Category Archives: Business of journalism

Draft chapter on “The Changing Economic Contexts of Journalism”

Here is a a PDF of my draft chapter on “The Changing Economic Contexts of Journalism” for the 2nd edition of the ICA Handbook of Journalism Studies, edited by Karin Wahl-Jorgensen and Thomas Hanitzsch.

I’ve tried to summarize in about 30 pages the most important basic features of the business of news, its historical evolution (like the graph below), and where it is heading. Circulation and advertising

I’ve got a few weeks to finish it – suggestions welcome! (It is far too long, so suggestions of cuts especially welcome.)

I hope the chapter will provide a useful and readable introduction for both journalists and journalism studies students/scholars to key concept like the attention economy, two-sided markets, high fixed cost/low variable cost, news as a non-rivalrous experience good, market failure, media capture, and what the move to digital does and does not change.

Please note, I’ve prioritized media economics, historical background, and key current changes. Can’t cover everything in one chapter. Day-to-day developments are better covered in trade publications. And there is much, much more research out there (though too little I know of from the Global South), by economists, and by others. For those interested in critical political economy, I recommend the work of fx Robin Mansell and Janet Wasko, for those interested in ownership, the immense empirical research efforts lead by Eli Noam, Vanita Kohli-Khandekar’s work on the Indian media business has been really useful for me in other work, for those interested in advertising, the work of for example Joe Turow, and much more beyond that.

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The business of news after advertising?

I’m on a panel at the 2018 International Journalism Festival on “the business of news after advertising?” with Raju Narisetti, Rene Kaplan, and Janine Gibson.

Here are my background notes for the session, in part based on things I’ve written elsewhere, including this Nieman Lab post about how the business of news after advertising may look a lot like the business of news before advertising (more elite-oriented, more often based on subsidies from for example political patrons) and this longer book chapter.

Key points are–

News production has historically been funded by advertising and sales, but the advertising investment in news is in long-term structural decline—in the US, for example, newspapers’ share of total advertising has been in steady decline for more than half a century.

Circulation and advertising

This is really important, because newspapers still account for the majority of the funds invested in news production. In US, Bureau of Labor statistics suggest print publishers still accounted for more than half of all journalists employed as of 2016.

Most legacy news media will never make kind of money off news that they made in past, because

1) they no longer have market power they had in low-choice environment,

2) their content bundle is being unbundled, and

3) they compete head-to-head w/platforms that offer advertisers cheap, targeted, unduplicated reach, and therefore dominate digital advertising.

(Some of this is shared with various partners through revenue sharing and the like — Google, for example, reported that they paid out 24% of total advertising revenues in Q4 2017 in various forms of “traffic acquisition costs”.)

Platforms

So, given dwindling cross-subsidies from legacy ops like print/broadcast, what lies ahead, beyond cost-cutting in many news orgs, in some countries possibly public subsidies, and in more and more cases a return to various forms of politically-motivated investment in news?

My fellow panellists demonstrate different approaches.

At Gizmodo, Raju Narisetti has pursued diversification with emphasis on different kinds of advertising.

At the Financial Times, Renee Kaplan and her colleagues focus on reader revenues.

At Buzzfeed, Janine Gibson and her colleagues have pursued off-site reach and revenue-sharing with platforms.

(Beyond this, we can look at the incremental growth in non-profit models for news provision, though the resources in aggregate are far smaller than those generated by private sector, for-profit news media.)

There is no one model that is right for every publisher in every country, but the basic  structural change seem clear and near-universal — advertising remains an impotant part of the business of news, but traditional forms of advertising (print, broadcast, and digital display) are declining, because most advertisers seem to think they get more value for money elsewhere (and they were always interested in audiences’ attention, not news in itself).

News organizations who want to thrive in this changing environment have to operate very lean cost structures and seek to generate other revenues, for example by pursuing new forms of distinct digital advertising, by seeking reader revenues, or by trying to leverage platforms for reach and revenue-sharing.

“The Changing Business of Journalism and its Implications for Democracy” as free download

Back in 2010, David Levy and I edited a collection of essays on The Changing Business of Journalism and its Implications for Democracy, published by the Reuters Institute for the Study of Journalism here in Oxford.

We have today made the whole book available for download here [PDF]. (All the hard copies have been sold!)

In addition to the chapters written by David, Robert Picard, and myself, the book contains interesting contributions by Alice Antheaume (Sciences Po, Paris), Michael Brüggemann (University of Zürich, now Hamburg), Frank Esser (University of Zürich), John Lloyd (University of Oxford/Financial Times), Hannu Nieminen (University of Helsinki),  Mauro Porto (Tulane University), Michael Schudson (Columbia University), Daya Kishan Thussu (University of Westminster), and Sacha Wunsch-Vincent (World Intellectual Property Organisation and formerly OECD).

