for their contribution (Bradford, 2012)
has not been studied in the context of Cialdinis concept of reciprocity.
In fact, much of the few studies of crowdfunded journalism often define
reciprocity in a direct sense, such as in terms of hyperlinkinglinking and
sharing information from other usersin hopes to build greater numbers
of followers (Borck, Frank, & Robledo, 2006; Lewis, 2015; Lewis, Holton, &
Coddington, 2014).
Building on Cialdinis concept of reciprocal concession, it is hypothesized
that stories that offer more rewardswhich are akin to gifts (Lewis, 2015)
may receive more donations because they give potential donors more choices
in what they will receive in exchange for their donations. As such, the
following hypothesis is proposed:
Hypothesis 2: Stories on the Byline platform that offer more reward options
are more likely to reach funding targets.
Research Question 3: Do stories that offer more reward options (a) have
more supporters and (b) receive more average dona-
tion per supporter?
INTERNATIONAL JOURNAL ON MEDIA MANAGEMENT 151
A number of rewards exist on Byline, and they are typically the direct
result of author preferences. For example, some authors choose to offer
rewards such as early access to stories and a thank you e-mail, whereas
other authors may offer rewards such as bonus content, direct Q&A with
the author, a signed copy of a book by the author, or even dinner with the
author.
In their crowdfunded journalism study, Burtch, Ghose, and Wattal (2013)
found that longer funding durations are associated with higher performance.
Building on Burtch et al.s study, this study hypothesizes that the same will be
true on Byline. The following hypothesis is proposed:
Hypothesis 3: Stories on the Byline platform that have been published longer
are more likely to reach funding goals.
Method
This study uses two constructed weeks from a 6-month period to content
analyze funding patterns on Byline, an international crowdfunded news site.
Unit of analysis
Byline publishes columns, or stories, on a variety of topics that one would
read in a traditional print or online newspaper, such as hard news analysis,
feature stories, political commentary, cartoons, sports, investigations, and
crime. The columns are often produced by professional journalists. For the
purpose of this study, the unit of analysis was a column published on the
Byline platform, which can be accessed on its archive (www.byline.com/
archives).
Sampling
This study uses two constructed weeks from a 6-month period, January 1,
2016 to June 30, 2016, to content analyze columns published on Byline.
Constructed week sampling involves randomly sampling a specific time
152 N. LADSON AND A. M. LEE
period until each day of the week has been sampled. This method accounts
for variances in the newshole cycle by day of the week, and has been shown
to give as good an estimate, if not better, than simple random and
consecutive day sampling (Riffe, Aust, & Lacy, 1993). Riffe et al. (1993)
also found that two constructed weeks would allow reliable estimates of
a years worth of a newspaper entire issues. Further, Hester and Dougall
(2007) found that for online news content analysis, two constructed weeks
can provide reliable estimates of content in a population. Lim (2006) used
this method to analyze online content of newspapers based overseas.
All columns (N = 35) published during the previously mentioned two
constructed weeks are analyzed in this study.
Dependent variables
The dependent measure was the reaching funding goal. If a column reached 75%
or more of the funding goal, then it was coded as 1; if a column did not receive any
funding or reached funding below 75% of the proposed goal, then it was coded
as 0.
The number of supporters for a column gives the number of people who
donated money. The numeric value of the number of supporters/donors was
coded. So if there were 235 donors, this variable was coded as 235.
The average amount of donation per supporter was the numeric value of the
total amount of money raised divided by the number of supporters (or donors).
The number was rounded to two decimal places. If no money was donated, it was
coded as 0. Since some funding requests were in dollars while others in pounds, for
comparison purposes, the average amount was converted to United Kingdom
pounds.1
Independent variables
Publication time was coded by how many months a column has been
available. Since this study includes data over the span of six months
(JanuaryJune 2016), this variable ranged between 0 and 5. Zero represents
a column published five months ago (e.g., published in January 2016), 1
represents a column published four months ago, 2 represents a column
published three months ago, 4 presents a column published two months
ago, and 5 represents a column published within the last month.
