20200
P
1
20100
R  E
2
2070
D   I   C
3
2050
T   I   O   N
4
2040
S   F   O   R   J
5
2030
O  U  R  N  A  L
6
2020
I  S  M  2  0  2  0
7

The business we want, not the business we had

“My hope for 2020 is that more and more publishers from around the world will look at the growing number of proofs of the concept that digital journalism can be based on a sustainable digital business model.”

It’s hard to let go. But in 2020, I hope more of the news industry will let go of the business we had in the past and focus on developing the businesses we want in the future.

As predicted, 2019 was a grim year for the business of news, but we also have a growing number of different examples from different countries demonstrating that it’s possible to build different kinds of sustainable business around different kinds of digital journalism. This includes both legacy titles and newer, digital-born entrants.

Take a few legacy titles:

In France, Le Monde expects to end 2019 with more than 250,000 paying digital subscribers, many more subscribers than the print paper had in the 1990s. CEO Louis Dreyfus sees a “virtuous circle” in the years ahead, as the margin on each new additional digital subscriber is considerable and over time will allow new investments.

In Sweden, Dagens Nyheter continues to grow — in just four years, the number of digital subscribers has grown from virtually zero to surpass the number of print subscribers. The total number of paying subscribers is the highest since the early 2000s, and editor-in-chief Peter Wolodarski has committed to use the new digital revenue for in-depth journalistic efforts.

In neighboring Norway, the success of the tabloid VG shows that upmarket elite-oriented titles aren’t the only ones who can thrive online. 52 percent of online news users in Norway say they have used the site in the last week, and combine significant digital advertising revenues based on its scale and reach with paid-for clubs around different issues like weight loss.

Even more importantly, AMedia’s ability to attract digital subscribers to its many local titles across Norway, in part on the basis of the insight that better representation of women and younger people in stories seems to correlate with higher readership among those same demographics, suggests that there’s hope also for a local news business under even greater pressure than national titles.

Some newer digital-born entrants are succeeding too:

In France, the subscription-based digital-born MediaPart has achieved 12 years of unbroken growth in both revenue and subscribers, fueled by (and fueling) hard-hitting investigative reporting in a country that has arguably had too little of that in the past.

Another newer French entrant, Brut, is pursuing a fundamentally different strategy focused on social media reach and video content. It reports that its domestic operations are profitable after just three years, and it’s investing into expansions into the United States, India, and beyond.

Meanwhile, a range of digital-born sites with more mixed models, like El Diario in Spain, and those based on membership, like Zetland in Denmark, are also reporting growth and sustainable finances.

And again, while local is tough, there a green shoots for digital-born local news too, as sites like The Lincolnite in northeast England continue to expand. Furthermore, the success of sites like Slovakia’s Dennik N suggest examples of success is not limited to rich countries.

All of these different legacy and digital-born titles are reporting growth in their (very different) digital businesses, and, on that basis, they’re able to invest in their different kinds of digital journalism. All of them are, in their different ways, editorial idealists as well as hard-nosed commercial realists, focusing on their own strategy and revenue streams.

None of them are begging for hand-outs from politicians, relying on corporate charity from platforms or other large companies, or basing their journalism on philanthropic support. Nor will you find them wishing for the internet to go away and the “good old times” to come back (times that those who print things for profit are probably the main ones to miss).

These success stories take nothing away from the continued, inexorable decline of offline legacy news businesses, and none of them suggest that the new, far more competitive, online environment is anything but a difficult, tough, and uncertain place to operate.

But their success is there for all to see and demonstrates that a growing number of titles are developing different sustainable models for the for-profit provision of independent, professional, digital journalism — titles that ultimately matter a lot more than the much less replicable growth of a small number of essentially unique market leaders with global reach, like The New York Times, The Washington Post, and The Wall Street Journal from the United States, and the Financial Times, The Guardian, and the Daily Mail from the United Kingdom — impressive as these are in different ways.

There is nothing easy or certain about the business of digital news. Almost all the titles mentioned will have smaller revenues and lower profit margins than dominant printed newspapers did at their commercial peak.

But that was then, and this is now.

Past commercial glories won’t fund our future editorial mission. Given how intense the competition is for attention, for advertising, and for the cash that media users who have ample access to free alternatives are willing to pay for truly distinct, extraordinary, and valuable journalism, survival is success, and sustained growth and profitability is a real achievement.

And all these titles are a hell of a lot more encouraging than the asset-stripping, cost-cutting, consolidation, and continued reliance on print products in terminal decline that we see in much of the legacy industry. (Or than the clickbait and desperate “pivots” to the latest fad that some of the more rudderless digital-born sites resort to.)

I expect global revenues in the news industry to continue to decline for at least another decade as profitable print products die out with their readers, broadcast is disrupted, and digital growth, real as it is, in most cases will not deliver the same revenues or profit margins.

Print/broadcast revenues and profits reflected news media’s dominant position in an offline media environment where audiences had low choice and publishers had high market power over advertisers. Digital revenues and profits will reflect news media’s much more marginal position in an online media environment where audiences have high choice and publishers have little market power over advertisers.

