IP10: What might the future of news look like?
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Last week saw a couple of notable shifts in the news environment. The first, and most commented on, was the rapid ejection of Tucker Carlson from his perch at Fox News. The second, even more important development was the announcement that Buzzfeed News was shutting down. For years, it seemed that Buzzfeed had cracked the puzzle of how to get news right online. Other news organisations rushed to mimic the Buzfeed News approach, with listicles becoming the order of the day. And Buzzfeed produced some genuinely world class journalism. On this side of the pond, brilliant journalists such as Jim Waterson, Emily Ashton and Alex Wickham all worked for Buzzfeed (the latter two now work for Bloomberg). The site rightly won a Pulitzer for its coverage of the Xinjiang issue. And, as this must-read piece for The Atlantic pointed out, possibly more than anything else, Buzzfeed represented the internet of the 2010s.
But that era is definitively over. It turns out that Buzzfeed represented a detour, rather than being a Netflix for News?
What does the future of news look like? Are we already seeing signs of it in the rise of newsletters and the growth of “direct to site” models like Bloomberg News and Business Insider. And how might AI change things again? As we set out in the chart below, there are a number of routes that the news industry might take?
If the news industry embraces innovation, personalisation and a good quality user experience, it might well reach a tailored model of news or a local and diverse model of news (or likely a mix of the two). The age of AI could be an age of innovation and vibrancy for the news industry. Ignoring the user experience and falling behind innovation, on the other hand, could see the news industry decline.
But before visioning where news might be going, it’s worth reflecting on where news has come from.
The news journey since the advent of the internet
The internet took away the cash cow for publishers and increased competition for content
News publishing has often found it difficult to pay for itself. In the pre internet age, newspapers carried classified advertising that made up between a quarter and a half of publisher’s revenue, with this being used to cross-subsidise news reporting. Adverts for cars, houses, even dating (or “lonely hearts”) dominated newspaper space, with certain days often being dedicated to specific forms of advertising.
And this advertising was paid for. But then sites such as Craigslist, Gumtree, Right Move and Property Guru came along, where people could advertise (often for free) and to a much wider audience. This killed the classified cash cow for many newspapers and ad revenue fell off a cliff.
At the same time, newspapers lost their niche in specialist content, as sites dedicated to local sport, cookery, fashion and travel surpassed the coverage that newspapers were able to give them. In short, newspapers lost out because of increased competition for both advertising, content and attention.
Reach increased, but monetising this reach became more difficult
The internet meant that the potential audience or “reach” for quality journalism became much higher. British sites, like the Mail, Guardian and the Sun are now reaching global audiences. There were over 1 billion visits to the BBC website in March alone. And a journalist for a regional newspaper can see their work reach a far bigger audience than was the case in a pre internet age, particularly with the amplification impact of social media. On the flip side, the desire to pay for news content has seldom been lower. The circulation of US daily newspapers, for example, has been in freefall for decades.
The Reuters Digital News Report also found that the proliferation of free content has made some consumers reluctant to pay for news. Some news sites have successfully built subscription models. The New York Times has almost 10 million paying subscribers and has effectively built a new bundle with acquisitions like Wordle and The Athletic. The Times now has over 400,000 subscribers and has effectively also become a lifestyle brand. The Guardian reached over a million subscriptions two years ago, partially fuelled by its values-based model. Regional papers have found building a subscription model to be difficult.
Trust has declined and polarisation has increased
Trust in news has declined over recent years, but citizens still display greater levels of trust where there is an “anchor” public institution such as the BBC.
The growth of misinformation and the rise of polarisation has meant that trust in news has plunged in countries such as the United States, where all media organs have a perceived partisan lean (even if this perception is unfair).
Arguably, the growth of subscription models might also accelerate polarisation as people who subscribe for political reasons might also put pressure on their chosen paper to remain “politically pure”. Subscriptions might help some papers monetise, but they might also produce political echo chambers.
Long read publications have surged
Whilst many news publishers have struggled since the advent of the internet, many of the “long-read” publications have been enjoying a boom. The New Statesman, London Review of Books, Spectator, Atlantic, New York Review of Books and other “long read” publications are enjoying close to record subscriber numbers (partially fuelled by the global reach benefit) and specialist publications such as the Economist are enjoying healthy subscription numbers. The Athletic have also successfully experienced the desire for greater depth in the sporting arena.
