How startups are changing the media
The industry took a huge blow in the past decade. Can technology help save the future of ‘the fourth estate’?
As a former full-time journalist who left the media sector because of poor professional prospects, I can assure you that the industry is struggling — and not only in Greece. Traditional media (printed magazines and newspapers, radio and TV stations) could hardly compete with the free flow of information online; advertisers turned to online media but reduced media spending. The result: all media tried to catch the online wave, many fell, others learned to ride, a lot of newcomers stole their piece of market pie. For struggling media, expenses were minimized to the point where positions like graphic designers or proofreaders were considered non-essential on the payroll; the quality of information dropped considerably; misinformation is more common than ever.
Most printed media have seen a huge drop in sales and revenue, a lot of them stopped publishing, ending decades-long traditions. The media landscape has changed on a global level — it’s not the end; it’s just time for a disruption. As with every kind of disruption, it’s exciting to watch as Netflix and TiVo become the new Television, Spotify and TuneIn become the new Radio and online platforms become the new Newspapers.
Room for innovation
The media landscape is being re-shaped continuously. New formats catch the eye of the reader; new platforms offer better opportunities for dissemination while new generations of journalists embrace alternative ways of creating and sharing content online. But when it comes to startups, we must think out of the box. News reporting is not the only side of the media coin. There are a lot of challenges technology can address in this industry. Most of them can be grouped into these three basic categories:
- Content creation
- Revenue models
- Audience engagement
Let’s take a closer look.
Fake news
Misinformation and disinformation (the difference between them being that the latter contains bias) have always existed in the media industry. But, in the age of information, they have unsurprisingly obtained gigantic proportions. So, along with shrinking sales and ad revenue, fighting fake news is one of the greatest battles the media have to give nowadays. In 2016, Stanford researchers found that students from middle school, high school and college couldn’t tell the difference between journalism from trusted media sources and native ads or fake news sites, proving that even digital natives are not immune to biased and fake content. NewsGuard, Graphika and a bunch of promising European startups are fighting fake news along with (almost) everyone involved in the news industry.
Show and tell: new storytelling techniques
The recent pandemic made people turn to traditional media again in order to be properly informed –or not? While such an issue requires getting information from trusted sources, it was YouTube videos and websites featuring live updating graphs that kept readers clicking the refresh button on their browsers. The key takeaway for media: cutting-edge story presentation techniques and formats are a must. Editors working along with data-scientists or journalists with programming skills are essential in the newsroom, but these professionals are hard to find sometimes or are on a high-payroll that not every publication can support. Here’s an opportunity for startups to save the day: data visualization software that does not require programming skills is getting traction. Flourish is a nice example, with clients like BBC, The Financial Times and The Economist already exploring its potential. The low code movement can prove beneficial for editors and publishers alike, requiring a minimum learning curve.
Good journalists should know how to tell a good story. But in an era full of rich media formats, they need to show as well. Apart from visualization tools like Flourish, there’s a plentiful of other services that help editorial staff enrich their reporting. The International Consortium of Investigative Journalists chose to cooperate with Populate when exposing one of the greatest leaks of the latest years: The Panama Papers. Although not exclusively focused on the media sector, Populate puts interactive design, open data, web analytics, user experience and data visualization on the front row — so should the publishers.
Automatic for the people: AI generated text and insights
Jean-Paul Sartre wrote that “a novel is neither true nor false; but it must feel real”. Artificial Intelligence has progressed to the point that it can write fiction, novels and news stories without the readers even noticing it comes from a machine. Of course, news stories can only be true, so technology must also assist in ensuring that.
Lately, OpenAI’s GPT-3 is making headlines with how good its results are in synthesizing texts that feel natural, human-written. “AI is going to change the world, but GPT-3 is just a very early glimpse. We have a lot still to figure out” tweeted one of its creators, Sam Altman (the other one is Elon Musk). All the while, GPT-3 wrote an article for the Guardian — and it’s impressive. But the end result involves human editors cutting and pasting the best parts of eight different essays. The Guardian states: “Editing GPT-3’s op-ed was no different to editing a human op-ed. We cut lines and paragraphs, and rearranged the order of them in some places. Overall, it took less time to edit than many human op-eds.” Journalists, beware.
It’s no news that Natural Language Generation has been put to practice during the latest years by the media industry. Simple texts based on specific data like weather, earthquake and financial reports or sports recaps can be easily generated by software. It’s called automated journalism, algorithmic journalism or robot journalism and it’s often seen as a job threat to human journalists. A year ago, reportedly, a third of the content published by Bloomberg News was using some form of automated technology. But, that could also mean more time for editors to focus on the really important stories and not losing time for mundane tasks.
