Users will own the media: how journalism is evolving

Alfredo Triviño has worked largely behind the scenes on some of the biggest digital media projects for some of the biggest brands in the world. But you might not have heard of him.

Alfredo Triviño: users will own the media, in every sense

He spent seven years in senior management roles at News Corp., ultimately as director of innovation, where he worked on development of a pay model for digital journalism and on long-term editorial and commercial growth strategies. (He is a 1999 graduate of the University of Navarra School of Communication, where I teach.)

He was invited to give the closing keynote address last week to the annual conference of the Spanish Journalism Society (SEP, Sociedad Española de Periodística). He ruminated casually about trends he sees in the worlds of digital journalism and digital commerce, mixing some English terminology into his Spanish presentation. Among the shifts he sees:

A shift from journalism and commerce to journalism vs. commerce. That is, the two will operate in separate worlds. Journalism will depend on the support of user communities rather than advertising. Brands will create their own digital media rather than publishing their messages on TV, radio, and in print.

Versión en español

A shift from paid editorial (subscriptions) to shared ownership. By this Triviño meant that groups of users will form around a topic of shared interest--local news of a community, a social issue, or a shared cultural interest, for example. They will be active participants rather than passive consumers. They will interact with the journalists, suggest topics to editors, share their knowledge, create content, contribute money, and support the mission of the publication because they feel they are part of it and it speaks for them. "This is ours; we own it".

How Talking Points Memo has converted from an ad model to paid subscriptions

Readers now supply more than half the site's revenue.

Josh Marshall started out as a political blogger in 2000, made a business of it in 2003, won a George Polk Award, and has managed to stay independent through all the wild swings of the digital pendulum.

So his reflections on how to transition from an advertising business model to paid subscriptions have a certain authority.

He talked about the evolving business model of his site, Talking Points Memo, in a 47-minute podcast with Digiday Editor Brian Morrissey. Among Marshall's observations that are relevant to other would-be news entrepreneurs:

• Small, independent news sites cannot rely on scale to drive revenue. They need a strong relationship with their users. Many digital media organizations that have massive audiences will not be able to make the transition to paid subscriptions because they don't have that relationship, he believes.

• Many of the 26,000 paid subscribers to TPM, which are now supplying just over half the site's revenue, pay because they support the mission of the publication, which "draws on readers' knowledge to break stories." The sales pitch for the $50 Prime product is that you get "warm, fuzzy feelings from supporting independent journalism".

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.

Slovakia is latest to prove subscription model online

Home page of Dennik N

Contrary to all the predictions about the public's unwillingness to pay for news when it is freely available online, more publishers of high-quality, in-depth reporting are making money.

The latest example comes from Slovakia, as recounted by Rob Sharp in Nieman Lab. The editors of a popular national newspaper there discovered that a news organization tainted by corruption accusations was about to buy a significant stake in their paper.

Versión en español

Anticipating restrictions on their work, the editor, Matus Kostolny, and a team of his lieutenants decided to start an independent online news publication, Dennik N.

As Sharp describes:

The outlet attracted €1 million of private investment and advanced subscriptions of around €300,000. They launched their daily website in January 2015, and a printed paper shortly afterward. Now, just over two years later, they are among the top five quality newspaper websites in Slovakia. In a country of 5.4 million people, the paper has 23,000 paying digital subscribers, the most nationally, and 110,000 registered readers.

Readers pay for digital news when you sell the value

NEW YORK -- The big mystery in the newspaper industry has been how to get digital readers to pay for a product they have been getting free for years.

Denise Warren

The industry has struggled because subscription operations were always loss leaders that didn't pay for themselves. Executives had no idea how to run a profitable subscription operation and have been learning how to do it for the first time, said Denise Warren, who played a major role in the New York Times's transition to paid digital subscriptions.

She spoke May 3 to an audience of professors and industry representatives at the World Media Economics and Management Conference held at Fordham University.

Many publishers make the mistake of marketing their digital products on the basis of price and discounts, Warren said, when they should be promoting the unique value proposition of news and information that readers cannot get anywhere else.

Paywalls and micropayments start to gain traction

The loss of advertising and the complications of public funding are forcing digital publishers to look for ways to persuade the public to pay.

Surveys and actual market behavior show that a small percentage of digital users will pay, depending on the country, the media brand, payment systems, and technology platforms. For some publishers, that could be the difference between thriving and merely surviving.

(Versión en español)

The amounts some would be willing to pay are in the chart below, from Reuters Institute’s 2015 online survey of 24,000 users in 12 countries.

From Newman et al., Reuters Institute Digital News Report 2015 (p. 65). 

Click on chart to enlarge.