Nicholas Lemann and Paolo Mancini provided the advance praise with some very nice quotes.

The Changing Business of Journalism and its Implications for Democracy, as the only rigorous global survey of a situation usually discussed on the basis of anecdote and unproved assertion, is an indispensable and necessary work. It ought to open the way for real progress in reinventing journalism.

Nicholas Lemann, Dean and Henry R. Luce Professor at the Columbia University Graduate School of Journalism

This is a very detailed and rich analysis of the structural changes in today’s business of journalism: the media in many countries face a deep crisis caused both by new technologies and more general economic circumstances while in others they are experiencing rapid growth. In both cases the entire structure of the field is undergoing a dramatic change in terms of professional practice and in how media are organized and run. This book represents an indispensable tool for all those who want to understand where journalism and democracy are going today.

Paolo Mancini, Professor at Università di Perugia and co-author of Comparing Media Systems (Cambridge, 2004).

The full table of content looks as follows:

Contents

Executive summary

1. The Changing Business of Journalism and its
Implications for Democracy
Rasmus Kleis Nielsen and David A. L. Levy

2. A Business Perspective on Challenges Facing Journalism
Robert G. Picard

3. Online News: Recent Developments, New Business
Models and Future Prospects
Sacha Wunsch-Vincent

4. The Strategic Crisis of German Newspapers
Frank Esser and Michael Brüggemann

5. The Unravelling Finnish Media Policy Consensus?
Hannu Nieminen

6. The French Press and its Enduring Institutional Crisis
Alice Antheaume

7. The Press We Destroy
John Lloyd

8. News in Crisis in the United States: Panic – And Beyond
Michael Schudson

9. The Changing Landscape of Brazil’s News Media
Mauro P. Porto

10. The Business of ‘Bollywoodized’ Journalism
Daya Kishan Thussu

11. Which Way for the Business of Journalism?
Rasmus Kleis Nielsen and David A. L. Levy

The Future of News – European Parliament

March 1, I spoke at a workshop on the future of news in the European Parliament organized by MEP Marietje Schaake (Dutch Democratic Party (D66),part of the Alliance of Liberals and Democrats for Europe (ALDE) group).

A video of the event should be available here.

c51wui0xqaajp8x-jpg-large

The video should be well worth watching — lots of interesting and important discussion, of fake news, of filter bubbles, and of various policy issues including copyright.

I was particularly struck by the contrast between what I couldn’t help but feel was deep pessimism from Francois Le Hodey (CEO of the IPM publishing group which owns, amongst other things, the daily newspaper  La Libre Belgique) and Rob Wijnberg (co-founder and editor of DeCorrespondent), who had a more optimistic take.

Despite (rightly) highlighting that many European publishers have built significant digital audiences and are investing aggressively in digital initiatives, Le Hodey said several times “we have got five years”. He argued that it takes “between €50 million and €200 million” a year to fund and run a proper newsroom, and pointed out that print revenues are currently shrinking much faster than digital revenues are growing.

Wijnberg in a way was much more critical of existing journalism in terms of the quality and public value of much of it (arguing it often doesn’t actually help people understand the world, because it focuses on episodes and exceptions rather than longer-term developments and general trends). But he was also much more optimistic about developing a sustainable business around reader contributions and others sources — as deCorrespondent has done in the Netherlands, now with more than 50,000 paying subscribers. His optimism may in part be about expectations — unlike the figure Le Hodey offered (based on what newspapers have historically been able to invest), he said deCorrespondent operates on a budget around €3 million a year — not easy to generate (as other start-ups have found), but surely easier than €50+ million. His position has, I felt, a lot in common with that Melissa Bell outlined earlier this year in her lecture at Oxford.

I gave a short presentation based on some of our recent research, including our work on private sector legacy news media (this report, with Alessio Cornia and Annika Sehl), digital-born news media (this report with Tom Nicholls and Nabeelah Shabbir), and broader trends in media use, markets, and policy across Europe (this report with Alessio Cornia and Antonis Kalogeropoulos), as well as some of the work we have under way on the notion of filter bubbles (see a short piece Richard Fletcher and I wrote here).

My main points are summarized on the slide below.

future-of-news-eu

The other speakers were Francois Le Hodey (CEO, IPM Group), Rob Wijnberg (Founder, De Correspondent), Marco Pancini (Director Of EU Public Policy, Google), Anne Appelbaum (Columnist, Washington Post), Richard Allen (Vice President Public Policy EMEA, Facebook), and Krisztina Stump (Deputy Head of Unit, Converging Media, Content Unit, Directorate General, Communications Networks, Content and Technology, European Commission).