This is a much tougher market. But it is not an impossible one for those who offer distinct, valuable journalism and maintain a lean and nimble operation.

It’s clear that a much smaller share of total advertising expenditures will go to news publishers in the future, as more and more dollars move online and mostly goes to those who can offer advertisers low prices, wide reach, and precise targeting. (Of the top 10 sellers of digital advertising globally, nine are platforms and one a large media-telecommunications conglomerate, Verizon.) Still, a few percent of a very large digital advertising pie is still a lot of money, even if it’s a lot less than what legacy publishers made in the past.

Similarly, contrary to past assertions that “the paywall is history”, even in a world where most online news remain free at the point of consumption and almost all broadcasters, most digital-born news media, and many newspapers still operate free, ad-supported online news models, and a world where more and more subscription services compete for household’s media budgets, a significant minority of people are willing to pay for online news. Five or ten percent of the online population subscribing to one or at most two sources of digital news will not provide the topline revenues of print at its commercial peak. But with the right systems in place, it will provide a stable and lucrative source of revenue for those who do journalism worth paying for.

And while overall news industry revenues are likely to decline for years to come in many countries (though Norway seem to have turned a corner in 2017/2018 where digital growth in the newspaper industry for the first time outstripped print decline), online, publishers focused on news will be able to invest much more in editorial, perhaps closer to 40 or 50 percent than the 20 percent or less of revenues that print newspapers historically invested in editorial.

So, a tougher market, but not impossible, and a challenging environment that we have to find ways through if we want independent professional journalism to have the resources to continue its important work. It’s on us to find these ways; no one else will.

Thus my hope for 2020 is that more and more publishers from around the world will look at the growing number of proofs of the concept that digital journalism can be based on a sustainable digital business model.

Many trying to make the transition from offline to online will not succeed. Often, those trying to build something new will fail. Some of those who succeed will still fall short of their hopes and aspirations. Very few will generate anything like the revenues or profits we saw in the past. But more and more are finding their own ways forward, on that basis they will be able to do important, independent, journalistic work, and we should recognize and celebrate that. (There may more lessons to learn in France about the future of the business of news than in the United States.)

For all its many shortcomings, the for-profit business of news is the most important source of investment in independent professional journalism — it often provides some diversity of news provision, and in many countries, economic sustainability is a precondition for editorial independence from proprietors and political patrons. So we need this business to succeed. Now that we know that it can, the hard process of letting go of what we had and focusing on what we want for the future begins.

Rasmus Kleis Nielsen is director of the Reuters Institute for the Study of Journalism and professor of political communication at the University of Oxford.

It’s hard to let go. But in 2020, I hope more of the news industry will let go of the business we had in the past and focus on developing the businesses we want in the future.

As predicted, 2019 was a grim year for the business of news, but we also have a growing number of different examples from different countries demonstrating that it’s possible to build different kinds of sustainable business around different kinds of digital journalism. This includes both legacy titles and newer, digital-born entrants.

Take a few legacy titles:

In France, Le Monde expects to end 2019 with more than 250,000 paying digital subscribers, many more subscribers than the print paper had in the 1990s. CEO Louis Dreyfus sees a “virtuous circle” in the years ahead, as the margin on each new additional digital subscriber is considerable and over time will allow new investments.

In Sweden, Dagens Nyheter continues to grow — in just four years, the number of digital subscribers has grown from virtually zero to surpass the number of print subscribers. The total number of paying subscribers is the highest since the early 2000s, and editor-in-chief Peter Wolodarski has committed to use the new digital revenue for in-depth journalistic efforts.

In neighboring Norway, the success of the tabloid VG shows that upmarket elite-oriented titles aren’t the only ones who can thrive online. 52 percent of online news users in Norway say they have used the site in the last week, and combine significant digital advertising revenues based on its scale and reach with paid-for clubs around different issues like weight loss.

Even more importantly, AMedia’s ability to attract digital subscribers to its many local titles across Norway, in part on the basis of the insight that better representation of women and younger people in stories seems to correlate with higher readership among those same demographics, suggests that there’s hope also for a local news business under even greater pressure than national titles.

Some newer digital-born entrants are succeeding too:

In France, the subscription-based digital-born MediaPart has achieved 12 years of unbroken growth in both revenue and subscribers, fueled by (and fueling) hard-hitting investigative reporting in a country that has arguably had too little of that in the past.

Another newer French entrant, Brut, is pursuing a fundamentally different strategy focused on social media reach and video content. It reports that its domestic operations are profitable after just three years, and it’s investing into expansions into the United States, India, and beyond.

Meanwhile, a range of digital-born sites with more mixed models, like El Diario in Spain, and those based on membership, like Zetland in Denmark, are also reporting growth and sustainable finances.

And again, while local is tough, there a green shoots for digital-born local news too, as sites like The Lincolnite in northeast England continue to expand. Furthermore, the success of sites like Slovakia’s Dennik N suggest examples of success is not limited to rich countries.

