One of the big questions facing the journalism industry is whether the traditional brands have a future. An international panel of eight academic media industry experts mostly agreed that those brands can survive, as long as they change what they are doing, and fast.
This panel of eight was discussing the impact of global crises on news media during the annual International Media Management Academic Association (IMMAA) meeting, held virtually Nov. 27 and 28.
A lot of the panel discussion revolved around the viability of newspaper paywalls and new business models for quality journalism.
When asked about traditional news brands, Marcus Englert, an investor in digital media, said that many newspaper and TV brands are, in fact, weakening and falling behind because of the collapse of the advertising-based business model.
But many other traditional brands are “moving up the ladder” by accelerating their transition to digital production and distribution, Englert said. They are using the power and credibility of their brands to attract new users, develop new products, and distribute through new channels in the digital world.
Englert is optimistic about the future of quality journalism in Germany, his home country, and in the rest of Europe. More consumers have shown a willingness to pay for online news during the covid-19 crisis, and this is particularly true for those in the 25-34 age group.
Will paywalls save newspapers?
Audience members had several questions about paywalls: would this revenue replace what news organizations lost to advertising and would they fund the quality journalism of the future, they wanted to know.
Sean Branagan, a journalism technologist at Syracuse University, said traditional brands can’t count on revenues from digital subscriptions unless they are delivering a product that consumers truly value.
Many traditional brands have been arrogant in the way they treat news consumers, Branagan said. The publishers assume that they know what’s best for their audiences. They say, in effect, “Eat this, it’s good for you.”
A paywall won’t work for a traditional media organization that pays little attention to what the users want, he said. On the other hand, “If you align a digital subscription business model with a promise to serve customer needs, and you deliver on the promise, your odds of success are much, much higher.”
News media should instead focus on using technology creatively to deliver new kinds of products in new channels–TikTok-style short videos to reach younger audiences, for example, or robot-produced journalism to free up journalists to focus on producing quality rather than quantity.
Crises spawn innovation, new models
Nils Högsdal, professor at HDM University in Germany, said that quality journalism is being produced by many small digital startups that are filling gaps left by declining traditional brands.
We can expect more innovative digital media to emerge from this current economic crisis, he said. “Every crisis is an opportunity.”
The last two economic crises –the dotcom bubble of 2000 and the global financial crisis of 2008– spawned some of the most innovative digital media, particularly in the US, Högsdal pointed out. And many non-media businesses are, in effect, media companies. Red Bull, he said, is a media company that holds events and happens to sell an energy drink.
Luis Sangil, a news consultant, has tracked the development of paywalls by large news media brands in Spain. He said these brands have accelerated their transition to subscription-based business models as their advertising revenues plummeted because of covid-19.
The viability of these paywalls will depend on the ability of these news brands to understand the needs and tastes of their audiences, Sangil said. They will have to become much better at collecting and interpreting the data about their users.
Tobias Scholz, a professor and founder of the Esports Research Network, did not comment on journalism per se. However, what journalism organizations could learn from Esports is that today’s audience wants to be active, to participate, not to be just passive consumers.
Scholz pointed out that the Esports industry shows us a model of what our future societies will look like because the audiences are young, global, and digitally focused.
Covid-19 had a big impact on the industry, Scholz said, because the industry depends on huge arena competitions that drive ticket revenue and global participation.
Two classes of news consumers
Yuri Pogorely, CEO of Russia’s Interfax News Agency, is worried that market forces are dividing news consumers into two groups: the rich, who can afford to pay for quality news, and everyone else, who will get just some headlines with little context.
Paywalls have not worked well in Russia because people aren’t accustomed to paying for news. Quality news was subsidized by advertising, he said, “and that model has been destroyed.”
Ulrike Rohn, professor at Tallinn University in Estonia, echoed a similar worry about two news audiences, one of them well informed and one receiving just snippets of information. “What impact will this have on our democratic societies?” she asked.
“People have to know that there is something else available,” she said. Media literacy programs could play a critical role. In addition, news organizations need to make it easy for users to pay. One-click systems like those used in Estonia help people get the information they need with little friction.
Trust and credibility are key
In my comments, I emphasized that the potential of paywalls and other revenue streams depends on the credibility and trustworthiness of the brand. Credibility is an important value proposition and differentiator amid the current flood of misinformation, propaganda, and pure public relations on the internet.
My colleagues Mercedes Medina, who moderated the panel, and Alfonso Sanchez-Tabernero, rector of the Universidad de Navarra, collaborated on a paper that identified five common characteristics of 20 successful publishers of quality journalism in four regions of the world–Eastern Europe, Western Europe, Latin America, and the US.
We found that, whether they are big traditional brands or niche startups, the media brands that will be successful will have to deliver on the promise of serving the public interest and helping people deal with their everyday problems.
To be viable, news organizations need to focus on building loyalty and strong relationships with smaller audiences rather than massive audiences of passive, unengaged users.
The panel: academics and industry representatives
- Ulrike Rohn (Professor at Tallinn University, Estonia, President of EMMA)
- Tobias Scholz (Professor at University of Siegen, Germany)
- Nils Högsdal (Professor at HDM Stuttgart, Germany)
- Sean Branagan (Director of the Center for Digital Media Entrepreneurship at Syracuse University, US)
- (me) James Breiner (Assistant Professor at Universidad de Navarra, Spain)
- Yuri Pogorely (CEO, Interfax, Russian news agency)
- Luis Sangil (Director de Desarrollo en Ikaroa news and consulting, Spain)
- Marcus Englert (Chair management board Rocket Internet, managing director Atlantic Investment, partner Solon strategy consulting, Germany)