Column topics were coded based on the primary topics. Journalism follows the
inverted pyramid style, where the most important information appears first, at the
top of the story (Scanlan, 2003). The topics were coded according to news type and
by location. Political commentary of happenings in the United States was coded as
0; politics or political commentary of happenings in Europe was coded as 1;
political commentary of happenings in the Middle East was coded as 2; murder
INTERNATIONAL JOURNAL ON MEDIA MANAGEMENT 153
inquest or trial was coded as 3; trial of a religious group was coded as 4; media
corruption or scandal was coded as 5; environment was coded as 6; scandal
involving public group in Europe was coded as 7; scandal involving public groups
in the Middle East was code as 8; scandal involving public groups in Asia was
coded as 9; and scandal involving public groups in Africa was coded as 10. To
answer Hypothesis 1 and Research Queston 1, we adopted the non-public affairs
and public affairs definitions used in Boczkowski et al. (2011). Therefore, codes 3,
4, and 6 are non-public affairs news, and codes 02, 5, and 710 are public affairs
news.
For author location, the United Kingdom was coded as 0; the United States of
America was coded as 1; Belgium was coded as 2; Greece was coded as 3; Jordan
was coded as 4; Israel was coded as 5; Singapore was coded as 6; and Jerusalem was
coded as 7.
The number of rewards was coded as the number of funding options given per
column. This was coded by the numeric value of reward options listed. If a column
did not list any rewards it was coded as 0; if a column gave 1 reward then it was
coded as 1, and so on and so forth.
Pretests
A graduate student at a public research university in the United States and an
undergraduate student enrolled in a German university were trained as coders.
Both are native English speakers and experienced Internet users. Both coders
expressed confidence in understanding the codebook before performing the
pretest.
First pretest
Fifteen percent of the data were randomly used in the first pretest. During the first
pretest, all except for two variables (publication time and specific amounts of
donation) reached conventional reliability standard of least 80% agreement2
(Poindexter & McCombs, 2000) or Krippendorff alpha value of 0.75, the latter
being a more conservative reliability test that adjusts for chance findings
(Krippendorff, 2004). Upon review, it was found that the coding disparities were
primarily due to human error and unspecific instructions. For example, it was
discovered during oral discussion that when it comes to donation amounts, one
coder coded 0 if one column did not have a specific dollar amount given, while the
other coder left that column blank. The codebook was revised to include instruc-
tions to code 0 if a specific dollar amount was not given for a column.
Second Pretest
Incorporating insights from the first pretest, the codebook was refined and
another 15% of the data were randomly used in the second round of pretest.
After the second pretest, all variables reached Krippendorffs alpha of 1.0.
154 N. LADSON AND A. M. LEE
Statistical analysis
To offer an overview of Byline columns, descriptive analyses were performed for
all the variables. Moreover, depending on the nature of the hypothesis and
dependent variables, different statistical tests were performed. Specifically, inde-
pendent sample t-tests were used for Hypothesis 1 and Research Question 1;
cross-tabulation analysis was used for Research Question 2; logistic regression
analyses were used for Hypotheses 2 and 3; and ordinary least square regression
analyses were used for Research Questions 3 and 4.
Results
Using data from two constructed weeks, this study examined factors con-
tributing to financial successes on Byline, an international crowdfunded
journalism platform.
The data revealed that a minority of columns (17%) on Byline reached
funding goal of 75% or higher. Over half (51%) of the columns were
published less than one month ago, followed by less than one-third (29%)
published four months ago, 11% three months ago, and 9% two months ago.
Political commentary in Europe (20%) and murder inquest or trial (20%)
dominated most of the columns on Byline, followed by political commentary
in the Middle East (14%) and political commentary in the United States
(11%). Contrarily, trials of religious groups (3%) and scandal involving
public groups in Asia (3%) and Africa (3%) were least reported on Byline.
In short, most columns published on Byline were public affairs news (71%).
Most of the authors on Byline are from the United Kingdom (60%), followed
by those in the United States (17%) and Jordan (9%).
About half of the columns had two or fewer supporters, and the other half
between 6 and 236 supporters (M = 23.66, SD = 55.45). Specifically, nearly
one-third (31%) of the columns only had one financial supporter, followed
by 14% of the columns with five supporters, and 11% of the columns with 16
supporters. On average, each column received about 20 pounds per suppor-
ter (M = 19.52, SD = 14.77). Thirty-seven pounds were the most frequent
sum per supporter (17%), followed by 16 pounds (14%), and about 10
pounds (11%). On average, Byline columns offer about four reward options
(M = 3.66, SD = 1.75), with an offering of five reward options being the most
popular (34%), followed by four rewards (20%) and two rewards (17%).
