Old Media can avoid an untimely death by a 1,000 clicks if they realise that online ads do not pay.
You can’t teach an old dog new tricks. Or in the case of Old Media, you can’t teach the old juggernauts of reporting how to fight off their Web 2.0 New Media compatriots. A phrase that I admit, does not exactly roll off the tongue like its proverbial derivative. Though what it lacks in pith, such a statement makes up for with pressing importance. In an era of fake news and even faker politics, the job of the media to hold governments, businesses and everyone else to account has been derailed at a time when it is needed most.
The internet is the culprit in this. It has smashed its way through the newspaper industry with the 21st Century business model – online ads. This method of revenue generation favours those webpages that can entice the largest number of eyeballs, for the largest number of seconds. A measured piece of investigative journalism that is the result of months of work may get the same number of clicks as a piece of celebrity gossip or a listicle—the list form article that helped turn Buzzfeed into a billion dollar company.
Average print sales are down 10% year on year. This is in part because news and comment is free and only a dextral prod away. People now learn about news live on their smartphones, not by thumbing the pages of their favourite paper. This is an age where Facebook and Google are the New Media kingpins, sucking up 64% of all online advertising revenue. Facebook even encourages outlets to publish content directly through their platform via Instant Articles. Publishers can still put their own adverts on their content but it keeps users firmly rooted in the Facebook ecosystem. In the same way Facebook makes money from our social interactions, they now can make money from the pre-established relationship the media has with its audience.
In this brave new age of seemingly unlimited information, opinions and reaction outlets have chosen one of two ways to pull in revenues. Some have welcomed online ads with open arms, publishing their content for free in order to try and get a large enough slice of the online ad revenue pie. Others have avoided it, charging for their online content through subscriptions.
With the online ad model individual articles—rather than outlets—vie for people’s time. A single notable piece, be that broadsheet or tabloid-esque, no longer sells the rest of the newspaper but merely pays for itself. Readers can pick and choose what articles they exchange for their ad impression. Journalistic prose that is funded by online ads alone is to some extent self-employed. Additionally the internet has turned everyone into a published commentator, making professional opinionists seem less relevant than ever. Opinion pieces now come in in 140 character snippets on Twitter. Or as blog posts…
The Guardian is the standout Old Media example of an outlet that has fully committed to the online ad model. They invested heavily in web content, publishing all their content online for free in the hope that they could pull in enough visitors, and advertising revenue, to make such a radical approach sustainable. The idea was laudable and in the vain of traditional output. If sufficient, popular content was produced it could pull in enough ad revenue to sustain both its online endeavours and make up for declining print revenue. In effect, the popular stuff could pay for the boring stuff.
They officially took a “web first” approach in 2006—embracing everything digital and everything ads. From a business perspective, it failed. They made a loss of £69 million and made 250 redundancies in 2016. After slowly making their way through the Auto Trader cash pile, they have started to move to a quasi-subscription model called Guardian Members. All content is still free but those with a subscription get access to additional events and a premium, ad-free version of the mobile app. It is yet to be seen if this duel business model can help the outlet become sustainable.
On the other hand The Times, The Telegraph, The Financial Times, The New York Times and The Economist are all outlets who all have some form of pay-wall. Rather than giving away their content in exchange for an ad-impression, people have to subscribe for a monthly fee in order to access it. Such a business model has its downsides. Far less people will view the content as opposed to if it was solely funded by ads. Pay-walls are also never completely impenetrable. This is particularly so if they offer small amounts of content for free to entice new subscribers, as many of the named outlets do.
Though such negative aspects are somewhat moot compared to the benefits a pay wall brings. Outlets can concentrate on producing the content they always have done, in comparable quantities, rather than feeling any need to chase clicks. The quality of their content can also stay the same. Listicles and click-bait headlines are only needed when you are competing against a mass of other free content; when you have subscriber base that pays for its content in cash rather than ad impressions, quality matters. The importance of these points cannot be underplayed. Not only do journalists get to keep their jobs but they can continue to fully scrutinise matters of public interest.
Ads do not pay. Subscriptions do. This is the real trick the Old Media needs to learn if they still want to exist in the Web 2.0 age. For the sake of journalists as well the wider public interest, let’s hope they catch on.