All of these different legacy and digital-born titles are reporting growth in their (very different) digital businesses, and, on that basis, they’re able to invest in their different kinds of digital journalism. All of them are, in their different ways, editorial idealists as well as hard-nosed commercial realists, focusing on their own strategy and revenue streams.

None of them are begging for hand-outs from politicians, relying on corporate charity from platforms or other large companies, or basing their journalism on philanthropic support. Nor will you find them wishing for the internet to go away and the “good old times” to come back (times that those who print things for profit are probably the main ones to miss).

These success stories take nothing away from the continued, inexorable decline of offline legacy news businesses, and none of them suggest that the new, far more competitive, online environment is anything but a difficult, tough, and uncertain place to operate.

But their success is there for all to see and demonstrates that a growing number of titles are developing different sustainable models for the for-profit provision of independent, professional, digital journalism — titles that ultimately matter a lot more than the much less replicable growth of a small number of essentially unique market leaders with global reach, like The New York Times, The Washington Post, and The Wall Street Journal from the United States, and the Financial Times, The Guardian, and the Daily Mail from the United Kingdom — impressive as these are in different ways.

There is nothing easy or certain about the business of digital news. Almost all the titles mentioned will have smaller revenues and lower profit margins than dominant printed newspapers did at their commercial peak.

But that was then, and this is now.

Past commercial glories won’t fund our future editorial mission. Given how intense the competition is for attention, for advertising, and for the cash that media users who have ample access to free alternatives are willing to pay for truly distinct, extraordinary, and valuable journalism, survival is success, and sustained growth and profitability is a real achievement.

And all these titles are a hell of a lot more encouraging than the asset-stripping, cost-cutting, consolidation, and continued reliance on print products in terminal decline that we see in much of the legacy industry. (Or than the clickbait and desperate “pivots” to the latest fad that some of the more rudderless digital-born sites resort to.)

I expect global revenues in the news industry to continue to decline for at least another decade as profitable print products die out with their readers, broadcast is disrupted, and digital growth, real as it is, in most cases will not deliver the same revenues or profit margins.

Print/broadcast revenues and profits reflected news media’s dominant position in an offline media environment where audiences had low choice and publishers had high market power over advertisers. Digital revenues and profits will reflect news media’s much more marginal position in an online media environment where audiences have high choice and publishers have little market power over advertisers.

This is a much tougher market. But it is not an impossible one for those who offer distinct, valuable journalism and maintain a lean and nimble operation.

It’s clear that a much smaller share of total advertising expenditures will go to news publishers in the future, as more and more dollars move online and mostly goes to those who can offer advertisers low prices, wide reach, and precise targeting. (Of the top 10 sellers of digital advertising globally, nine are platforms and one a large media-telecommunications conglomerate, Verizon.) Still, a few percent of a very large digital advertising pie is still a lot of money, even if it’s a lot less than what legacy publishers made in the past.

Similarly, contrary to past assertions that “the paywall is history”, even in a world where most online news remain free at the point of consumption and almost all broadcasters, most digital-born news media, and many newspapers still operate free, ad-supported online news models, and a world where more and more subscription services compete for household’s media budgets, a significant minority of people are willing to pay for online news. Five or ten percent of the online population subscribing to one or at most two sources of digital news will not provide the topline revenues of print at its commercial peak. But with the right systems in place, it will provide a stable and lucrative source of revenue for those who do journalism worth paying for.

And while overall news industry revenues are likely to decline for years to come in many countries (though Norway seem to have turned a corner in 2017/2018 where digital growth in the newspaper industry for the first time outstripped print decline), online, publishers focused on news will be able to invest much more in editorial, perhaps closer to 40 or 50 percent than the 20 percent or less of revenues that print newspapers historically invested in editorial.

So, a tougher market, but not impossible, and a challenging environment that we have to find ways through if we want independent professional journalism to have the resources to continue its important work. It’s on us to find these ways; no one else will.

Thus my hope for 2020 is that more and more publishers from around the world will look at the growing number of proofs of the concept that digital journalism can be based on a sustainable digital business model.

Many trying to make the transition from offline to online will not succeed. Often, those trying to build something new will fail. Some of those who succeed will still fall short of their hopes and aspirations. Very few will generate anything like the revenues or profits we saw in the past. But more and more are finding their own ways forward, on that basis they will be able to do important, independent, journalistic work, and we should recognize and celebrate that. (There may more lessons to learn in France about the future of the business of news than in the United States.)

For all its many shortcomings, the for-profit business of news is the most important source of investment in independent professional journalism — it often provides some diversity of news provision, and in many countries, economic sustainability is a precondition for editorial independence from proprietors and political patrons. So we need this business to succeed. Now that we know that it can, the hard process of letting go of what we had and focusing on what we want for the future begins.

Rasmus Kleis Nielsen is director of the Reuters Institute for the Study of Journalism and professor of political communication at the University of Oxford.

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