David Levy, Nic Newman and Matt Kelly at the GEN Summit 2016. PHOTO/COURTESY
By EMILY KODJO
The status quo on the news industry is that change is needed for journalism to survive and thrive.
As the Reuters Institute for the Study of Journalism will be unveiling its 2017 Digital News: Essential Data on the Future of News report at the GEN Summit in Vienna, on 22 June, Global Editors Network talked to Nic Newman, author of the report and Visiting Fellow for the Institute, to get an early glimpse of what we can expect from it and what is going to shape the media industry in the foreseeable future.
GEN: What trends are emerging this year and will be more prominent in the upcoming months for news?
Nic Newman: It’s been an extraordinary year for the news industry. Because of this perfect storm of fake news – and how to define them, business models and the growing realisation that platforms are not just platforms. Those three things together condition how we create journalism, how we distribute journalism. They show that we are really at an inflection point as an industry.
One of the things we do in the 2017 Digital News: Essential Data on the Future of News report, which we will be revealing at the GEN Summit, is that we get country reports from every country on the Reuters Institute supply side, giving us insights into what is going on in terms of jobs, journalistic jobs, and in terms of business models. The responses to that show an enormous strain. In Australia, for instance, with Fairfax losing 25 percent of editorial jobs. There are a lot of job cuts in journalism in quite a few countries but we are also seeing on the more positive side real innovation in business models. We are really starting to see a change there.
Last year I felt it was all quite depressing, it was a very depressing report to read. This year, there will be a few more moments of optimism, particularly around the inventiveness and creativity people are trying to take advantage of. Some of the content and the innovation we are seeing coming from some of our partners are extremely impressive.
So it is still a storm, it is still somewhat depressing but there are definitely more moments of ‘home-run’ in this year’s report.
What is going to be key for the future of news publications?
What is happening with platforms in general is key. Again, I am not going to give away the details of the report, because we want to reveal those details in June, but we are seeing a lot of change within the social networks space that is perhaps a bit hidden, we will explore this. We have seen for the past five years the growth and increasing power of Facebook specifically. We are now reaching a point of saturation within developed markets for the “old style” social networks, they are getting disrupted.
It is really about the role of platforms and algorithms. In terms of how people discover news, over the last five years we’ve seen this shift from the majority of people going directly to a news site and getting stories selected by an editor to many more people coming across (and then selecting) news via an algorithm.
This chart shows that across all countries editorial selection (direct, email, email notifications linked to an app) is now only just in the lead (52%) but for under 35s, who use more social media in particular we are now in a world where the majority of content is selected by an algorithm (55% compared with 43% for direct)
This is why the issue of who programmes the algorithms, the transparency of those algorithms and what kind of content they surface matter so much. We will be discussing this at the GEN Summit.
We will expand also lot on advanced messaging apps in the report, as for some of the new countries we are looking at this year, messaging is more powerful already than traditional social networks. We used to look at the US to understand what was happening and what was rising, now it would not make sense; Asia and Latin America are better examples for these emerging trends.
About the evolution of business models, do you see this affecting legacy media and digital pure players alike?
Absolutely. It is affecting everybody. What is interesting is that many of the pure players, many of them are only a few years old, are already becoming disrupted by changes in distribution models. So they you know they started out with one approach, which was very successful for a while, but they cannot assume this approach is going to continue to be successful, as every year something new changes the landscape, particularly in this disrupted world. If you take at what a few of the New York companies do on distributed models, then you will see this the year when the greatest change is happening.
On the legacy side what we are seeing is a major refocusing away from pure reach and pure numbers towards more subtle issues: “How do we create value? How do we get people to come back to our site more often?” One of the big elements that is in our report this year comes from the research we have conducted with focus groups, especially in Europe, on how consumers think about different new models paying for news. Not just paywalls but also some of the emerging models like micro-payments and bundle of different propositions, the aggregated ‘Spotify for news’ kind of ideas and we have been talking to consumers about how they would feel about some of those models.
What we found out is that we have gone from a world where everyone in the media assumed publishing was going to be funded by advertising, to one where everyone sensed that no publications can survive without a company paywall. And I believe that neither of those two are true. When we talked to consumers, it became obvious they cannot afford to pay for four or five digital subscriptions. What they really want is to be able to do what they are already doing in the digital world, navigating from one site to another. They love that and they do not want to go back to the actual world where they are forced, from a financial standpoint, to only get news from one provider.
