June 28, 2014

The Bear Case for Paid News

Nowadays, it seems, a report on the state of journalism pops out every other week. The latest I examined, by The Reuters Institute for the Study of Journalism, surveyed 18,000 people from 10 countries on the issue of digital news. As a news-anchor, I was especially interested in this one.

The survey presents data in nifty interactive charts, and covers areas like social media, mobiles and tablets, disruptive vs. traditional, and paying for news. The latest should be of special significance in light of Pew’s recent study, which showed a decline in advertising dollars, and a sharp fall of 33% in total revenue in the last 7 years (based on US data).

Data Highlights

  • Momentum: There has been very little change in the number of people who pay for online news. In most countries the figure dances around the 10% mark.

  • Upside potential: Of those who aren’t currently paying, 15% say they are likely to pay in the future.

  • Reach: In most countries print still accounts for more readers than online, and newspaper groups have kept their substantial reach and influence.

  • Social media: 57% of Facebook’s and 50% of Twitter’s users say they use them to find, share, or discuss a news story in a given week.

  • Mobiles and tablets: Tablet owners are twice as likely to pay for online news. A stronger correlation was found among Apple tablet owners, but no significant correlation towards any manufacturers or operating systems was found in the case of smartphones.

So, the days of print may not be as few as initially predicted, but the upward trend in digital subscriptions, caused by the introduction of many online-paywalls, is flattening. It seems like news organizations are struggling in the arena where the battles are headed.

More from the report:

Our findings are consistent with the recent Pew research report in the United States which suggests that industry activity does not necessarily mean more individuals are paying for news but rather that more revenue is being squeezed out of a smaller, or at least flat, number of paying consumers’.

Time will tell, but I don’t see paywalls being a sustainable long-term model for mainstream. Not with the kind of journalism it produces today.

The definition of journalism at Wikipedia reads like so:

Journalism is a method of inquiry and literary style that aims to provide a service to the public by the dissemination and analysis of news and other information.

And the twentieth century journalist was indeed tasked with both the delivery (dissemination) and the interpretation (analysis) of information. But can the twentieth century news company still do both in the twenty-first century?

As I’ve written before, I believe not. Not profitably anyway:

I think big organizations will dominate news breaking and reporting for a long time to come. They will still be responsible for the what,” but less and less for what does it mean?”. They’ll serve mainly as middlemen of information — an important and nontrivial task in itself — but not much more beyond that. … With their current business model, big syndicates operate horizontally and therefore cannot satisfy dedicated crowds. They can’t go in-depth with the subjects that matter to some of us all of the time, only those that matter to all of us some of the time.

The only comparative advantage legacy organizations still have today is in pure news reporting — the kind that relies on precedence, accuracy, and speed. But this kind of information quickly becomes abundant (through social media) and/or irrelevant, which effectively drives its value to zero. The only way to monetize this content — meant to be consumed by many but not valuable to most — is through wide-reach and advertising.

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