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MAPPING THE WORLD’S DIGITAL NEWS ECOSYSTEM
Abstract
The future of journalism is increasingly digital, mobile, and in flux. It is unexplored territory. Like the explorers and navigators of the Renaissance, various organizations – governments, NGOs, journalism groups, and universities, among others – have been trying to map the most promising routes through the new media ecosystem that will lead to sustainable publications that provide news and information crucial to a democratic society. As traditional news media organizations have lost revenues, laid off employees, and reduced coverage, new digital media have emerged as important players in providing public-service journalism, especially on the local level. Researchers from a variety of organizations have created databases of thousands of new digital media to study best practices and find new models for sustainability. This paper focuses on research conducted mainly in Europe, North America, and Latin America. Although the countries studied have varied cultural, linguistic, legal, business, and political environments, many of the findings were similar: The vast majority of the new digital media were fragile and barely surviving. The recommendations were also similar: These fledgling publishers needed training in management, marketing, sales, and technology, and they needed more diverse funding sources, better audience measurement, and more collaboration with public and private institutions. These road maps would be crucial to helping new digital media restore the declining commitment to accountability journalism so important to a democracy.
Keywords: digital media, entrepreneurial journalism, business models, media economics
I. Introduction
Human beings have been making maps of the skies, land, and seas for thousands of years (Whitehouse, 2000). The nautical maps of the Renaissance helped explorers find opportunities for trade and avoid danger. Much of the world was unknown territory for those explorers. And, of course, some of the maps were based on speculation and educated guesses that turned out to be wrong.
In the world of media today, researchers are creating, metaphorically speaking, new maps and for the same reasons: To show where the opportunities lie and where the dangers lurk. The difference is that the unknown territory is the future of journalism in the digital media ecosystem. Communications scholars and journalism organizations around the world have launched a variety of projects aimed at listing, categorizing, and analyzing the new digital news organizations. As will be shown, research goals have ranged from identifying and sharing best practices, to creating a network for advertising, to marshaling a lobby that might influence lawmakers and regulators in their various countries (Breiner, 2014). This paper is going to focus on the studies that have attempted to create maps for the future of journalism that show the most promising paths to sustainability and impact.
The story of how traditional media organizations have lost advertisers and audience to digital media disruption in the past decade is well known. When that decline was combined with the global economic slowdown that began in 2007, media organizations suffered mightily (in a crisis, many firms cut their advertising and marketing budgets first). One data point: between 2006 and 2014, U.S. newspapers saw advertising revenue decline 60 percent, or $30 billion (Pew Research, 2015). Most media organizations responded to the twin crises by cutting costs to preserve profit margins, and that meant severe cuts in payroll and significant cuts in coverage of government and public institutions. In the U.S., 18,000 newsroom jobs have been lost since 2006 (Pew Research, 2015). In Spain, to pick the most extreme example from Europe, 11,100 journalists have lost their jobs since the twin crises began (PR Noticias, 2014).
The reduced quality of public-service journalism occurred just at the moment when the public was discovering ways to be more involved in their governance and give more feedback to the powers-that-be about what they deemed important. In many newsrooms of traditional media, however, reporters continued to cover politics from the perspective of the insiders. They wrote for a small but influential audience that paid more attention to lobbyists and campaign contributors than the mass of citizens who paid taxes. Meanwhile, ordinary citizens were taking to blogs and social media to talk about issues that mattered to them – education, health care, income inequality, public transportation, the environment, gender issues, racism, and more.
Advertisers followed the audience to the Internet, but they did not always buy space and time from traditional media. They put their ad budgets into platforms like Google, Facebook, Yahoo, and Twitter, which used tracking technology to deliver targeted ads to specific consumer profiles in a way that promised to reduce the waste of using traditional mass media (eMarketer, 2014). Traditional media could not respond to that challenge effectively; they had not invested in technology and chose instead to cut expenses and preserve margins.
Some less obvious trends were also taking place in the background – the migration of news consumers to mobile devices and the growing importance of social media in distribution of news. Two events accelerated those trends. The debut of the iPhone in 2007 and Facebook’s decision in 2011 to focus its investments and development on mobile were a double blow to traditional media. The marriage of a popular new device to an application for the world’s most popular social network transformed a migration into a stampede toward mobile and social networks.
Graphic: Google and Facebook’s combined share of digital revenue grew
from 33 percent to 38 percent. Source: Pew Research.
Mobile media consumption has overtaken all other media formats, according to the World Press Trends 2015 report. Consumers around the world were spending 2.2 hours a day with mobile devices, or 37 percent of media time – more than television (81 minutes), desktop (70 minutes), radio (44 minutes), or print (33 minutes), (WAN-IFRA, 2015).
The stampede took yet more advertising away from traditional media and strengthened a new media monopoly, one of digital advertising dominated by technology platforms – mainly Google and Facebook but also players like Yahoo, Twitter, Instagram, LinkedIn, and others. Between them, Google and Facebook controlled 39 percent of all digital advertising revenue globally and 72 percent of all mobile ad revenue (eMarketer, 2014).
In the good old days before the Internet, only millionaires or big companies could afford to launch a new publication or broadcasting outlet, and the business model was fairly simple. The publisher or broadcaster had a near monopoly of distribution in a given media market, which made the time and space they offered to advertisers a scarce commodity. So publishers and broadcasters had tremendous pricing power. But the party was over for traditional media, and one of the main casualties in all the cost-cutting, particularly at print media, was the kind of watchdog journalism that provided a counterweight to political and economic power. At the same time, many countries now had thousands of laid-off journalists, and many decided to launch new digital media, often with the goal of filling the gaps in the lost coverage. For newcomers to the news business, the barriers to entry in the digital world were low. They did not need millions of dollars to buy a printing press or a broadcasting license. Anyone could use free or cheap tools to launch a website or open a channel on YouTube.