So I don’t think that single stack paywalls are going to be the answer either. Ultimately publishers are going to think much more radically about how they combine those models into something that fits with what the consumer wants.
What will be the solution for publishers?
Everyone is realising that one single business model is not going to be enough. Essentially what is needed is, three, four or even five different approaches, meaning that publishers will be protected, to some degree, from a sudden down, a sudden change of an algorithm by Facebook for instance or a consequent downturn in terms of display advertising.
Having a more distributed model would help. We have been seeing increasingly over the last year, positive signs with publications starting to develop income streams around events, sponsored content or data. These make for different business models, every publisher will have a different approach.
To some extent these help, but above the business models, publications have to have real clarity on what they are about. The most successful media companies are very clear about what their fundamental strategy is. And then beneath that publishers need to iterate very quickly on those points, particularly if the fundamental strategy is about making money out of branded content for example and building distribution networks. If this was your strategy, you would have to change what you did, how your formats worked and which networks you were using.
You were mentioning a more optimistic outlook for the future of the news industry, what is affecting it?
I suppose this is what we will be discussing in June at the conference, which is the reason why everyone needs to be at the GEN Summit. As I described earlier, what we are seeing is partly because of the desperate state of the economic situation, with publications really counting now on business model innovation to move forward.
A very positive element being a source for hope is actually the fake news phenomenon. Before people everywhere felt that there wasn’t really a problem with news, from a consumer point of view. It was fine, it was all free, a lot of people thought they should never have to pay for it, which was part of the problem. What we are getting now is because of fake news, the general public has come to the realisation that journalism doesn’t come for free. There is good journalism, there is bad journalism, and there is quality journalism which cannot be found everywhere, it is actually quite scarce. It might be something people need to pay for. The increasing pollution of our news environments, which is I think is what is going on, is creating a situation where there is an opportunity for quality news brands or brands that have something to say to actually charge for their either directly or through a creative approach to advertising in the marketplace. I think this is the ray of hope I take from the whole ‘fake news’ debacle.
What is the next big disrupter, technology-wise, for news? How are immersive and other technologies faring in newsrooms?
For the first time this year for the report, we have asked about ‘voice’ – voice-activated devices such as Amazon’s Alexa, Echo or Echo Dot. People at the GEN Summit are going to be very surprised at some of the results we got around voice. Voice is going to be an incredibly important platform, and in the short term it is more important than wearables – glasses, watches etc. – for example which everyone got very excited about. Media companies need to take ‘voice’ seriously, as an emerging platform that is developing quite quickly.
So far voice-activated devices are sold in four countries, whereas for the report we take a look at 36 countries. In most countries those aren’t relevant yet but in countries we have surveyed voice for the first time, the extent of its usage not only in general, but for news specifically is impressive.
The obvious implication here is the rise of audio, beyond radio programs, or even the popularity for podcasts. ‘Voice’ as a new platform for news is only just emerging, it has just being launched. But in a five year perspective, it is going to be a major disrupter.
The Amazon Echo Dot. PHOTO/COURTESY
The VR for news report authored by Zillah Watson from the BBC, looks very widely at best practices in VR. Virtual reality, and any type of technology for immersive journalism, is a much longer term opportunity, it is going to take a long time to build. While we see a major potential in 360 journalism, there is a lot of experimentation going on around it at the moment. But there are quite a few barriers standing between the technology and innovations in 360 and implementation in newsrooms, it is going to take some time.
It could be years before we see the potential of VR, which I think is going to be very strong, but it is going to be different for ‘voice’, as it will be easier to implement, it will be really disruptive. Amazon is going to disrupt all kinds of business models including Google’s, since they mainly built their business on adjacent display in search. AR offers a lot of opportunities with huge bundle of technologies, bringing disruptions in almost every stage in the news valued chain.
About Nic Newman
Nic Newman is a journalist and digital strategist who played a key role in shaping the BBC’s internet services over more than a decade. He was a founding member of the BBC News Website, leading international coverage as World Editor (1997–2001). As Head of Product Development for BBC News he helped introduce innovations such as blogs, podcasting and on-demand video. He has played an important part in the development of social media strategies and guidelines for the wider BBC. Nic is currently a Visiting Fellow at the Reuters Institute for the Study of Journalism and a consultant on digital media.
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