How will journalists get paid?
Journalism is obviously struggling for cash. I spent last week at 2 conferences — FIPP and IFRA — to meet with publishers to talk about Flightmode. The very, very first question, almost from anyone there, was “How will it make money?”. When talking to people outside of publishing, even investors, that’s usually the 10th question.
The extreme focus on revenues comes at the end of a tough decade. Journalism must be one of the most fragile industries out there. It’s been slowly and consistently abandoned by readers and advertisers, and to make matters worse we now have a US president who’s kicking an industry that’s already down.
The publishing industry feels a bit like a person going through a dry spell. We’ve all been there. Mojo fading, slowly losing track of your inherent value, aimlessly trying different directions without full conviction.
The FIPP conference had guest appearances by Facebook and Google. The cooler younger cousins who are definitely getting laid and full of mojo. In the platform economy they’ve been able to capture the digital ad market by fracking your attention and using superior data systems.
So the choice facing the publishing industry is whether to fight for the ads space or head for other mating grounds. The most successful publishers seem to be heading for other grounds.
The two directions for journalism
One direction is to use journalism as a vehicle for shopping. The latest galore here is to build an e-commerce platform, exemplified by Dennis who held the opening presentation. Dennis uses its writing about cars to make serious cash on a marketplace called BuyaCar. One publisher said they now decide what to write based on what people are buying. That’s the most sure-fire way to know that their writing is relevant amid a sea of noise.
The other direction is to double down on your specialisation and charge money for your work. Either through print subscriptions, through online paywalls or by hosting events. Either way, get paid. Clear examples here are The Economist and Harvard Business Review (HBR). One consultancy firmly told an attentive audience that if they’re not charging for content in 2017, they should get out of the business.
One conference participant quoted George Orwell. It felt like an apt description of these two directions:
“Journalism is printing what someone else does not want printed: everything else is public relations.”
Publishers competing with Amazon
The direction of e-commerce may seem a bit extreme, but in reality it’s not. It’s just a natural extension of creating paid content, which in itself is just an extension of ads.
In fact, many of the most successful publishers of quality journalism — The Atlantic, Vice, Buzzfeed (yes, they produce tonnes of quality) — are pursuing a paid content strategy. There’s a thought that journalists can work on two tracks. One that is paid to create engaging content on behalf of advertisers and another that is totally free of external pressures, giving journalists the ability to ignore clicks and create truly original content.
In fact, this is not really that different to how the old newspapers worked. The back pages were more lucrative in terms of ads space. It’s more attractive to place a gardening ad next to an article on homes than next to the latest report from a war-torn country. The ads in the back pages subsidised the front pages.
Now these lines are getting even more blurred. The ads are merging with the text and the publishers start taking commissions on the products being sold. This should be a cause for concern. Journalists doubling down as public relations is eerie, especially as the PR industry already trumps journalism in terms of employment. We are heading into a world where we might not know the intention behind any content. Adding to the confusion, Amazon-owner Jeff Bezos went the opposite direction, buying the Washington Post whose strategy focuses on paid subscriptions.
Despite these concerns, this direction will no doubt continue to exist. Some people — probably the majority — will continue to expect a free lunch when it comes to journalism. They will need to develop coping mechanisms to sort through what is genuine and what is not. Sifting through information overload and advertisement will just become a modern day survival skill. It means people will generally be distrustful of content, be it from journalists, influencers, advertisers, or fake news sites.
In this environment, fake news is nothing but a side-effect of the business model. This is not an issue solved by algorithms or by discrediting sources outside of the mainstream. To truly solve the issue of fake news we need to solve the business model for publishing. In a world of hidden intentions and low trust, anything can be labelled as fake. The belief that something is fake becomes subjective, as Trump has eminently shown. What needs to happen at the root, is that publishing needs to regain trust. For that to really happen, people will need to pay.
The other alternative, paying for trust
Some people will want to pay for trust. Trust in clean intentions and trust in craftsmanship. They will put a value on the public information space and a value on their own attention span. They will pay the actors who help safeguard these. The Economist and HBR are succeeding with subscriptions. De Correspondent and The Guardian are succeeding with donations.
So there is a willingness to pay among a minority of people. Among millennials that minority is even smaller, but I’m convinced it’s a minority that will grow significantly. Consciousness about media and tech is increasing rapidly on the back of digital addictions and political mess.
This echoes the trend in food and exercise, where people have developed a much more active awareness about what they do to their body. With greater awareness comes a willingness to spend time and money on quality.
But there’s obviously a missing link
One clear challenge for journalism is the mismatch in terms of price expectations. Journalism now competes with music and movies for a mere 10 USD a month. These are exceptional media experiences in terms of value-for-money. It looks like publishing is in for a shock when it comes to pricing. The market usually wins in these types of situations.
On return to Stockholm, I had a conversation with a friend who deeply cares about journalism. Despite being a millennial student with limited funds he just chose to become a donor to The Guardian. That’s how much he cares.
He told me the only way he’ll pay for Swedish journalism is if he’d get all major Swedish newspapers in one package. For that he’d pay 5 USD per month. 10 USD was definitely too much. Subscribing to the 5 biggest Swedish publishers would currently cost 90 USD per month. This is a millennial who really cares about journalism, yet his willingness to pay is almost 20x below market price. What a mismatch. What an opportunity.
The current pricing is only really suitable for older generations. An older media expert told me at the conference that he didn’t expect variety of sources. Sure he preferred that, but that was simply unimaginable growing up, so he didn’t consider it a basic hygiene factor the way my millennial friend does.
One generation sees variety of sources as a luxury, the other as a pre-condition. Odds are that the millennial view will prevail in the market, simply because it leads to a much better product. History is pretty clear that consumers who get used to a markedly better product rarely revert to lower standards. Instead suppliers figure out a way to deliver it cost-effectively.
There are already services focusing on this opportunity for bundling journalism. Blendle are working on it in the US, after success in the Netherlands. Multipass are working on it in France. Readly and Zinio bundle magazines.
We believe there’s another missing link
In our view, the missing step for real take-off in paid, high-quality journalism is the experience. There is a willingness to pay, but the burning problem for most consumers is not how to pay for journalism. The burning problem is a bad experience.
People not only want a huge variety of sources. They also want it to be curated to favour original perspectives, to be personalised in terms of interests and relevance, to be immersive in terms of style and format, and most importantly, to be concise and on point.
So there’s a mismatch in both price and experience. Flightmode’s aim is to match supply and demand, to become the marketplace for journalism. But before talking about price, we need to fix the experience. Our conviction is that publishers are way too focused on price. We don’t think they realise how bad the experience gap is for millennials when it comes to journalism. And older generations will only get as picky as us millennials. Why accept sub-standard products?
So after a week of conferences, we’re doubling down on product. We’ve now pushed an entirely new algorithm that is more attune to readers’ interests and feedback. Plus it’s more likely to promote original work on unexpected topics. We will get deeper into the weeds of the algorithm to enable 100s of small iterations and find a new programming team to introduce new features quicker. Create an awesome product basically.
We’re as convinced as ever that the experience problem comes first. We firmly believe solving experience will solve the pricing. We hope consumers will prove us right and that publishers will have the willingness to meet consumers where they are.