But the barriers to sustainable independent digital media were high. What most of the newcomers lacked was the knowledge, experience, and skills in the business and technology sides of journalism. They needed a road map, if you will, to show them how to transform a volunteer community-service project or niche publishing hobby into a productive journalism organization. Through thousands of small-scale experiments, these new digital media are blazing a trail for the future of journalism. They are taking risks that most major media will not or cannot take. The studies of new digital media that we will consider here are trying in various ways to identify successful strategies and tactics that any digital entrepreneur can use to map a road to sustainability. These studies vary widely in their methodology, rigor, and usefulness.
II. Mapping the digital ecosystem around the world
One of the best studies of the elements of long-term sustainability for journalism startups looked at 69 pure-player digital publications in nine countries. Three universities – the University of Tampere in Finland, University of Southern California’s Annenberg School for Communication and Journalism, and Waseda University Graduate School of Journalism in Japan – collaborated on the project, called “Chasing Sustainability on the Net” (Cook & Sirkkunen, 2012). The study included a database that was still available online in 2015.
The researchers selected for-profit media that were at or near profitability at the time of their study. They noted that “there has been little research or academic focus to date on the business models for for-profit journalism startups” (p. 8). And while they recognized that aspiring entrepreneurs could emulate the tactics of the models in their study, they also pointed out that the differences among countries in their legal systems, media subsidies, culture, language, commercial practices, and history of media made some tactics and strategies non-transferrable across borders.
In interviews conducted by the researchers, many of the entrepreneurs repeatedly made the same recommendations on the keys to achieving sustainability. They were:
· Keep the team small to control costs
· Master many skills, including business management and technology
· Diversify revenue sources
· Teach advertisers the value of digital vs. print campaigns
· Sell donors and members on a relationship with the mission of the publication
· Find a niche and relentlessly differentiate yourself
This study reviewed more than a dozen revenue sources used by the media organizations, including 16 different advertising models. The most common revenue sources used by the 69 publications in the study were advertising, selling content, selling data and technology, events, freelancing, and consulting (p. 119). As for the type and quality of content produced, the researchers observed:
The database and analysis confirm that startups are carving out – and playing – an increasing role in the service of journalism as reportage. What role they have in the accountability of journalism and civic society, however, remains unclear...This study proposes that a dynamic number of sites are being created: there is a rich and growing number of digital journalism offerings springing up in the space every day. As such, startups are likely to play an increasingly influential role in the accountability of journalism. (pp. 122-23).
France, Italy, Germany
About the same time as that study was published, the Reuters Institute for the Study of Journalism at Oxford University published a study of nine “strategically chosen” journalism startups in France, Italy, and Germany (Bruno & Nielsen 2012). The study’s title – Survival is Success – said everything about the precarious nature of digital startups. The authors chose to focus on Europe rather than the U.S. because “it is dangerous to assume that experiences coming out of a U.S. media market” would be of much use anywhere else in the world, given the enormous size of the U.S. population and “massive advertising spend (twice as high as many European countries as a percentage of GDP” (p. 7).
The researchers delved deeply into the legal, political, and cultural differences among the countries and observed that the dominance of legacy media, which benefited in varying degrees from public subsidies, made it difficult for startups to attract audiences and advertisers. Most of the nine were operating at a loss. The most successful financially was Mediapart in France, an investigative news site operating behind a paywall (p. 11).
Among the study’s observations and conclusions:
· There was no single formula that worked for all the startups (p. 13).
· Diverse revenue sources were needed. Advertising alone could not support a meaningful digital news operation in Western Europe (p. 67).
· European startups had a limited potential audience because of language, unlike English language sites that could attract a global audience (p. 9).
· The most successful of the nine start-ups in the study identified niches poorly served by the incumbent industry. They focused on unique content and developed unique strategies around that content. They operated with lean organizations (p. 8).
Interestingly, all of those elements were also part of the success formula mapped out in the study by Cook and Sirkkunen.
Journalism organizations in France and Italy have also created databases of digital startups with some of the same motivations – solidarity, self-help, and lobbying. In 2011, the website Journalismeinfo.fr published a list of 53 pure-player digital sites of local news in France (Robin & Berthier, 2011). The authors described a sector that was populated by very small media, a few with full-time salaried employees but most with volunteer staff who had an interest in their communities. Since then the sector has organized itself. A group called the Syndicate of the Independent Online Press (Syndicat de la Presse Indépendante d’Information en Ligne) has published an online list of 148 members (96 in Paris) that were publishing 175 titles (Spiil, 2015). The organization has published a guide of best practices on its website as well as sponsoring how-to seminars and training events.
Italy’s National Association of the Online Press (Associazione Nazionale Stampa Online) was formed to represent online publishers “of a local character”, a total of 80 publishers of 150 titles with a monthly audience of 15 million monthly readers. Its membership benefits included training meetings, legal assistance, and an advertising network. Its membership list was not available online.
Spain
The financial crisis hit Spain harder than most of the other European countries. Its unemployment has exceeded 20 percent since 2010. One of the leading organizations representing journalists in Spain, the Press Association of Madrid (Asociación de la Prensa de Madrid), reported that 11,100 journalists had lost their jobs and 100 media outlets had closed since the financial crisis began in 2007 (PR Noticias, 2014).
One consequence of all those layoffs has been that many of those journalists decided to start their own digital media. The Press Association of Madrid compiled a list of 406 sites launched by journalists since 2008 and still active as of 2014. According to a survey, completed by 120 of the publications, the content focus of the largest percentage was local news (27 percent), followed by art and culture (10 percent), sports (10 percent), and the rest spread over 14 other subjects (Asociación de la Prensa de Madrid, 2014, p. 79).