journalism

The Future of Print Journalism Pt 2: Business Models


Online news: the way of the future

In my last post I briefly mentioned the driving force behind the decline in print journalism – declining advertising dollars. In this post I will explore the different models newspapers can adopt in order to survive in the Internet age. I will examine the merits and disadvantages of each, and determine their feasibility.

As my last post established, newspapers need to adapt and offer content online. A failure to do so will most likely lead to the inevitable: death. These are some of the options that I’ve found:

  1. Free or discounted hardware with contracts for content

Involves paying for content by signing up to a contract. You are then given a free or heavily discounted iPad or other portable tablet device, which will act as a ‘modern newspaper’.

Some consider the iPad the modern newspaper

The problem with this model is that it limits the number of potential readers. A Nielson survey conducted in 52 countries found that in 2011 80% of consumers would cease to use a website that charges. As a consequence, this model is highly unlikely to attract new readers. Further, 71% of respondents say online content must be considerably better than what is offered for free before they pay for it. Hence, there is a heavy reliance on producing high quality content, and a lack of quality from competitors or substitutes that offer free content.

  1. Micropayments

This model involves paying to read each article. Typically, there will be a number of free articles, allowing for new readers to become engaged with a newspaper’s (or, more aptly, news site’s) content. Theoretically, once a consumer becomes an engaged reader they will then be willing to pay for the “exclusive” articles. This model represents the halfway point between paying for content and a free-for-all system. The only lingering question is whether it can generate enough revenue to be sustainable.

  1. Tiered (or metered) system

The tiered model gives readers free access to a number of articles. For example, free access to the first 20 articles a month and then starts charging beyond that point. The central problem with this model is that it punishes engaged readers. Instead of rewarding good behaviour – reading a lot of articles – it charges for the privilege. On a basic psychological level this encourages engaged readers to look elsewhere for their news. The New York Times implemented this system in 2005 with ‘Time Select’, which was abandoned in 2007, due to its ineffectiveness. Fairfax newspapers The Sydney Morning Herald and The Age and others currently use this system. It remains to be seen whether it will be financially successful long-term, however. Given the number of journalists that have been recently laid off, it appears unlikely.

  1. Day pass

Users are charged only on the days when they access the content. In other words, they subscribe for 6 months, but a day is only counted if you actually access the content. This model has all the same problems as the first.

  1. Customized content

The customized content model allows each user to select the content they will subscribe to by topic. For example, they may wish to only read the sport section, so they are able to subscribe to only this content. They will be charged based on the number of sections they wish to access.

  1. Free online access for print subscribers

This model is simple: if you have a newspaper subscription, you can access the online content for free. The motive behind this model is to attempt to save print newspapers. For readers there is greater inventive to pay for a subscription than to go online for the publication. This model is at odds with the increasingly common consumer habit of going online for news.

  1. Free for all

The free-for-all model sounds nice for users. Unfortunately, the revenue generated by online advertising is not enough to make it a very attractive option. It isn’t the worst model though. Adopted by the United Kingdom’s pre-eminent intellectual newspaper, The Guardian, they posted very worrying losses last year. Nevertheless, this model has a view to long-term sustainability. While online advertising does not generate anywhere near as much as print advertising at the moment, the amount of money being spent on it has been increasing dramatically year on year over the last 5 years.

As part of The Guardian’s strategy, they also aim to expand their readership into new markets. Indeed, with a larger readership base comes greater online advertising money. Thus far they have expanded into Australia, the U.S. and are beginning their expansion into Asia. It is an ambitious and bold strategy, but with the drastic decline in print journalism dollars it may prove to be the only way to survive.

In the video below New Yorker journalist, Ken Auletta, and New York Times editor David Carr, debate the effectiveness of the subscription model and the free for all. As they point out, The Guardian aims to first build their readership, then they will probably begin charging on a subscription model. Ideally, by this stage they will have the largest readership of any newspaper in the world. They will then be able to capture more value than ever.

Conclusion

It is unclear which model will prove to be most sustainable. Each have significant drawbacks that threaten long-term financial sustainability. My guess: it will require a combination of a few, and constant adaptation to meet consumer needs and the competitive environment. It is likely that many newspapers will not be able to survive through these changes, as they confront the toughest period print journalism has ever faced.

Standard
journalism

The Future of Print Journalism

Print journalism has been profoundly affected by the Internet. Previously the ‘gatekeepers of information’, journalists were perceived as holding a position of responsibility in shaping how society receive and view issues. The free and instant access to news sources on the Internet has made news accessible through a multitude of online sources, leaving the position of print journalism in question. Now it faces a fork in the road: will it die, or adapt and change with the online environment?

is-print-dead

Online journalism: the inevitable future?

The move from consumers to online news sources has led to a continual decrease in newspaper sales and TV viewers. Accordingly, advertisers are choosing to spend elsewhere. It is becoming increasingly clear that the current media business model will die. If this trend continues there won’t be enough to sustain the production of newspapers, or pay the costs for running TV news.

journalism-infographic1-e1374623514409

As the statistics in the infographic above illustrate, the death of print newspapers appears inevitable. What are the implications if print journalism does go the way of the dinosaur though?

The role of the journalist is an important one. They are responsible for reporting the news and issues in an objective and ethical manner, using credible sources and only dealing in facts. Of course, some media outlets have been guilty of sensationalist, unethical and biased reporting, particularly the tabloid media. By and large though, journalists have fulfilled this role.

The eroding role of journalists as the gatekeepers of news has raised one important question: how can we trust news reported by Internet sources? Most of these sources do not have the same checks in place to ensure the information is accurate. If journalists incorrectly reported a story, displayed bias or defamed someone they often faced legal consequences. The anonymous nature of online reporters makes this nearly impossible. Bias, slander and rumour can be reported with very little consequence.

Another implication is the fact that people who use Internet for news have become blind to many important issues. The media has previously had an important role in ranking the most important stories for the day. People were able to gain a picture of world/national events, without the need to investigate for themselves. People are now more likely to find the news that they find most interesting, leaving a vast knowledge gap in their awareness of current affairs. The video below featuring New York Times editor David Carr and Bloomberg Media chairman Andrew Lack, discusses these phenomena at length.

The rise of the Internet has not been all bad for journalism though. It has given journalists a new tool for communication and resource for research. New stories can be discovered through social media or through other new sites. The contact details of sources can be discovered online. Hence they are able to produce more content at a faster rate.

As David Carr and Andrew Lack discuss in the video, it has also led to the rise of online news sites such as Buzzfeed, as well as news aggregators and blogs such as the Huffington Post. This suggests journalism will survive, but it will occupy a slightly different role. Indeed, whether people choose to read news produced by journalists will depend entirely upon their preferences and the type and quality of the work produced.

The central concern with the new age of Internet journalism is how to make money. Unless a more profitable business model is discovered, it is likely the number of journalists will continue to diminish. Buzzfeed and the Huffington Post rely on online advertising to survive, which as yet does not generate the same level of income as advertising did for the traditional media. Prominent newspapers such as The New York Times have introduced a pay wall, while others such as The Guardian offer content for free and are attempting to move into foreign markets in the western world.

Journalism will continue to exist, but not in its current form. As the world becomes more digitalised, journalists will be required to continually adapt to new trends. Their jobs will predicate on the type of content they produce and their ability to command a following of readers.

Standard