2016 goes down as a memorable year for those in and around the media. Though audience levels have never been higher, the digital transformation burden weighed ever more heavily on news media’s back. Then “the media” saw itself pummeled endlessly in the run-up to the election and even more in the weeks following November 8. We’re still assessing the damage, but the underlying weakness of the business of media offers more existential questions.
Let’s look at the 2016 that was through the prism of numbers, and then look ahead.99%: That’s how much of Facebook’s stuff isn’t fake, per Mark Zuckerberg’s first flustered take on fake news in the wake of Trump’s win. “Of all the content on Facebook, more than 99% of what people see is authentic. Only a very small amount is fake news and hoaxes.” I loved two things about that number. First, people share more than five billion pieces of content daily, so one percent of that is a mere 50 million. Second, what tech company would celebrate a 99 percent up time? Ever heard a publisher proudly proclaim, “We get it right 99 times out of a hundred”?
Into 2017: Fake news is a societal issue bigger than even Facebook, even as the company tells us it is tackling the problem. It would be great to see a reasoned debate on the Digital Millennium Copyright Act, now 19 years old, which provided common carriers like Facebook near-complete protection for their content activities — and accidentally enabled them to become the mass media of our time, relegating content producers to bit players. Of course, in this political atmosphere, such a debate is probably impossible.
2: How Federal Communications Commissioners will be left as of January 20, as chairman (and Obama appointee) Tom Wheeler announced his departure last week. Net neutrality may be one casualty of what we can expect to be major FCC policy changes, as the biggest telco-plus players likely gain even more dominance in our information and entertainment lives. Comcast started this ball rolling years ago, and Verizon and AT&T are following. Bigness looks poised for victory. A level playing field for media (and others)? That may be a dream deferred.
Then there’s the never-say-topic of “cross-ownership.” Long ago, in a pre-digital world farther and farther away, the FCC decided that single companies shouldn’t own both TV and newspaper assets in single metro markets. Through all the years of change, and threats to both newspaper and, increasingly, local TV business models, that prohibition has endured. Within three days of each other at the end of last month, two big industry lobby groups (TV’s National Association of Broadcasters and newspapers’ News Media Alliance) called upon the next administration to get rid of the stringent prohibitions.
Into 2017: Watch this space. All kinds of good arguments can be made for how the old regulations don’t meet the realities of 21st-century media and tech. But if cross-ownership rules fade, which companies will move to dominate local news? Broadcasters, with very uneven track records in deep local news reporting, may well be ascendant, with their healthier-than-newspaper-company finances. Companies like NBC now invest more strategically in their digital products.
Further, in this political landscape, who knows who may come out of the woodwork? In 2014, the Koch brothers made a play for all of then-Tribune (now Tronc’s) big metro dailies, including The Chicago Tribune and Los Angeles Times. One more person to keep an eye on: Rupert Murdoch. 21st Century Fox has 28 regional TV stations in 17 markets, reaching 37 percent of television-owning households in the U.S. Those stations include seven of the top 10 markets: New York, Los Angeles, Chicago, Dallas, San Francisco, Washington, D.C., and Houston. Four years ago, Murdoch signaled his own interest in buying the Tribune newspapers. One big fly in that ointment: cross-ownership rules would have presumably then forced divestiture; in LA, for instance, if Murdoch had bought the LA Times, he’d have had to sell off his Fox 11 in LA. If cross-ownership rules are abandoned, “local news” is likely to fall into fewer and fewer hands, and two of them may be Rupert’s.
8.3 trillion: The estimated number of texts sent yearly worldwide.
Into 2017: Will messaging platforms continue to be a hot new thing for content producers? A number of publishers still rhapsodize about their Snapchat experiences, though as Snap changes its partnership terms, attitudes may change.
37: That’s how many years Diane Rehm did her public affairs program out of Washington, D.C.’s WAMU, before retiring this year. As one of the pioneers of the now-ubiquitous one-hour public radio talk show, Rehm leaves the airwaves at a time of pivotal generational change in public radio. This year, too, Garrison Keillor bid his adieu, and “The Best of Car Talk” reminds us fondly of the Magliozzi brothers in their prime. The “next generation of talent,” as WAMU general manager J.J. Yore describes it, has been moving into place at some of the bigger metro public radio stations and at NPR over the past several years.Into 2017: Podcasting now reshuffles the deck, mixing and matching talent on scheduled airtime and on demand, with unpredictable consequences. The movement of younger talent within the emerging podcast economy poses both a great opportunity and threat for public radio as we know it, and is a boon for newer entrants like Gimlet Media, Panoply, This American Life/Serial, and Midroll Media.
$10.11: The price of a single Gannett share at the close of the market on December 16. Gannett barely peeked above the double-digit mark after seeing its share price dip into single digits for most of the midyear, dropping from a 52-week high of $17.72. What brought a company esteemed by investors as the gold standard of remaining public newspaper companies to this point? Gannett’s tangle with irascible Tronc chairman Michael Ferro produced memorable soap opera of would-be newspaper M&A activity, amazing and amusing newspaper watchers for much of the year. While it seems somewhat like a sideshow given the welter of bigger problems, the fates of the largest and fourth-largest U.S. newspaper companies will matter to readers in dozens of cities.Into 2017: For those indulging in a bit of Gannettenfreude, bide your time. Gannett CEO Bob Dickey has had to reach out to larger shareholders to reassert confidence in his wider strategies of scale and consolidation. The first two months of 2017 will tell us whether Dickey has sufficient backing to renew his Tronc pursuit. This year, the newspaper company missed its deadline to nominate its own friendly-to-acquisition slate of directors. In 2017, it could do that, with a likely end-of-February deadline as it readies a new bid. Watch Gannett’s share price for signs of recovery; further watch Tronc’s, which has been bolstered by the ongoing major share purchases of its two principals, Ferro and vice-chairman Patrick Soon-Shiong. The former needs to get some juice and the latter needs to lose some to increase the chances of new deal going forward.
