Blockchain journalism startup Civil is shutting down following its failure to find substitute financing after losing its major source of funding, ConsenSys (Rick Edmonds/Poynter)
Rick Edmonds / Poynter:
Blockchain journalism startup Civil is shutting down following its failure to find substitute financing after losing its major source of funding, ConsenSys — Civil, the high-profile, blockchain-backed attempt to nurture nascent digital news sites, is shutting down.
Civil, the high-profile, blockchain-backed attempt to nurture nascent digital news sites, is shutting down.
Its website continued to post stories from 100+ member organizations as recently as this week, but founder and CEO Matthew Iles told me Tuesday he had concluded the venture was not sustainable. It’s “the end of Civil,” he said.
Iles and his seven-person tech team will be folded into Civil’s main investor, blockchain studio ConsenSys, to develop new product strategies.
When I asked if there was a legacy, Iles paused for some time, then said, “I haven’t really thought about that. Civil will always hold a special place in my heart. It was a grand experiment — a moonshot — and we knew the odds were long.”
He said that he still believes that a self-governing, decentralized incubator for journalism startups has merit but would not predict how and whether the concept could be revived.
The unraveling of Civil has been in progress for at least six months.
Direct financial support of the member organizations stopped earlier this year. Ambitions to tie into established news businesses like the Associated Press stalled.
Vivian Schiller, a well-traveled and well-respected digital news executive who had been president of the related Civil Foundation, left to head media and technology programs at the Aspen Institute at the start of this year. Other journalists working for Civil or associated as advisors followed her out the door.
Civil was launched in 2017 at the height of enthusiasm for blockchain virtual currency. The venture had complex interlocking units and an opaque self-governing structure meant to ensure news focus and editorial integrity.
In the end, “it was overcomplicated and hard to explain,” Schiller told me in a phone interview. “It was a flyer — an extremely ambitious idea, and I was proud to be part of it. … Whether it was ahead of its time or just never viable is hard to say.”
For all its complexity, Civil’s fall was straightforward. It had been almost entirely funded by ConsenSys, a large for-profit blockchain company, and its CEO, serial entrepreneur Joe Lubin.
The initial blockchain bubble burst just as Civil was cranking up and has yet to come back. ConsenSys is having its own challenges with several rounds of layoffs — 14% of staff in both February and April after an earlier round in late 2018. So the main spigot of revenue was shut off, and Civil failed to achieve substitute funding to “sustain ourselves independently,” in Iles’ words.
“We developed compelling technology,” Iles said, “but in the end, tried to do something that was not ready for prime time.”
My perspective (echoed by Schiller) is that honorable tries that do not make it are simply part of the important movement to invent alternatives to faltering commercial news outlets. Successes have been numerous — ProPublica, Texas Tribune, Report for America and many more.
And Civil did some good — its “first flight” of 14 member organizations received $1 million in no-strings-attached grants.
“I’m very grateful for everything they have done for us,” Larry Ryckman, co-founder and editor of the Colorado Sun, told me. “We could not have gotten on our feet without them. And it wasn’t just the money … they gave us technical support and expertise we lacked.”
The wide-ranging international group that joined after the first round did not get startup cash, only blockchain “tokens” that never gained more than nominal value. However, “it didn’t cost them anything” either, Schiller said. In effect, Civil “was an affiliation with a global network of trustworthy organizations … that didn’t achieve liftoff.”
Allegra Hobbs chronicled the disappointment of member sites and the blockchain crash three weeks ago in a comprehensive piece for Study Hall, a weekly media newsletter for media workers.
For the Colorado Sun, launched by Denver Post alumni as MediaNews Group had cut a third of its staff there, Civil’s collapse together with the current recession have required a complete redo of strategic plans. “But we’re going to make it,” Ryckman said.
In the early days of Civil’s launch, top news organizations were open to a relationship.
“We had been trying to scope out a project with Civil related to registering and tracking photos,” Jim Kennedy, chief of strategy for the Associated Press, wrote in an email. “But that project has been sidelined for now, here. Not sure the prospects for revisiting … I have not had direct contact with them for some time.”
“I’ve frankly always been a little confused about the different parts of the org,” Kinsey Wilson, founder and head of the Newspack project at the company that owns WordPress (and until recently a Poynter trustee), emailed me. “Last I spoke to Matthew they were pivoting to provide technology to authenticate, distribute and monetize news content.” But there has been no further communication.
The Civil Foundation lined up nine A-list digital news veterans as a Civil Council. They were to assist in decisions to admit, reject or expel member organizations as explained on the site:
The Civil Council is the governing authority within the Civil protocol, whereby token-holders can appeal a decision for review. The Civil Council has the ability to overturn community decisions, but the community in turn has the power to veto the Council through a supermajority vote.
Some sites were indeed rejected for being too commercial or advocacy groups in disguise.
I am not here to gloat as a skeptic proved right. I do think the state of the art in supporting necessary journalism in a time of great need has advanced quickly during Civil’s three-year lifespan.
Direct support of journalists, if they can define in an application a specific project with a payoff, has been working well. Report for America, ProPublica’s Local News Project and initiatives of the charitable arms of platform companies are gravitating to that approach. A much more elaborate structure is probably more hindrance than help.
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