Why journalists should care more about media business models

“We’ve abdicated completely the role of strategy,” said one masthead editor. “We just don’t do strategy. The newsroom is really being dragged behind the galloping horse of the business side.”

–       p. 72, The New York Times Innovation Report

Increased collaboration, done right, does not present any threat to our values of journalistic independence.

–       p. 61, The New York Times Innovation Report

Too few journalists care about media business models. Every week a senior journalist or editor tells me: it’s not my job to care, I trust our commercial teams, I just want to get on and do my words. The business of media, it seems, is none of their business.

Editorial culture’s aversion to commercial affairs results from fallacious thinking about Chinese walls: Since editorial content must be protected from advertisers’ influence, journalists must protect themselves from anything commercial. Sometimes it also results from misplaced snobbery: commercial activities may enable my good work, but they are also, somehow, dirty. 

This isn’t a new problem, but as more business models emerge, and the number of revenue streams at any one business expands, it has become more important than ever for journalists to care about, understand and influence commercial strategy.

Yet there’s been little culture change across the industry.

At TheMediaBriefing’s Digital Media Strategies conference in March, which focuses primarily on evolving business models, only a small handful of the 450 attendees had editorial roles.

Here’s why this needs to change. 

Lessons from BuzzFeed 

The most powerful recent example of a media business emerging with a new business model is BuzzFeed. It provides a rare case of an organisation’s journalism and business model evolving side by side. In order to understand just how far-reaching the effects of an organisation’s business model can be for its journalism then, it is useful to understand how its model evolved and what it means for its journalism today.

Ask many journalists today about BuzzFeed and they’ll either heap it with praise or shed upon it bitter scorn. They’ll debate whether listicles are clickbait or where to draw the line in repurposing others’ content. They’ll also discuss whether native advertising is a threat to editorial integrity and reader trust. Ask them about the business model itself and they’ll go quiet.

If you read the slides that BuzzFeed founder and CEO Jonah Peretti created for investors 2008, you’ll learn that BuzzFeed at the time only had two editors, and had ambitions to “dramatically grow traffic without hiring” more. BuzzFeed was a mix of editorial, algorithmic and user-generated content. The editors’ jobs were to “use technology to find and publish buzz”.

 

To make money, BuzzFeed would provide a free platform for marketers to publish their own content and get “addicted to [their] metrics”; they would then upsell premium services, including “advertising as content”, “distributed promotion”, “premium tools” and “trend targeting”.

As we know, BuzzFeed eventually began hiring plenty of editorial talent and creating and distributing its own content for brands.

So why the change of heart?

BuzzFeed found that if it combined its platform and its understanding of how content spreads with top editorial talent, it would be able to reach eye-poppingly huge audiences. It saw that advertisers were struggling to deliver high quality, sharable content themselves, so it could package up the above and sell it as a service. 

BuzzFeed makes the vast majority of its revenue through native advertising. As a business, it functions much like an advertising agency. It creates branded content to enable marketers to reach large, relevant audiences. It owns publishing technology, teams of creators and wonderful tools, like the recently launched Pound, which provides a unique analysis of how well the content performs. The teams that create this content are separate from the myriad journalists and editors that BuzzFeed hires.

So the question remains: why hire any journalists at all? 

BuzzFeed journalists serve multiple functions. But the most important of these is as proof of concept. The big successes of BuzzFeed’s media operation show prospective advertisers what BuzzFeed is capable of.

enhanced-4640-1429900793-7.png
Analysis and visualization by Adam Kelleher using their Pound tool

Using individual pieces of content and impressive traffic and sharing figures, it shows how through technology, knowledge and editorial approach it can outdo the best in winning maximum reach and engagement online.

Through a broad palette of content types, it also demonstrates the different demographics it can reach and moods it can evoke. It can continually test what works and improve it. And it can build a reliable brand, strong enough that people will still click through even if they see a post is sponsored.

