No Way Out? The News Media’s #Digital Conundrum

“The news media let the genie of the bottle, now their trying to put it back inside”. This is how a friend of mine captured the news media’s current digital predicament. While snappy, is it really true? For sure, traditional news media is in dire straits. Subscription revenues dropping, ad sales moving to digital competitors, cutbacks mean fewer pages in your daily and fewer reporters in the news room. The news organisations are trying to fight back with no lack of innovation, “native” advertising formats, dieting clubs, tailored events and so forth. Some hope for mecenats to save quality journalism: Amazon-founder Jeff Bezos now owns the Washington Post, Facebook co-founder Chris Hughes last year acquired The New Republic. No small irony that these publicist icons are now in the hands of Silicon Valley-billionaires. How did the news media end up here?

Cutting the Tie to Distribution

When the web was young and “information wants to be free” was still a credo that a lot of people believed in, daily newspapers had two main sources of income: sales (subscriptions and newsstands) and advertising. A rule of thumb was that sales paid for the print and distribution, while adverts paid for the content. By this logic, it looked like a great idea to publish all the content for free online, never mind the distribution and its zero sum game of cost and revenue. With free access, more readers would come and thus more advertising revenue. No shortage of new media experts sang this gospel and many publications joined the chorus. The sacrifice was severing the direct tie of the delivery to the content. No print paper hitting the door mat early in the morning. No financial exchange taking place at the newsstands on the way from work. (I realise it was a gradual process, such things as these don’t happen overnight – in fact you can still subscribe to the daily twenty years into this process.) This was the first part of the perfect storm.

Ads Lost

The next part of the news business to be challenged was the advertising. Relying mainly on a single source of revenue obviously makes a business vulnerable. With the freenomics of the web, advertising became the #1 business model not only for news media, but for pretty much all the internet services. Without the competitive advantage of paper delivery, newspapers saw themselves compete for the limited ad budgets with native digital business which could offer better deals in many cases. Concepts such as “buying traffic” and “eCPM” arrived. While the news media may have still had better quality content to offer, it was dethroned as the main advertising channel for many categories. Classified ads went to online services like Craigslist.com, Subito.it etc, typically broken down by country, but just as typically with one dominant player for classifieds per market because with the law of the networks, why would you need more than one? Job ads went online, car ads, insurance ads, the list goes on. Not only specialized niche online services, just as much general services like search and later video, social media and who­-knows-what? competed for the ad revenue. The other half of the news business revenue began to erode.

Competition for Content

With sales and ad revenue going away, the news media was left with its quality content, but that too was challenged by native digital competitors. The Huffington Post is only one example of online publications that have been accused of “lifting” content from traditional news media. More spectacular was the case in Spain last December, where a new law required Google News (and similar services) to pay fees to the copyright owner when showing “snippets” of news stories from other publications. If there was a need to demonstrate how dependent the news services have become on Google as a source for traffic, if the case had to be made that the power balance is skewed heavily in favor of the global big data companies, if an example was required to illustrate the different logics of the valued pluralism in traditional media and the monoculture of cloud services, hardly any could be more convincing than what followed suit. Google News simply shut down its service in Spain, the news publications found themselves losing up to 25% of visits to their web pages and with no option but to waive their rights under the new law.

Three digital strikes brought the news media to its knees: first the loss of sales, second the loss of ad revenue and third the lost integrity of the content. Did the news business do it to itself? Probably to some extent, at least in the first step – to publish content for free online – looks ill-advised in retrospect. But the rest was outside the influence of the news organisations – it was the result of the actions of other parties.

Enter Mobile

Another blow came with smartphones and the mobile web, which allowed readers to access online content from anywhere and not only the desktop. That is of course good news in many ways, giving flexibility to users, new opportunities for businesses, new offers and new forms of culture. The news media has in deed embraced mobile in many ways, for a while it even looked like apps would save its revenues. But it also meant that another exclusive domain for the traditional newspapers – the commute. Instead of reading a paid newspaper on the metro or bus, commuters access the same content for free on their smartphones.

The news media has an added dimension of difficulty, freedom of expression being the fundament of its existence. While it is true that unauthorized distribution of the expressions of others has nothing to do with freedom of speech, that copyright is the other fundament of free speech, that not all data that travels in digital networks can be regarded as expressions – the ethos of news is to never go anywhere that even remotely smells of any restriction of freedom of expression. An honourable position, but in this case perhaps contributing to the difficulties.

The Case for Independent Media

It is safe to make the case for the importance of independent media in modern democracies. The public’s access to information, the scrutiny of power, the formation of public opinion are all central tasks of independent media. Without knocking the new sources of information that have arrived with the digital media, it is difficult to imagine democratic elections without independent media. Consider for example the media’s position in authoritarian regimes, it is no coincidence that the dictators of Belarus or North Korea win more than 90% of votes in elections and the fact that the media is loyal to the regime.

But democracy is not the only irrefutable value of the independent media. Many of the challenges that new digital media struggle with: editorial responsibility, threats, hate speech or cyber-bullying, user comment, lack of fact verification and thus the dissemination of myths have all been addressed by the traditional media and solutions have been developed over the years in the form of press ethics. Simple things like responsible editors, signed articles, verifying facts with an independent source, giving each side of a story the opportunity to comment, rules on revealing identities of crime suspects, protection of sources, and some system for dealing with abuse of the rules of press ethics. This continuously evolving setup has developed over at least two centuries, with the purpose of fair reporting and free public opinion formation. It takes time to learn, reporters go to journalism school and work with more experienced editors to understand the system. It is the topic of continuous debate within the journalist trade. All in all, it is a fundamental contribution to modern democracies and gives important clues as to how to deal with those same problems in the online public sphere, which suffers from the lack of fair reporting and often breeds myths and filter bubbles. That is the dark side of democratized digital media, but the exact same problem is why traditional media have worked it out in the form of media ethics. It would be well-advised to put some of that insight to use in online media before it’s too late.

Alles verloeren?

In this post, I have painted a dark picture of the situation for news media online. Is there no hope? Of course there is. The news media is still around, both in traditional distribution forms and new ones. The arrival of Silicon Valley-mecenats as media owners is surely not the first time in history where industrialists or vested interests have bought or started news businesses. And some of them may have the best intentions, in which case the resources can help journalism. New business- and funding models have seen the light and will continue to grow. And for sure there is a case to be made for the benefits of democratized media. But let’s appreciate the values of traditional media and protect them. There should be room enough for the bloggers, the mecenats and the classic media. The threat is the loss of skilled reporters as news organisations cut back, the loss of revenue for independent quality media and the monolithic big data companies that concentrate power and revenue to a very small number of people. That last bit is not only for the news media to worry about.

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