If you’re not paying for the product, then you’re not the customer — you’re the product being sold. The year 2018 will bring this wisdom fully into focus, elevating the news industry as innovators while reducing the giant Silicon Valley technology companies to the status of change-resistant dinosaurs.
As the news industry moves away from primary reliance on advertising as its core revenue model, publishers will focus on serving their readers better instead of how best to sell them to advertisers. For the first time in decades, several large news publishers now generate more revenues from readers than from advertisers. It’s hard to overstate this business-model pivot. Advertising used to deliver 80 percent of revenues for newspapers, with subscriptions accounting for 20 percent. In terms of profit, advertising was an even higher percentage of the total in the pre-digital era because print subscriptions require the expenses of ink, newsprint, printing, and distribution. As news publishers focus on digital subscriptions, the dynamics flip, with a high profit margin on each new digital subscription sold.
The first news publishers to succeed with digital subscriptions were the largest brands such as The Wall Street Journal, The New York Times, and The Washington Post. They now have teams of data scientists mapping which investments in journalism correlate to more digital subscriptions and higher renewal rates. New York Times CEO Mark Thompson says he think the Times can eventually get to 10 million digital subscribers, several times larger than the current level.
Regional and local newspapers are focused on growing digital subscriptions. The editor of the San Jose Mercury News, Neil Chase, in 2017 bought plastic funnels for his journalists marked with reminders of the digital subscription sales funnel: “Awareness, Engagement, Registration, Subscription.” (Neil says the 69-cent funnels can also be used to hold beer). Many digital news publishers have also abandoned the original sin that all information has to be free by launching subscription or membership programs.
News publishers were the original innovators in what’s now called the subscription economy. Newspapers and magazines have sold subscriptions for hundreds of years, making them among the pioneering subscription-based businesses. We can now subscribe to Netflix for video, Spotify for music, and Dollar Shave Club for razors. But news has long been supported by readers, giving some reassurance that the pivot to high-margin digital subscriptions will make a big difference to the sustainability of news publishers.
In contrast, the platform companies continue to focus on how they can monetize their users — with their users understood as their “products to be sold.” eMarketer estimates Google and Facebook alone will account for 63 percent of the digital advertising market in 2017. The tipping point will occur in 2018, as Google and Facebook take over 100 percent of the revenue growth in digital advertising, leaving a small and shrinking pie for everyone else.
Silicon Valley now has a reputation problem with its users, who are wondering if even getting free access to services such as Google search and the Facebook News Feed is such a great bargain. People increasingly understood they “pay” as the products being sold to advertisers. “News” from fake news brands has highlighted worry that the sometimes dubious quality of the information on these platforms means they are not the safe, well-lit environments people expect. In 2018, Silicon Valley will have to do more than fund academic studies to regain the trust of their users if they want to push back against governments around the world now considering regulating them or even breaking them up.
And so a prediction for 2018: The reputation of the news industry will rise (admittedly from a lowly base) as publishers focus more on serving readers, while the reputation of Silicon Valley will continue to erode (from its still high base), at least until the technology companies find ways to improve the experience for their users and no longer focus just on the profitable experience for their advertisers.
Gordon Crovitz is former publisher of The Wall Street Journal and cofounder of the startup NewsGuard.
Alexios Mantzarlis Moving fake news research out of the lab
Monika Bauerlein The firehose of falsehood
Feli Sánchez The year for guerrilla user research
Eric Ulken The year local publishers get smart(er) about change
Justin Kosslyn The year journalists become digital security experts
Charo Henríquez Training is an investment, not an expense
Jim Brady With the people, not just of the people
Claire Wardle Disinformation gets worse
Kathleen McElroy Building a news video experience native to mobile
Imaeyen Ibanga Longform video leads the way
Nikki Usher The year of The Washington Post
Tanzina Vega It’s time for media companies to #PassTheMic
Manoush Zomorodi Self-help as a publishing strategy
Caitria O'Neill The new court of public opinion
Juleyka Lantigua Women of color will reclaim and monetize our time
Matt Thompson Here come the attention managers
Will Sommer The year local media gets conservative
Jarrod Dicker Honesty in advertising
Corey Johnson The pro-fact resistance
Sam Ford The year of investing in processes
Nicholas Quah Stop talking trash about young people
Evie Nagy Pivot to mobile video frustration
Carlos Martínez de la Serna The new journalism commons
Trushar Barot The Jio-fication of India
Dan Shanoff You down with OTT? (Yeah, DTC)
Mandy Velez texting is lit rn, fam
Kristen Muller The year of the voter
Borja Echevarría TV goes digital, digital goes TV
Rasmus Kleis Nielsen The Snapchat scenario and the risk of more closed platforms
Aron Pilhofer We can’t leave the business to the business side any more
Tanya Cordrey Finally, the seeds of radical reinvention
Adam Thomas Sharing is caring: The year of the mentor
Mi-Ai Parrish Blockchain and trust
Rodney Benson Better, less read, and less trusted
Damon Krukowski Reviving the alt-weekly soul
Steve Grove The midterms are an opportunity
Emily Goligoski Looking beyond news for inspiration
Sam Sanders Shine the light on ourselves
Craig Newmark Working together toward sustainable solutions
Mariana Moura Santos Think local, act global
Kawandeep Virdee Zines had it right all along
Rachel Davis Mersey AI, with real smarts
Jim Moroney Newspapers have to be good enough for readers to pay for
Raney Aronson-Rath Transparency is the antidote to fake news
Carrie Brown-Smith Transparency finally takes off
Sara M. Watson Feeds will open up to new user-determined filters
Yvonne Leow The rise of video messaging
Miguel Castro The arrival of the impact producer
Michael Kuntz The only pivot that might work
Felix Salmon Covering bitcoin while owning bitcoin
Matt DeRienzo A recession, then a collapse
Hannah Cassius The year of the echo-chamber escapists
P. Kim Bui The reckoning is only beginning
Umbreen Bhatti The trust problem isn’t new
Betsy O'Donovan and Melody Kramer Skepticism and narcissism
Sarah Marshall Loyalty as the key performance indicator
Michelle Garcia Navigating journalistic transparency
Laura E. Davis Writing answers before you know the question
Mike Caulfield Refactoring media literacy for the networked age
Jennifer Coogan The future is female
Mario García Storytelling finally adapts to mobile
Vanessa K. DeLuca Women’s voices take center stage
Caitlin Thompson Podcasting models mature and diversify
Vivian Schiller Pivot to tomorrow
Mariano Blejman News games rule
Federica Cherubini The rise of bridge roles in news organizations
Richard Tofel The platforms’ power demands more reporters’ attention
Christopher Meighan Passive partnership is in the rearview
Valérie Bélair-Gagnon Seeking trust in fragmented spaces
Daniel Trielli The rich get richer, the poor scramble
C.W. Anderson The social media apocalypse
Lucas Graves From algorithms to institutions
Alice Antheaume Are you fluent in AI?
