How Much Will That Cost?
Putting a price on innovation
What future journalists want to hear is that a publication is being innovative and trying new technologies. That is what attracts them to a publication or connects them to a certain brand. The company works hard for that reputation, but it must also work hard to keep the lights on and the staff paid… or else. Funding is what keeps that publication afloat and a lot of publications are getting very creative in the way that they receive that money.
I think that a lot of budding journalists are excited by companies that are doing new things with technology because that is what is popular, but how are publications getting that freedom financially? Most legacy publications are losing revenue through print subscription. If you look at the numbers for newspaper revenue, print isn’t completely dead. According to the Pew Research Institute, “around half of newspaper readers consume newspapers only in their printed form”. What this tells us is that with smaller publications, people still rely on the print version and that newspapers are still a source of income for those publications. What that research also reveals is that when it comes to digital media, there is a whole different game being played.
The most popular digital platform is currently Facebook and they are in the game of acquiring assets such as other companies. By using this model, Facebook gives off the impression of being innovative without having to hire engineers to create innovative work. Earlier this week, USA Today reported on a leak, released by TechCrunch, of the Snapchat revenue numbers for 2015. They reported that, “Just three years ago, Facebook offered to buy Snapchat for $4 billion, and CEO Evan Spiegel was widely criticized for not taking the deal”. Snapchat grabbed the attention of investors over the last year and was reportedly valued at $200 million on May 24th, 2016. Two days later, USA Today, reported that Snapchat had increased that value to $1.8 billion. I am sure that Facebook is way more interested in Snapchat now and you can only imagine the dollar signs in Mr. Zuckerberg’s eyes.
Other than investors, how is Snapchat gaining money from its users? The answer was given to me by Claire Wardle from the Tow Center of Digital Journalism at Columbia University. Wardle spoke to a group of students and faculty at the University of Oregon School of Journalism and Communication today about the intersection of journalism and Silicon Valley. In the talk, she focused on Snapchat’s revenue and said that each view of an advertisement on snapchat is worth .02 cents. This fact astonished me. This means if I open three of the discover channels and they each have four ads in each channel, Snapchat receives 30 cents from me; only me. Now if you factor in that Snapchat currently has, at least, 200 million users that would equal approximately $60,000,000 off of ad revenue. Now this number might be a little excessive, but you get the point.
Blue Chalk Media, a bi-coastal media company, utilizes it’s client work to help finance their award-winning creative journalistic work. This business model keeps both their clients and their producers happy. So has Blue Chalk found the solution to revenue woes for publications? I think that their solution is smart, but it requires Blue Chalk to focus roughly 90% of their work on branded content. Leaving only approximately 10% for the creative journalistic work. Another edge that Blue Chalk posseses is their creative team. If you watch the Subaru advertisement they produced in November 2014, you would want a Subaru too. The focus on the characters and their story makes advertising worth watching. It feels less like a sell and more like an experience. They even won a Davey Award for the spot.
In the end, innovation takes money but the way in which they receive funds depends on the consumer. What are their limits when it comes to advertisements? How are they consuming media? Do they seek out the news or do they want it to come to them? All of these questions have different answers for each individual, but think about yourself. How do you consume media? After you ask yourself that question, think about how that media receives revenue and whether you are providing a chunk of change.