Hypothesis 1 hypothesized that non-public affairs news columns are more
likely to reach funding goals than public affairs news, and it is supported by
the data, t(33) = 3.80, p < 0.001. Expanding on Hypothesis 1, Research
Question 1 asks whether non-public affairs news columns (a) have more
supporters and (b) receive more donations per supporter than public affairs
news. Comparing non-public affairs and public affairs news, non-public
affairs news (M = 59.70, SD = 94.62) has significantly more supporters
INTERNATIONAL JOURNAL ON MEDIA MANAGEMENT 155
than public affairs news (M = 9.24, SD = 15.52), t(33) = 2.63, p < 0.05. Also,
non-public affairs news (M = 27.57, SD = 16.96) receives, on average,
significantly more money per supporter than public affairs news
(M = 16.29, SD = 12.78), t(33) = 2.15, p < 0.05.
Research Question 2 asks whether author location influence (a) the num-
ber of supporters and (b) average amount of donation per supporter a
column receives. A Chi-square test revealed that the relationship between
author location and number of supporters is statistically significant, X2(72,
N = 35) = 119.55, p < 0.001, and the same is true between author location and
average amount of donation per supporter a column received, X2(84,
N = 35) = 140.00, p < 0.001.
Hypothesis 2 hypothesized columns that offer more reward options are
more likely to reach funding goals, and it is supported by the data.
Specifically, one unit increase in reward options is associated with a 232%
higher odds of a column reaching funding goals (odds ratio = 3.32, p < 0.05,
Negelkerke R2 = 0.38).
The next research question asked whether stories that offer more reward
options have more supporters (Research Question 3a) and receive more
average donation per supporter (Research Question 3b). A positive associa-
tion is found between numbers of rewards and supporters (beta = 0.56,
p < 0.001, R2 = 0.31), though number of rewards is not statistically associated
with average donation per supporter. In short, the more reward options a
story offers, the more likely people would decide to fund the story, although
it does not affect the average amount of money each supporter gives per
column.
Hypothesis 3 hypothesized that columns that have been published longer
on Byline are more likely to reach funding goals, but it is not supported by
the data. Publication time also predicts neither number of supporters
(Research Question 4a) nor average donation per supporter (Research
Question 4b).
Discussion
Integrating theoretical frameworks from communication, media economics,
and social psychology, the purpose of this study is to examine factors that
contribute to financial success in crowdfunded journalism. Through a case
study of Byline, this study found that content type, author location, and
rewards options are significant predictors of funding success, offering a
partial roadmap for financial success through crowdfunding in journalism.
In particular, the fact that a simple increase in reward options accounts for
nearly 40% of the variance in how likely people will fund a news column is
notable. Theoretically, findings from this study suggest that the U&G, media
156 N. LADSON AND A. M. LEE
Limitations
While findings from this study offer suggestions for how crowdfunded news
organizations may increase the likelihood that their stories get funded, this
study is not without limitations. For example, crowdfunding may not apply
to all news organizations seeking alternative business models. Also, news
organizations that seek to experiment with crowdfunding should be cogni-
zant of the fact that, as a case study of Byline, findings from this study are
limited in their external validity. For example, while the U&G and reciprocity
are helpful in understanding donation on Byline, its possible that patrons on
other crowdfunding news sites are different. Future studies are encouraged to
compare and contrast demographic and socioeconomic differences among
Byline patrons and that of other crowdfunded news sites. Moreover, future
studies are encouraged to examine whether funding patterns found in this
study apply to news sites that use other crowdfunded strategies (e.g., micro-
payment), such as The Netherland-based Blendle and Canadian-based
Winnipeg Free Press, which have implemented systems that allow consumers
to pay to view one story at a time.
Consistent with how Byline functions (i.e., Byline seeks story-based dona-
tions), this study analyzed individual stories. As such, findings from this
study may not be generalized to crowdfunded news sites that seek other types
of donations (e.g., multi-part investigative stories by a team of investigators).
Future studies are encouraged to examine whether serial stories by the same
or different authors make a difference.
158 N. LADSON AND A. M. LEE
Another factor that could limit this studys generalizability is the small
sample size (N = 35). While research suggests this studys sampling method
(two constructed weeks) allows its findings to be generalized to about 1 year
worth of newspaper issues (Hester & Dougall, 2007; Riffe et al., 1993), a news
organization would benefit by sampling from a longer period of time to plan
an effective strategy.