User experience can still be poor
Whilst some news sites are slick and thoroughly user friendly, others seem like remnants of a previous generation of the web. A preponderance of spammy content, pop up ads, random quizzes and other “innovations” can make some sites close to unusable, making it far less likely that consumers will make a habit of returning to the site and even less likely that they will be prepared to contribute financially.
Paper closures, asset stripping and news deserts.
An inevitable consequence of the decline in newspaper advertising spend in recent decades has been that local and regional newspapers have closed down in large number. In the UK, there has been a net loss of 271 print titles between 2005 and 2022. In the United States, a similar rate of closures has led to a growth in so-called “news deserts” - counties that do not have a local newspaper.
Even in towns that still have a local newspaper, the kind of “public interest journalism” that was once cross-subsidised by classifieds - such as court reporting and scrutiny of local democracy - has fallen victim to the need to trim. In the United States many once proud local newspapers have occasionally fallen victim to asset stripping and hollowing out of newsrooms.
Online news has been through a number of waves. Some have proven more enduring than others
The attempt to revive journalism has seen several potential panaceas. Some have been more successful than others:
Simply replicating a physical paper online was the inevitable response of some newspapers to the shift online. This wasn’t made to last.
Many papers then looked to replace classified advertising with online advertising anywhere on the site, resulting in a frenzy of pop ups and poor user experiences.
A rush towards subscription models. As noted above, this has worked for some newspapers but not others. According to Reuters, “The growth in the number of people who pay for online news may be leveling off, with a large proportion of digital subscriptions going to a few national brands.”
Newspapers became obsessed with reaching audiences via social media. This might have included SEO headlines that seem comical in hindsight (talking about age, marital status and net worth). The change in the Facebook algorithm, the decline of blue ticks on Twitter and the fact that TikTok and Instagram aren’t designed for easy linkability means that monetisation via social media probably isn’t the silver bullet that it might have seemed a few years ago.
In all of these cases, news organisations reorienting their business model and going “all in” on various trends might have reduced agility and ability to pivot when circumstances changed.
But we’re now reaching another new phase for news online. What are the factors we should be considering? And what can news organisations learn from over two decades of online news?
The Future Of News?
The quality of user experience will matter more than ever
The creation of superb and seamless user experiences has been a feature of the most successful businesses of the internet age. Larry Page and Sergey Brin’s dictum that you should “focus on the user and all else will follow” is as true now as it was two decades ago. But it’s a truth that is sometimes forgotten by news organisations who have failed to put themselves in the shoes of the information consumer. As noted above, news sites will be less able to rely on social media and other sources of traffic directing users to their stories. Building a compelling user experience will become more and more important. Publishers will have to rely on their own web properties to deliver repeat visits, rather than building business models around social media partners. As the likes of Politico and Bloomberg have shown, this means excellent sites, but also polished and timely newsletters and audio products.
In a “post clickbait age”, news sites might have to become masters at creating their own traffic. Newsletters as a means of traffic creation and building of user loyalty are increasingly important. This might also mean having the agility to be able to create products for emerging and important sources. For example, The News Movement have proven to be masters at providing monetisable content that is easily digestible on Tik Tok and other short form media sources.
AI and the power of the wires could mean that journalism is more about analysis than original reporting
The very nature of journalism could change in the AI age. AI and technological progress means that the cost of producing high quality content is decreasing and the nature of journalism is also changing. This is likely to involve a shift from “origin journalism” to “analysis journalism”. A report for the Journalism AI project at the LSE found that “newsgathering” would be one of the most important uses of AI within newsrooms. The “wires”, such as Associated Press and the Press Association will become more and more important at providing the raw ingredients of news, whilst next generation journalists will provide analysis and more in depth reporting. The concept of generative AI as provision of a first draft that provides key facts to be built on by journalists might also be a means to revive public interest journalism at a local level, where journalists might not be able to spend hours in a courtroom or council chamber, but will be able to make use of the raw information provides by AI and the wires.
AI could mean more personalisation and more aggregation.