Joanne McNeil Gatekeeping the gatekeepers
Hossein Derakhshan Television has won
Susie Banikarim R.I.P. Pivot to Video (2017–2017)
Tracie Powell The muting of underserved voices
Renée Kaplan The year of quiet adjustments (shhh)
Ståle Grut Reclaiming audience interaction from social networks
Basile Simon We need better career paths for news nerds
Marie Gilot No assholes allowed
Mira Lowe The year of the local watchdog
Millie Tran and Stine Bauer Dahlberg (Hint: It’s about your brand)
Heather Bryant Building the ecosystems for collaboration
Kyle Ellis Let’s build our way out of this
Francesco Marconi The year of machine-to-machine journalism
Mary Walter-Brown Show a little vulnerability
Cory Haik Suffering from realness, pivoting to impact
Kinsey Wilson Facebook and Google: Help out or pay up
Tamar Charney We get serious about algorithms
Taylor Lorenz Social and media will split
Joanne Lipman Journalists inventing revenue streams
Nicholas Diakopoulos Fortifying social media from automated inauthenticity
Cristina Wilson The year of the Instagram Story
Juliette De Maeyer A responsible press criticism
Marcela Donini and Thiago Herdy Collaboration is the way forward for Brazilian journalism
Alan Soon The rise of start of psychographic, micro-targeted media
Rick Berke Value is the watchword
Amy Webb Listen to weak signals
S. Mitra Kalita The arc of news and audience
Molly de Aguiar Good journalism won’t be enough
Jennifer Choi Standing up for us and for each other
AX Mina Memes and visuals come to the fore
Pete Brown Push alerts, personalized
Zizi Papacharissi Women come back
Andrew Losowsky The year of resilience
Rubina Madan Fillion Unlocking the potential of AI
Jennifer Brandel and Mónica Guzmán The editorial meeting of the future
Julia B. Chan Looking for loyalty in all the right places
Jassim Ahmad Thriving on change
Dannagal G. Young Stop covering politics as a game
Helen Havlak Keywords, not publishers, power the world’s biggest feeds
Jesse Holcomb Information disorder, coming to a congressional district near you
Doris Truong Computer vision vs. the Internet vigilantes
Lam Thuy Vo Breaking free from the tyranny of the loudest
Jared Newman Venture funding and digital news don’t mix
Debra Adams Simmons And a woman shall lead them
Rachel Schallom Better design helps differentiate opinion and news
Mary Meehan Real lives are at stake in rural areas
Tim Carmody Watch out for Spotify
Alastair Coote The year of self-improvement
Jacqui Cheng Retailers move into content
Elizabeth Jensen Show your work
Amie Ferris-Rotman More female reporters abroad (please)
Pablo Boczkowski The rise of skeptical reading
Andrew Haeg The year journalists become relationship builders
Ray Soto VR reaches the next level
Eric Nuzum Beyond the narrative arc
Gordon Crovitz Serving readers over advertisers
Pia Frey Address users as individuals
Jamie Mottram From pageviews to t-shirts
Sally Lehrman Trust comes first
Corey Ford The empire strikes back
Cindy Royal Your journalism curriculum is obsolete
Joyce Barnathan It will be harder to bury the news
Andrew Ramsammy The year ownership mattered
Jessica Parker Gilbert Design connects storytelling and strategy
Edward Roussel Eyes, ears, and brains
Rodney Gibbs Tech workers turn to journalism
Errin Haines At the ballot, it’s time to count black women
Luke O'Neil The end is already here
Dheerja Kaur Fun with subscription products
Sydette Harry Listen to your corner and watch for the hook
Niketa Patel Live journalism comes of age
Frédéric Filloux External forces
Matt Boggie The intellectual equivalent of the Dead Sea
Lanre Akinola Making noise is not a strategy
Ruth Palmer Risks will grow for news subjects — especially minorities
Michelle Ferrier The year of the great reckoning
Raju Narisetti Mirror, mirror on the wall
Julia Beizer A longer view on the pivot
Matt Carlson Attacks on the press will get worse
Monique Judge Letting black women tell their own stories
Amy King Let’s amplify visual voice
David Skok Finding an information-life balance
Nushin Rashidian Publishers seek ad dollar alternatives
Brian Lam Sketchy ethics around product reviews
Emma Carew Grovum Newsroom culture becomes a priority
Ernst-Jan Pfauth Publishing less to give readers more
Bill Keller A growing turn to philanthropy