This study draws on the U&G and media economics to theorize about
donation patterns on Byline, but as a content analysis study, it is unable to
directly examine motivations behind why the patrons donated money. Future
studies are encouraged to conduct surveys with Byline patrons to better
understand social-psychological factors for news donations. Similarly, since
we did not survey patrons, we do not know how generalizable the results are
based on country of the donor.
Conclusion
This is the first content analysis study, to our knowledge, that integrates
theories from communication, media economics, and social psychology and
uses a robust sampling technique to examine factors contributing to financial
success in crowdfunding journalism. In terms of practical contribution, this
studys examining actual funding behavior (rather than paying intent) offers
the news industry more concrete examples of how and what they may gain
by adopting Bylines crowdfunding strategies.
From the consumers perspective, in the age of information surplus
(Chyi, 2009), news organizations have to compete with other media out-
lets for audience attention, and they have to find novel ways to persuade
consumers to pay for their content. Contrasting most news organizations
persistent financial hardship, Bylines economic sustainability is notable.
This study found that 37.25 pounds (50 USD1 and 45 euros3) was the
most frequent sum given per supporter on Byline, with the average
amount per donation being 19.50 pounds (26.17 USD1 and 23.553
Euros; SD = 14.77).
From a news producers perspective, competition can come in the form of
content productionwith content often quoting other sources instead of
producing new content, or from stories produced to get clicks that are
based on content that is not true. All columns examined in this study are
published only on the Byline platform (i.e., original content, from named
authors and journalists with facts that could presumably be verified). This is
one notable difference between Byline and mainstream news outlets in that
the latter not only publishes original content but also re-version news stories
from outside organizations.
Without baseline information on how much an average story on Byline
costs, this study is unable to conclude whether 37 pounds, the number our
INTERNATIONAL JOURNAL ON MEDIA MANAGEMENT 159
research found to be the most frequent amount given, translates into mar-
ginal revenue on Byline. However, a U.K.-based online-only publication
estimated that a news article costs 37 pounds on average to produce
(Thompson, 2010). More research is needed on this topic, but if taken at
face value, should Byline operate under a similar cost structure, it is reason-
able to deduce that Bylines funding strategy is economically sustainable
because a majority (66%) of its stories sampled in this study have two or
more supporters, which translates into an average donation of 39 pounds per
story. It should be noted, however, that while Thompsons estimate applies
specifically to features, news story or blog posts (2010, para 2), his esti-
mates may not apply to other kinds of news content (e.g., long-form journal-
ism). For example, the cost for observing and reporting on ongoing trials is
likely significantly higher.
The fact that 97% of the stories in this study received funding suggests that
people are willing to pay for news stories that they believe to be noteworthy
on crowdfunded platforms.4 News organizations are encouraged to rethink
their business strategiesperhaps getting the largest online audience, as is
typically the aim for most news organizations, is not the solution. Instead,
perhaps news producers could find hope from crowdfunded platforms such
as Byline as they continue exploring supplemental, ways to achieve economic
sustainability.
On a whole, the news industry continues struggling with an inability to
make people consume and pay for serious news, which remains a problem
that concerns not only news practitioners but also scholars. For academics
that seek to help preserve the news industry, perhaps one of the solutions lies
in experimentation with cross-disciplinary theoretical integration. For exam-
ple, while the U&G from communication alone does not help us understand
how to increase peoples consumption of newseven though it may tell us
why they would consume a piece of contenta study integrating the U&G
and the Reasoned Action Model from Social Psychology (Lee & Chyi, 2014a)
finds that activation of ones beliefs about the news leads to more desire to
consume news, more favorable attitudes toward the news, and more con-
sumption of news on politics, public affairs, and current events. Future
studies are encouraged to test whether Lee and Chyis Motivational
Consumption Model helps increase peoples intention to pay for quality
news, and to explore further cross-disciplinary theoretical integration in the
attempt to discover new ways to persuade news consumers to pay.
Notes
1. The exchange rate of 0.7450 United Kingdompound sterling to 1 dollar was used,
based on rate reported online by the Bureau of the Fiscal Service of the U.S.
Department of Treasury.
160 N. LADSON AND A. M. LEE
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