AI could introduce a profound difference to how individuals interact with news and publishers should consider how to stay ahead of this shift. Feedly and Artifact (the brainchild of the Instagram co-founders) are two examples of products that use AI to curate, tailor and personalise story feeds based on an individual’s interests. As The Verge describes Artifact:
The app opens to a feed of popular articles chosen from a curated list of publishers ranging from leading news organizations like The New York Times to small-scale blogs about niche topics. Tap on articles that interest you, and Artifact will serve you similar posts and stories in the future, just as watching videos on TikTok’s For You page tunes its algorithm over time.
This seems just the beginning of a process that will use AI to personalise news around a user’s preferences and tastes and emphasise the importance of news publishers being able to better understand their users and the experience that will keep them on site. Could this potentially change news in the way that Spotify and streaming changed music? Either way, it seems inevitable that building in a more tailored and personalised experience will be an essential element of news in the age of AI.
AI could bring a whole new dimension to monetisation
As noted in IP9, the way that news publishers and others right’s holders approach the new wave of generative AI could be crucial to its future development. Although Open AI argue that “scraping” of news sites represents “fair use”, publishers are making clear that they aim to engage in the argument around monetisation aggressively and at an early stage. As Ben Evans argued in his excellent newsletter last week:
LLMs might change all of the algebra again. When newspapers claim today that they should be paid if they show up in Google Search results, this is preposterous, but if I ask ChatGPT to summarise today’s news and it gives me a ten minute summary of what’s in today’s newspapers without linking to them, then the newspapers’ point suddenly because entirely real, which is why Reddit and Stack Overflow have raised their hands this week. People have compared LLMs to everything from GUIs to the iPhone to electricity, but one thing they certainly do is change the link model of the internet in a way that hasn’t happened since social or search, or indeed more.
Publishers mustn’t, of course, use revenue share or monetisation as a crutch that ignores the importance of creating a high quality user experience.
Being genuinely local will matter to make local news a success
Although local news as a whole has declined in recent years, some publishers, such as Village Media in Canada have shown that there can be a strong “product-market fit” in towns that have a strong local sense of identity where publishers deliver a product that drives local engagement and delivers real value to local businesses. Success stories such as the VTDigger, The Colorado Sun, The Bristol Cable and The Enfield Gazette have all shown the desire remains for quality, non-aligned local news. Local newspapers that can build on the stronger sense of community that emerged from Covid and build a strong product for both users and advertisers might well be carving out a strong position.
Subscriptions are important, but not a panacea. Quality advertising might also matter
As noted above, subscriptions represent an important part of the potential mix for the future of news, but they aren’t the only club in the news golfer’s bag and might not be appropriate for all publications. Ensuring a high quality user experience will surely be essential for successful publishers in the coming decades and part of this is likely to be developing an advertising experience that is non-intrusive, seamless and does deliver monetisation. As Semafor noted last week, TV streaming has pushed against the limits of a subscription only model and Netflix’s Q1 earnings showed that the streaming giant is already benefiting from a model that includes ads. This might well also be the way forward for news publishing is subscriptions meet their natural limit.
Innovation and being able to remain agile and pivot will be crucial. News organisations must not get stuck
The last few decades have shown the problem of some news organisations “betting the bank” on one business model change. As technological change becomes more rapid and user habits become more in flux, it’s more important than ever that publishers remain agile and able to innovate and shift as consumer habits change and technology advances. This necessitates the use of foresight and scenarios to stay ahead of these shifts, rather than trying to catch up.
Are legacy publishers sitting on an archive shaped goldmine?
Legacy publishers are sitting on decades or even centuries of content. If used correctly, this could be a monetisation goldmine. The surge in popular interest is history is symbolised by Tom Holland and Dominic Sandbrook’s superb “Rest Is History” podcast consistently topping the podcast charts. Interest in genealogy has also surged in recent years. Long-running local businesses are often keen to illustrate their roots in the local community. Newspaper archives could be curated in a much more effective way to build upon this boom in interest in history and bring history to life for many people, but archives remain untapped routes to monetisation for many legacy publishers.
This newsletter is MUCH LONGER THAN I EXPECTED! But the most important takeaway for me is that there could well be room for optimism about the future of news, as long as the news industry makes the most of emerging technology, creates a compelling user experience and remains agile enough to stay ahead of technological change and shifts in consumer habits.