A couple of examples: RADAR (an acronym for Reporters And Data And Robots) is developing a fusion of human editorial skills and automation tech. Phrasee is an AI startup that specializes in language generation mainly for marketing copy. They have developed a Natural Language Generation system to generate millions of human-sounding variants at the touch of a button.
The Audience of One: Personalized content & ads
We live in the age of personalization, and the readers –just like any type of customer– demand to spend less time searching for what is of interest to them and more time consuming the desired content. Multimedia services like Netflix and Spotify know what their viewers/listeners want to watch/listen. Why haven’t news outlets still found a more effective way than a list of related articles on a side panel? That way they could also serve more targeted ads — it’s a win-win situation. Nevertheless, news outlets and readers alike should always consider diversity as a good thing, to avoid the phenomenon of echo chambers.
With Mixcloud, it is possible to listen to the world’s best radio presenters and DJs for free. This company helps to connect radio content to listeners in a revolutionizing way — by re-thinking how radio works and making it more personal.
Media consumers despise intrusive ads: 1 out of 3 Internet users use an ad-blocking tool to avoid being bombarded by offers and product images while surfing, driving advertisers to alternative ways of reaching the audience, like native content, but also more targeted approaches. Automation of buying and selling ad inventory could be an innovation area by helping publishers target the right audience at the right time, perhaps even on behalf of advertisers. AI also comes into play here. The most targeted advertising becomes, the more it pays out for advertisers. Businesses turned to Facebook, Instagram and Google because it gives them more insights on what the audience wants or expects to see. AI-driven platforms will increase the effectiveness of campaigns, thus increasing media ad revenue.
New realities: Mixed Media
While a few innovators have already experimented with Augmented Reality (AR) and Virtual Reality (VR), the technologies haven’t quite captivated the audience, much like 3D movies. But just like VR gaming, as technology is getting more immersive, it could be possible to see more mixed reality media content in the near future. Stereosense is an example — it allows anyone, with no programming knowledge, to create VR content in minutes.
People have the power: Social Media and Crowd-powered platforms
The media industry is usually following the trends instead of creating them when it comes to directly engaging with their audience in real time. Live streaming is not a social media platform invention — on the contrary, it’s social media’s attempt to play the role of traditional news programs. But Facebook,Twitter, Instagram and TikTok is where the audiences hang out, so the media outlets had to turn to them in order to broadcast their content to more people. Audiences consume information in a variety of ways, so content must be distributed in a variety of ways as well. A single distribution platform can be quite effective but it can only reach a finite number of people. To grow a medium’s audience, its content must be distributed and diversified across different platforms and devices. It’s worth noting that during the first lockdown, overall media consumption jumped significantly in the first quarter of 2020, while video streaming increased from 19% in fourth-quarter 2019 to 25% in second-quarter 2020 (Nielsen).
Heavy penetration of social media has also resulted in enabling the creation of more creators. Anyone with an Internet connection and the right tools/platform can become a streamer, a writer, a presenter, a curator — you name it. It was YouTube, Instagram and Twitch that created the first influencers. But a lot of platforms exist for all content formats. This very platform is one, Medium. Let’s not forget the continuing rise of podcasts. But perhaps most famously, Substack saw good growth in the last year, attracting a total funding amount of $17.4M up to now.
Caffeine is a new kind of broadcast company that aims to ensure creation and distribution of live, interactive content. Their social broadcasting platform which makes it easier for people to create their own shows and watch new interactive content with friends. Founded in 2016, it has gathered a total funding amount of $259M so far.
Aphetor, a Velocity.Partners portfolio company, is a proprietary content streaming platform focused on sports entertainment that allows users and influencers to benefit from streaming their own content and targets a Gen Z and millennial audience.
Subscription models and new revenue streams
The COVID-19 pandemic slashed ad spend, while it caused cancellation of events like conferences, which are often a source of income for established media houses. Publications that had built subscription revenue bases were in a better position to weather declines in other media incomes than peers who hadn’t, reports TechCrunch.
Pico saw strong growth in the COVID-19 era. It is a solution for media companies who want to develop membership and subscription based systems. It provides a platform that integrates email signups, on-site analytics, and payments. It is driven by two key conversion points — turning anonymous users into email signups and getting readers to pay.