It is a very different approach to editorial and advertising than what we were previously used to.

Lessons from elsewhere 

The model described above is very different from that of a digital media business which relies on banner ads. If your business is built on banners, you want your journalists to get as many eyeballs to the page as possible so that more banners are seen adjacent and more revenue is generated.

If your business is built on native ads, you want your journalists’ work to demonstrate how good you are at what you do, so you can say to advertisers: we can do all this for you.

buzzfeed-humblebrag.png

BuzzFeed humblebrag

Your business may be built on a mix of newsstand sales, print circulation, print ads, digital subscriptions, banners, native ads, video, ecommerce, live events and more. All of these things impact the incentives behind how much and what kind of journalism it invests in. Only for a publication or site where readers pay for content does one need to invest in content worth paying for, for example.

Some of the most business model-apathetic journalists I’ve met have been from publications such as The Times, the Financial Times and The New York Times.

At The Times, the hard paywall places an emphasis on digital content worth paying for, but also limits the reach of all its content. The metered model at the Financial Times is constantly evolving, and some advertising is now sold on a ‘cost-per-hour’ basis. Although subtle, these changes will always impact the business’ overall approach to journalism. The New York Times, whose metered model is also constantly evolving, was reported in February to have made $18.2m so far from native ads.

These developments in ways both big and small have a rippling effect on the jobs of every editorial staffer. If you don’t understand them, you may find the rug suddenly pulled from under you. If you do understand them, you have an opportunity to help shape them and nurture them so that the business remains aligned with values you support.

In the past year The Sun, Johnston Press, Local World, The Independent and others have each launched sites which superficially ape BuzzFeed’s editorial style but take nothing from its business model. Journalists at Trinity Mirror Midlands, meanwhile, have been given personal traffic targets to drive digital growth. Earlier this month, The Sun softened its paywall. If ever there was a good time to start caring, it’s now.

the-sun-png-1.PNG

Perhaps more than anywhere else the effects of editorial ignorance of business needs is felt worst at the level of product development. With the constant evolution of social platforms and device usage, media companies need to develop innovative and profitable products to survive. These products will struggle to succeed unless both editorial and commercial objectives are taken seriously, and this won’t happen unless editorial and commercial staff take each other seriously. Approached intelligently, editorial-commercial collaboration can have profound effects, as illustrated by how The Economist’s Espresso App came to be. 

It is also becoming increasingly important for editorial and commercial staff to collaborate more closely on their relationships with technology companies. 

Technology platforms are playing an increasingly sophisticated role in the distribution of content. The partnerships being established now are laying the foundations for the digital content supply chain of the future.

Media organisations must ensure both that they protect their editorial voice and independence and create worthwhile data- and revenue-share opportunities. This comes not just from editorial and commercial staff being aligned internally on their objectives, but also from them being able to coordinate a coherent, effective discussion with the platforms.

Why it matters 

No-one has found a silver-bullet business model for journalism today. The revenue models everywhere are evolving all the time.

If you’re a journalist and your business is looking at investing in native advertising, you should make it your business to know about this, and perhaps even to influence it, because it may tangibly affect the purpose of your job, as well as its very existence. The same is true for paywalls, membership schemes, live events and any number of other initiatives that the business is considering. 

Likewise, if you’re a journalist and you want to understand and readily navigate changes in your role or organisation’s objectives, you should look to understand the broader business challenges the organisation is navigating.

Finally, if you’re a journalist and you’re looking to progress your career, not only will understanding media business issues allow you to dodge bullets and find better opportunities, but you’ll also become a much more attractive candidate for your knowledge and interest.

Alan Rusbridger, in his parting statement as editor-in-chief of The Guardian, said “Twenty years ago, no one asked a newspaper editor about their business model. Now it’s one of the first questions.”

So it should be.

By |2015-06-30T07:00:00+00:00June 30th, 2015|Analysis|Comments Off on Why journalists should care more about media business models

About the Author: