Friday, September 22, 2017

Publishers look beyond Facebook, Google for revenues

A deal with the devil.

A new study by the World Association of Newspapers and News Publishers (WAN-IFRA) confirms what I have suspected for a long time: when publishers rely on Facebook for distribution, they are making a deal with the devil.

"Reality Check: Making Money with Facebook" was based on a survey of an "expert group" of 150 publishers. On average, Facebook was contributing only 7% of their revenues in spite of the fact that much of the publishers' content was being consumed on that platform.

And Facebook is stingy when it comes to sharing revenue with publishers, compared with Google, Spotify, Twitter, and others. It "seems to share proportionally less revenue with content creators than other platforms do."

Loss of branding power

The WAN-IFRA findings are also troubling because studies by Pew Research (see paragraph 4 of the study) and the Reuters Institute for the Study of Journalism (see p. 16 of the study) have shown that users think Facebook or Twitter produced news stories that were actually produced by a news organization. In other words, news organizations are losing their brand identities in social media.

If news organizations are going to have a chance of survival in the new digital economy, they will need to rely on the power of their brands  as trusted sources to persuade people to pay for their content.

Thursday, September 7, 2017

'We interrupt this class for news of your ex-girlfriend'

As a professor, I often wonder what effect my class presentations are having on the minds of my students. Honestly, is it really possible for any human being to pay attention completely to a class for 45 minutes? Or does the mind wander?

While I am explaining the theory of market externalities, every media company in the world is fighting for the attention of those students. These companies are desperate to attract eyeballs for their content and their advertisers' messages.

They have developed ever more powerful tools to distract people from what they are doing and look at their smartphones. They use pings, vibrations, badges, flashing lights, lock-screen messages, and who knows what else.

What human being could pay attention to me when they receive a notification on their smartphone that their ex has commented on their new profile photo? Or that there is breaking news about the latest silly statements by a president? It's no contest.

Versión en español

The Notification Experiment

I wondered how this affected my students. So I did a simple survey in my Media Economics class at the University of Navarra. I asked the students to keep track of how many notifications they received from all of their apps and news sources during one 45-minute period.

Monday, August 14, 2017

Women are making their mark in digital news startups

Women are taking a leadership role in the development of digital journalism in Latin America, according to a new study of 100 startups.

The study, Inflection Point, by SembraMedia in partnership with Omidyar Network, offers many clues to achieving the elusive goal of sustainability for new digital media.

Click to enlarge.
One clue is that women have the skills and experience to lead the way: 62% of the 100 organizations in the study had at least one woman founder, and women represented 38% of the total founders of all the media (p. 41 in the PDF version).

Extensive interviews with the founders -- 25 each from Argentina, Brazil, Colombia, and Mexico -- produced data that clarified the elements of successful business models and showed the best places to invest resources and training.

"This finding suggests that women are taking advantage of the low barriers to entry in digital media startups to go around the glass ceilings of traditional media and build their own publishing companies," wrote the directors of the study, Janine Warner and Mijal Iastebner, who are also co-founders of SembraMedia. (Disclosure: I worked as an editor of the study.)

Versión en español


Friday, July 21, 2017

100 digital news startups in Latin America show paths to achieving sustainability


A new study of 100 digital news startups in Latin America by SembraMedia in partnership with Omidyar Network -- Inflection Point -- offers many clues to achieving the elusive goal of sustainability.

Extensive interviews with the founders -- 25 each from Argentina, Brazil, Colombia, and Mexico -- produced data that clarified the elements of successful business models and showed the best places to invest resources and training.

Janine Warner, co-founder of SembraMedia and an ICFJ Knight Fellow, directed the study, which was managed by her co-founder, Mijal Iastebner. (Disclosure: I participated in the study as an editor.) Among the insights:
  • You don't need a lot of money to get started. 71% of the media in this study had startup capital of less than $10,000, but a tenth of those now generate at least $500,000 in revenues (p. 8). 
  • Those that focus on business development do best. Those with at least one sales person reported median annual revenues of  $117,000; those with no sales staff had a median of $3,900 (p. 9).
  • Women are playing a key role in development of new digital media in a region where men traditionally have held almost exclusive control of the industry: 62% of the 100 organizations  had at least one woman founder, and women represented 38% of the total founders of all the media (p. 41).  
  • Differentiation is key. In terms of content, technology, distribution, or style, these media positioned themselves as offering something different from traditional media and independent of political or business interference. In some cases, they exposed the cozy relationships between big media, politicians, and business (p. 25). 
  • Even a small organization can have big impact nationally and internationally. Although these organizations had median staff size of 13 employees, 72% have had their stories picked up by national news media in their home countries and 66% by international media (graphic above).
Versión en español

Wednesday, June 28, 2017

Top reason globally for paying for news? Mobile access



Richard Fletcher of the Reuters Institute has produced an in-depth analysis of the top reasons people around the world gave for paying for news online.

The Digital News Report 2017 included interviews of more than 70,000 adults in 36 countries.

Fletcher observed that the most common reasons people gave for paying were they wanted access on their mobile devices (30%), they like to consume news from a range of sources (29%), or they were offered a good deal or package (23%).

My take on Fletcher's data: The message to digital news publishers should be clear: they need to make sure their content displays rapidly and adapts well to the small screen--responsive design. Also, they should be testing various prices and packages for online content to see which ones produce the best returns. 

Tuesday, June 20, 2017

When they trust media less, they're willing to pay more

Alfonso Vara-Miguel
A new study of internet users in Spain shows that those who trust "the media" less are more willing to pay for news online. 

The explanation for this counterintuitive behavior is that those distrustful folks "are willing to pay for those specific media that they trust", according to the researchers, Alfonso Vara-Miguel of the  Universidad de Navarra and Manuel Goyanes of the Universidad Carlos III of Madrid.  

(The full text of their article is in Spanish:  "The probability of paying for digital news in Spain," in El Profesional de la Información.)

In other words, trust and confidence have an economic value that media organizations can monetize


Manuel Goyanes
Getting people to pay

Media economists like to say that the Spanish are legendary cheapskates when it comes to paying for any form of media. But the researchers believe they have identified some of the market segments most likely to pay for news

They base their conclusions on the Digital news report 2016, which came from a survey of a representative sample of 2,100 Spanish adults, executed by YouGov and coordinated by the Reuters Institute for the Study of Journalism at Oxford University. The most relevant findings follow.

Wednesday, May 31, 2017

Why digital networks are ruling the world

For the last few years, the name Manuel Castells kept popping up in things I read about digital media, social networks, and mass communications. He is a Spanish sociologist who spent much of his career at UC Berkeley.

Recently I have been reading his "The Rise of the Network Society," the first of three volumes in a series "The Information Age." He wrote them two decades ago, but he seems to have predicted many of the trends we are living through now.

The free flow of money, information, and power through global networks means those networks, not nations, are the source of power, he wrote. Institutions, societies, and ethnic groups with rigid structures that cannot take advantage of these flows will be left behind.

He wrote a new preface for the 2010 edition, before the Arab Spring, before the Syrian civil war, before Brexit, before Trump. He pointed out that structural changes were taking place in society because large sections of the world's population were being exluded from the global networks that accumulate knowledge and wealth.

Highly educated elites from financial and technological centers were profiting from the flow of money and power, while the rest of the world was being left behind.