"Citizen journalism" hub NowPublic has raised $10.6 million dollars in venture capital following the $1.4 million last year in angel funding, reports VentureBeat.
NowPublic emerged onto the Web proclaiming, "The news is Now Public." Two years later they've embraced the tagline "Crowd powered media" and managed to secure significant funding in the process. According to VentureBeat NowPublic has raised $10.6 million in capital from Rho Ventures and Rho Canada with additional capital from Brightspark and Working Opportunity Fund. VentureBeat reports:
Chief executive Leonard Brody said it was the largest first round funding for any citizen journalist site. OhmyNews, a site based in Korea but which is now international, raised $11 million in a second round of financing. OhmyNews is somewhat different, however, in that it hires journalists and pays them based on advertising revenue it gets to its site.VentureBeat explains that NowPublic's business model involves licensing submitted content to news organizations such as Associated Press in a fashion similar to that of existing news agencies. Unlike OhmyNews, it appears that NowPublic's model does not provide any form of payment for its contributors.
If this is true, then NowPublic is essentially a news agency without any employees to pay. While such an arrangement obviously creates enviable profit margins, it is not liable to be sustainable and brings up significant ethical questions about their enterprise. While it was obviously impossible for NowPublic to pay its journalists during its infancy, they now have a revenue stream and they owe something to the people who made the site possible. If NowPublic sells a license for AP to use a contributor's material, then NowPublic should in turn provide that journalist with either a percentage of the money or at least a flat-fee for its commercial use.