What will news look like after advertising?

The most recent round of year-end predictions is out on the Nieman Lab site, always full of really interesting and inspiring reads. Joshua Benton has done an amazing job again.

I wrote mine on the question of what news will look like after advertising. Full piece here.

The link between advertising and news that has for so long provided so much of the money invested in professional journalism is coming apart. […]

Beyond the job cuts, this presents journalists with a challenge and an opportunity.

The challenge is that a profession that has taken pride in its detachment from commercial considerations will increasingly be asked to be more directly involved in developing new potentially profitable products.

The opportunity is to rethink what value looks like when the business models underlying news production change. At end of the day, most journalists would probably rather work for their readers than for their advertisers.

How are Indian newspapers handling their digital transition?

thumbnailBy some estimates, India is adding something like 250,000 new internet users every day right now, driven by the spread of cheap smartphone and (often limited) mobile web access. While still limited by uneven infrastructure and by deep inequality and poverty, digital media are growing very rapidly in India.

How are Indian newspapers handling their transition to this new environment? Their print business is still growing (especially in Hindi and vernacular languages, less so in English), and they have the advantage of being able to learn from experiences of newspapers elsewhere.

That is the question Zeenab Aneez, Sumandro Chattapadhyay, Vibodh Parthasarathi, and I took on in a recently published Reuters Institute Report called Indian Newspapers’ Digital Transition.

We focus here specifically on changes in newsroom organization and journalistic work-practices. In the future, I hope we can do more work on the business strategy of Indian newspapers (most seem to offer news for free, and base their digital business on dispay advertising, a model that others in other parts of the world have struggled with).

The report is produced in collaboration with the Centre for Internet and Society and is in a way a companion piece to the report on Digital Journalism Start-Ups in India that Arijit Sen and I published earlier this year.

Full report available here and executive summary below.

***

Indian Newspapers’ Digital Transition

By Zeenab Aneez, Sumandro Chattapadhyay, Vibodh Parthasarathi, and Rasmus Kleis Nielsen.

Published by the Reuters Institute for the Study of Journalism at the University of Oxford.

Produced in collaboration with the Centre for Internet and Society.

This report examines the digital transition underway at three leading newspapers in India, the Dainik Jagran in Hindi, English-language Hindustan Times, and Malayala Manorama in Malayalam. Our focus is on how they are changing their newsroom organisation and journalistic work to expand their digital presence and adapt to a changing media environment.

The background for the report is the rapid and continued growth in digital media use in India. Especially since 2010, internet use has grown at an explosive pace, driven by the spread of mobile web access, also outside large urban areas and the more affluent and highly educated English-language minority that have historically represented a large part of India’s internet users. Some analysts estimate more than 30% of Indians had some form of internet access by the end of 2015 (IAMAI-IMRB, 2015). With this growth has come a perceptible shift of audience attention and advertising investment away from legacy media like print and television and towards digital media. This shift has been accompanied by the launch of a number of new digital media start-ups in India and, especially, the growing role of large international technology companies investing in the Indian market.

These developments present Indian newspapers with new challenges and opportunities. Print circulation and advertising is still growing in India, but more slowly than in the past, and especially the English-language market seems saturated and ripe for the shift towards digital media that has happened elsewhere. From 2014 to 2015, the Indian advertising market grew by 13%. Print grew 8%, but English-language newspaper advertising only half of that. Digital advertising, in contrast, grew by 38%, and is projected to continue to grow for years to come as digital media become more central to India’s overall media environment (KPMG-FICCI, 2016).

If they want to secure their long-term future and continued editorial and commercial success, Indian newspapers have to adapt to these changes. The three case studies in this report represent three different examples of how major newspapers are navigating this transition.

Based on over 30 interviews conducted with senior management, editors, and rank-and-file reporters from three major newspapers, as well as other senior journalists and researchers who have wider experience in the Indian news industry, plus secondary sources including industry reports and academic research, we show the following.