Upworthy (now merged with GOOD) is a social impact company with a mass audience. They work with brands and communities to create participatory campaigns and shareable stories that drive powerful results across business and society. You guessed correctly — their revenues come from collaborations.
Today’s consumer has more power than ever. Media consumers are also product/service consumers. Some news/entertainment sites are taking advantage of this reality by recommending to their audiences specific products based on feedback and analytics, keeping their readers happy and increasing their revenue. TheSkimm and Goop are some examples. Specifically, it is reported that commerce represents 50% of Goop’s revenues (the company has also recently raised $50 million in Series C funding, in order to expand into new markets and product categories).
Which brings us to how the media can get feedback from their community.
Getting feedback beyond comments
As the population of Planet Internet has exceeded 4.8 billion users (more than half of the Earth’s inhabitants), everyone who has access to the Web has an opinion and the freedom to express it. Popular websites can no longer cope with the volume of comments that populate not only every article on their own domain, but also every post on every platform they maintain a digital presence in. The solution? Disabling comments. But how can editors get feedback on their stories if a wall is built between them and the audience?
CrowdTangle, a startup that was founded in 2011 (and was acquired by Facebook in 2016), built a platform that has become one of the leading tools for helping publishers take advantage of social media to tell their stories. CrowdTangle helps publishers identify great stories, measure social performance, and identify influencers. It is being used by newspapers, television stations, digital media outlets, investigative journalists, entertainment companies, sports teams and nonprofits all over the world.
Bonobo AI, a conversational intelligence platform built to empower organizations to know their customers at scale was founded in Tel Aviv in 2017 and got acquired by Salesforce in May 2019.
Hearken creates innovative community engagement processes that help clients leverage their networks to accelerate growth. They have worked with acclaimed news organizations such as ABC News, BBC and The Boston Globe.
Swayable built a cloud-based technology platform that measures how effectively media content changes opinions, helping their clients increase the impact of their stories.
Notable Media Support Initiatives
For those building or considering building a media-related solution, it is worth mentioning just a few initiatives that aim to support the news industry.
Google News Initiative was a great support mechanism for the media industry. It launched in 2018 with a $300 million commitment to help build a more sustainable future for news, and although 2019 was announced as the last year for acceptance of applications, the search giant launched a Journalism Emergency Relief Fund to deliver urgent aid to thousands of small, medium and local news publishers globally, and also recently announced a licensing program to pay publishers for high-quality content for a new news experience launching later this year. Several other organizations are supporting the media industry in various ways, but startups and the media should tighten their relationships.
iMEdD is a non profit organization founded in 2018 with the exclusive donation of Stavros Niarchos Foundation and the goal to build a hub of new age journalism that embraces synergies and the development of ideas and new endeavors. iMEdD’s incubator hosts profit and non-profit organizations as well as individuals and teams who wish to implement a specific innovative project in the field of journalism.
Hats off to Betty Tsakarestou, an agile academic with close ties to the market, for establishing the ADandPRLAB in Panteion University in Athens with the aim to educate students of the media faculty in entrepreneurship practices and methods. Velocity.Partners is among its collaborators.
The future of the media is not nebulous. It is clear that the media need to embrace technology in every aspect of their operation. Is your company building a product related to the industry? Do not hesitate to contact Velocity.Partners by sending your pitch deck at start@velocitypartners.vc. Let’s grab the headlines together!
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About the author
Maria Kokidou is a content creator emphasizing on technology, entrepreneurship and innovation. She has worked for many years as an editor and served as the editor in chief of the Greek edition of PC Magazine for the most years of its print life. Currently, Maria holds the position of the Innovation Lead in Found.ation, where she acts as the leading editor for the ‘Startups in Greece’ annual ecosystem report, among others, as well as a startup mentor and chief content manager.
About Velocity.Partners
Velocity.Partners is an industry-agnostic Venture Capital fund. Our mission is to fuel Greek entrepreneurs around the globe to build world-class technology companies.
We invest in pre-Seed & Seed stages, typically up to €500K, and follow up next rounds, helping our companies build their team, prove product-market fit, gain market traction and get ready for big-league VCs along the way.
Our portfolio gets instant access to a global network of industry experts, international investors and potential clients. We also offer lifelong operational support, strategic advice and mentoring as needed.
Velocity.Partners is part of the EquiFund family of venture capital funds and is also supported by the Operational Program “Competitiveness, Entrepreneurship & Innovation” (EPAnEK).
