Maintaining Journalistic Integrity Through Mutualization

For 30 years, the internet has stripped middlemen out of the news business. Classified ads fled to Craigslist, readers fled to search engines and social media, and writers fled to Substack and like platforms. The history of journalism reveals the next step and how to avoid potential pitfalls.

As in finance, the disintermediation of journalism has mostly been good for customers, journalists, and the pursuit of Truth. Readers get more solid news, and writers do not have to submit to corporate pressures to say X (yay for vaccines!), or not say Y (yay for Ivermectin!).

Disintermediation has a cost, though, and the one- and two-person nano-journalism shops pay it every month. A writer who persuades 2,000 readers to pay $50 a year grosses $100,000. Platform and card fees take about $13,000 off the top. What remains must cover self-employment taxes, health insurance, libel insurance, a lawyer, and a copy editor, all bought at retail.

Readers face the mirror image. I would gladly pay $100 a year to read 50 independent writers. I will not pay $50 to any one of them, though, because each writes something I care about only once or twice a year. Multiply me by millions and you see the money nano-journalism leaves on the table.

The old newspaper solved both problems by bundling: one subscription, many writers, shared overhead. The price was the corporation, which owned the masthead, the archive, and in the end, the journalists.

The obvious fix is to rebundle. The danger is that rebundling becomes reintermediation. A platform, a venture-backed aggregator, or a legacy chain assembles the bundle, sets the split, and decides who gets in. Scroll, a promising bundling startup, sold itself to Twitter in 2021 and vanished within months. Trade one top-down corporation for another and journalists end up right back where they started.

History offers a better model. In 1934, four radio stations, WOR in New York, WGN in Chicago, WLW in Cincinnati, and WXYZ in Detroit, formed the Mutual Broadcasting System. NBC and CBS fed programs down to their affiliates. Mutual Broadcasting System turned that upside down. The stations owned the network, swapped the programs they produced, and split the cost of AT&T’s long lines. Each kept its own call letters, its own local shows, and its own audience. By 1945, Mutual boasted 384 affiliates.

Substitute writers for stations and you have the design. Each journalist keeps her own newsletter, byline, and readers. The mutual sells a bundle to readers like me, sells ads across its members’ lists, hires shared copyeditors, and buys liability insurance and legal defense in bulk. The writers own it and can set governance as they wish, be it one-member, one-vote, rights proportional to the revenue they bring in, or something else entirely.

Something like it already exists. Flaming Hydra, a cooperative of more than 75 writers, splits its subscription revenue equally. Even Substack’s founders have said that “writer self federation” could make bundling work.

Mutual’s history also shows how such federations fail. Three lessons follow.

First, stars leave. WXYZ, home of The Lone Ranger, defected to NBC in 1935. Only a contract kept the masked man on Mutual until 1942. A writers’ mutual should expect its best members to leave and should build for the solid middle, where most nano-journalists reside.

Second, the split decides everything. Equal shares reward the laggard, and payment by page views rewards clickbait. Let readers divide their dues among the writers they actually read, and the bundle keeps the direct tie between writer and reader that made independence worth having.

Third, control drifts. Mutual’s capital stock consisted of just 10 shares, 5 held by WGN and 5 by WOR’s parent, so two members ran the firm. By 1952, control had passed to General Tire, and before the decade was out, its president was indicted for fraud amid charges that executives took Dominican money to air propaganda as news. America’s big mutual life insurers taught the same lesson around 2000, when MetLife, Prudential, and others demutualized. A writers’ mutual should bar outside equity in its charter and make conversion costly.

None of this requires a subsidy, a mandate, or a new master. It requires writers willing to do what Americans have long done: form a voluntary association, own it together, and write rules that keep it theirs. Mutual radio lost its independence in the 20th century, but 21st-century mutual journalism need not.