  • All three newspapers are proactively investing in digital media technology and expertise, and adapting their editorial priorities, parts of their daily workflow, distribution strategies, and business model to the rise of digital media. Tools like Chartbeat and Dataminr are now commonplace; search engine optimisation, social media optimisation, and audience analytics are part of everyday work; and some are experimenting with new formats (Hindustan Times was a launch partner for Facebook Instant Articles; Manorama Online has produced both Virtual Reality and 360 videos, an Apple watch app, and is on Amazon Echo).
  • Given that the print newspaper industry is still growing in India, especially in Indian-language markets, these newspapers are innovating from a position of relative strength in comparison to their North American and European counterparts. However, this is done with the awareness that that print is becoming a relatively less important part of the Indian media environment, and digital media more important. Short-term, reach and profits come from print, but longer term, all have to build a strong digital presence to succeed editorially and commercially.
  • All three newspapers aim to do this by building on the assets they have as legacy media organisations, and trying to leverage their brand reputation, audience reach, and editorial resources to maintain an edge over digital news start-ups and international news providers. Their legacy, however, offers not only assets, but also liabilities. As successful incumbents, all of them struggle with the inertia that comes from established organisational structures and professional cultures. To change their organisation and culture, and thus more effectively combine new technologies and skills with existing core competences, each newspaper is not only investing in digital media and personnel, but also trying to change at least parts of the existing newspaper to adapt to an increasingly digital media environment.
  • They do this in different ways. At Dainik Jagran and Malayala Manorama, the focus has been on building up separate digital operations at Jagran.com and Manorama Online, apart from the printed newspaper itself. At the Hindustan Times, in contrast, the aim has been to integrate print and digital in a joint operation working across platforms and channels. Dainik Jagran and Malayala Manoroma have thus focused mostly on building up new digital assets, whereas the Hindustan Times has been transforming existing assets to work across platforms. At Dainik Jagran and Malayala Manorama, much of the push for change has come from management, whereas there has been a stronger editorial involvement at the Hindustan Times, and a greater attempt to engage rank-and-file reporters through training sessions and other initiative designed to demonstrate not only the commercial importance, but also the editorial potential, of digital media.
  • All three newspapers have found that expanding their digital operations requires investment of money in new technologies and in staff with new skills. But it is also clear that this is not enough. Investment in technology has to be accompanied by a change in organisation and culture to effectively leverage existing assets in a digital media environment. In their attempts to do this, the most significant barriers have been a perceived cultural hierarchy, deeply ingrained especially in the newsroom, that print journalism is somehow inherently superior to digital journalism, and a lack of effective synergy between editorial leaders and managers, often combined with a lack of technical know-how. Money can buy new tools and bring in new expertise, but it cannot on its own change culture, ensure synergy, or align the organisation with new priorities. This requires leadership and broad-based change. Long-term, senior editors, management, and rank-and-file reporters will have to work and change together to secure Indian newspapers’ role in an increasingly digital media environment.

Digital media thus present Indian newspapers with challenges and opportunities similar to those newspapers have faced elsewhere. Only they face these from a position of greater strength, because of the continued growth in their print business, and with the benefit of having seen how things have developed in more technologically developed markets. We hope this report will help them navigate the digital transition ahead.

 

New report on digital-born news media in Europe

nicholls-thumbnailEven though digital-born news media like Slate and Salon, El Confidencial in Spain, and global players like the Huffington Post have been around for more than ten years, and every year seem to bring new digital-born news start-ups from Mic.com to Les Jours and El Español, there has been surprisingly little research systematically mapping these players, their editorial priorities, distribution strategies, and funding models.

A new Reuters Institute report by Tom Nicholls, Nabeelah Shabbir and myself builds on previous efforts by the Project for Excellent in Journalism, the Tow Center at Columbia, the SubMoJour project (and indeed ourselves with our work on Europe and India) by analyzing 12 different digital-born news media across France, Germany, Spain, and the UK.

We find that most digital-born news media sites in Europe are motivated by an ambition to do quality journalism, based on a lean cost structure, and have a pragmatic approach to new technology. The founders are normally journalists, often ex-newspaper journalists, and rarely come from a technology or finance background.

They are thus quite different from the kind of VC-backed, tech-oriented, aggresively expansionist image the word “start-up” brings to mind.

We identify three different kinds of digital-born news media (1) domestic for-profits like El Confidencial and Mediapart, (2) domestic non-profits like Correctiv and the Bureau for Investigative Journalism, and (3) international for-profit players like BuzzFeed and the Huffington Post.

Interestingly, while the international for-profit players all pursue global scale and offer news for free at the point of consumption, supported by advertising (display and native), our research suggests more and more domestic for-profits are moving away from the free, ad-supported approach and aim to build much more diverse funding models, often including a significant element of reader revenues.

Domestic digital-born news media seem stronger in those countries – like France and Spain – where legacy media are weaker, not in those – like Germany and the UK – where the digital media market is most developed. This is in line with what Nico Bruno and I found in our 2012 study of these issues.
Our research also suggests that many of the issues that these digital-born news media face are very similar to some of the key ones confronting legacy news media: how do you develop a clear editorial identity in a very crowded environment, how do you master distribution as media use is  more and more distributed and intermediated by platform companies, and how do you fund your work when the advertising market is so challenging for content producers?
The full report is available for free download here.