21%: The Wall Street Journal lost more than a fifth of its overall advertising revenue in the third quarter of 2016. It wasn’t alone. The New York Times saw an 18 percent print ad loss, while McClatchy reported a 17 percent loss, Gannett 15 percent and Tronc 11 percent.
Into 2017: Publishers half-joke that this year’s comps can only help next year. But I’m hearing forecasts of a decrease of another 10 percent or so in print revenue next year. With digital advertising unable to make it up, especially at the metros, 2017 will be another tough year.
Meanwhile, we can see the toll even at the House of Murdoch, which prefers to spend its money on TV and pay TV.
27,300: The number of journalists I estimate are now working at U.S. dailies. (There’s no official count anymore, and fewer publishers are publicly announcing cutbacks.) Almost 4,000 of these journalists work for the four national titles, leaving just 23,000 or so to cover the rest of the U.S. Not a good ratio. The size of the local press has declined by half.
Into 2017: How to fill the chasm of information ignorance? We look to the stronger independent metros, from Boston to Minneapolis to Dallas to Seattle. We will look to the first (MinnPost, Voice of San Diego, The Lens) and second generations (Billy Penn, Charlotte Agenda, Denverite) of city startups to see how much they can grow their coverage. We’ll see what the three largest companies — Gannett, Digital First Media, and Gatehouse Media, which combined own about a quarter of all U.S. dailies — do strategically and financially. As the Knight Foundation funds LION (Local Independent Online Publishers) and announces its new $1.5 million Knight News Match, will we see any models that actually turn around this dismal turn in journalism?10 million: Big number, right? That’s The New York Times’ goal for digital subscribers. CEO Mark Thompson has already laid out his 2020 plan, calling for a doubling of reader revenue, and we’re left to wonder: Is 10 million a serious goal or a dreamy surmise of a future, almost-entirely-digital Times?
The Times now claims 1.4 million digital news subscribers and another 230,000 or so crossword customers. So 10 million would be a 6X move. Or if we want to count the existing 1.1 million Sunday print subscribers — whom the Times wants to port over to more digital — then the Times is looking for a 4X bump.
Into 2017: Look for more testing of crossword-like add-on subscriptions. These could be add-ons to current Cooking or Watching apps, or new ones in health and other doing-as-compared-to-reading areas. The Times will also be marketing subscriptions outside the U.S; it’s already hit 180,000 international subscriptions, and there’s plenty of room for more.
Remember the “war” between the Times and The Wall Street Journal, declared soon after Rupert Murdoch’s purchase of Dow Jones nine years ago. While we can still depend on the Journal for best-in-the-business daily business journalism, 2017 looks to be the first post-war year: The Journal, as part of a staff reduction into the dozens, is reducing its “Greater New York” section to two pages daily and repositioning back toward business news. The company’s goal is three million digital subscribers, a number that seems puny compared to Thompson’s ambition.
37%: The percentage of New York Times revenue now driven by advertising. That’s down from 68 percent in 2005. The Times, like The Financial Times and the Wall Street Journal, has crossed over [“The newsonomics of crossover”], with Journal parent Dow Jones reporting about a third of revenues from advertising. Making advertising a secondary — though still vital — revenue source is the most important strategic goal for most news publishers; reader revenue, if backed by sufficient high-quality content and good digital products, proves far more stable than advertising. But it’s a goal only the national/global dailies have been able to achieve.
Into 2017: The reader revenue/ad revenue ratio problem doesn’t apply only to legacy newspaper media. Almost all companies that depend on ad revenue for a significant majority of their income face big questions of growth in the next several years. Facebook and Google suck up as much as 90 percent of all new digital ad revenue worldwide, and more than 60 percent in the U.S. Everyone from BuzzFeed to Bloomberg Media confronts that reality.
66%: The percentage of digital news reading that takes place on mobile on the weekends. On weekdays, users spend about the same amount of time reading news on mobile and desktop, because they’re at work.
Business news may be the last bastion of non-mobile reading, but even that’s changing. Bloomberg Media, which launched a new app last week, tells me that its total mobile unique visitors are up 92 percent compared to last year; Bloomberg has also seen a big shift to mobile reading on weekends. The Street, under new CEO David Callaway, plans new mobile launches early in 2017, and projects that mobile will make up more than two-thirds of traffic next year; it surpassed desktop for the first time this year.
0: The number of articles the Financial Times now places directly into Facebook’s once-vaunted Instant Articles. Why? It’s not a matter of high principle — it’s a matter of data, and one that The New York Times, which now puts just a select few on Instant Articles each day, sees the same way.“We’re really keen to explore how platforms can help our journalism reach new audiences, but we need to see a material return for our efforts — which we judge in the form of incremental reach, advertising and subscription value, and, most importantly, a direct relationship with the audience,” said Jon Slade, the FT’s commercial director. “Our goal is to achieve parity with our platform across those four dimensions, or significant increase in one to counterbalance reduction in another. In the case of Apple News and Instant Articles, the results were very limited, so we’ve re-focused efforts elsewhere.”
The Washington Post remains “all in” on Instant Article. Different pay strategies for different folks. The Times and FT, with close to 60 percent of their revenue coming from readers, figure they’ve matured their pay businesses enough to more judiciously select for paying customers. Jeff Bezos’ Post is years behind in digital subscriptions. Further, with its low-price, huge-volume goal, the Post’s philosophy remains reaching for ubiquity.
Into 2017: How many publishers do the same calculus (how many now have the capacity to really follow the piecemeal data?) and will pull out of platforms next year?