The Business of News

As the first major UK daily newspaper makes the decision to go digital-only, it seems the rest of the news publishing industry continues to grapple with the economics of news-making. I’m note prone to hyperbole, but when many directly involved in an industry talk about “survival” it does make one look twice at the changing dynamics.

We’ve seen this challenge coming for some time now and yet few seem to have found the secret sauce to long-term sustainable revenues. The business models are evolving but apparently not as rapidly as news consumption behaviours are changing.

More than 60% of young Americans are getting their political news today via Facebook where news providers are not benefiting from the revenue streams. Desktop news consumption is being surpassed by mobile, the channel where ad revenues are at their lowest. So far, ridiculously low numbers of consumers are prepared to pay for their online news sources.

Needless to say there is plenty of debate within the news industry about the urgency for more radical thinking  about the business of news. Many of “the smartest people in journalism and digital media” certainly have it as a central topic in their predictions (or hopes) for the industry in 2016. What follows is just a snapshot.

From Amanda Hale of Talking Points Memo a leading US political news organisation:

As an industry, we have done very little to identify, pipeline, and train the publishing talent that will be responsible for securing the financial future of news.

After a bloody decade that has left America’s newspaper newsrooms half the size they were at their peak, we are still graduating thousands of students from both undergraduate and graduate editorial programs, and there is not a single major program devoted to the business side of news. Not one.

Celeste Lecompte of ProPublica a US newsroom that focuses on investigative journalism believes:

We’re in the midst of a second round of digital transformation, led this time by wireless broadband, mobile, and Internet-connected devices. Looking at where our journalistic skills and resources can use the new capabilities of these technologies to better serve our users’ needs points in new revenue directions well beyond the ad unit.

The newsroom’s creativity over the past few years has been part of a radical reimagining of what journalism looks like. Revenue models need to undergo a similar transformation.

Dan Colarusso executive editor of Reuters TV and suggests:

There’s a far more important game to be played in 2016 underpinning all the forward-looking business models and technologies: Everyone will be trying to win over and monetize a loyal base of readers or viewers.

It’s about survival. In a market where the audience is irreparably fragmented and new entrants are cripplingly overvalued, publishers and broadcasters will need to start to assemble the tribes that will help win the long war.

Rasmus Kleis Nielsen director of research at the Reuters Institute for the Study of Journalism at Oxford University concludes:

Most news organizations are still approaching the mobile web the way they approached the desktop web in the 1990s: Let’s build an audience first and figure out the money later.

How are news organizations meeting the mobile money challenge? It’s clear that sales and advertising are two key elements, but also that everyone — whether legacy media from print or broadcast, or digital-born startup — has to look for more diverse sources of revenue.

In 2016, we will surely see more experiments with sponsored content, new models for micropayments and subscriptions, hopefully new advertising formats for both display and video that are less annoying for users, and beyond that events, memberships, and e-commerce.

Whether on a global or local scale, it is clear that creation of and engagement with the thing we call “news” is changing radically. As summed up nicely by our own Mark Little (RTÉ > Storyful > Twitter) the shape of political discourse in this country has changed forever:

These are early days of a shift in our public discourse. The surface spectacle of social media is still a jarring presence to many. Its impact on political outcomes is still up for debate. But there is no mistaking the public utility that platforms such as Twitter have brought to the electoral process. Thirty years ago, each voter was an observer. Today, they have the power to be a participant long before they ever step into that polling station.

As news itself is being revolutionised so too the business of news must undergo something of a revolution. The old revenue streams simply won’t sustain quality newsrooms into the future. Where we’ll end up is anyone’s guess.