Media Watch

News media need new business models for survival


The social media revolution has returned much of humanity to a world where “spreading the news,” is the function of “word-of-mouth-“type networks, confronting tradition news networks with serious survival challenges.

At The Intelligence Bulletin (IB), we have also become acutely aware of these challenges and is in the process of developing strategies to try to deal with these multi-faceted and complicated challenges involved in the development of a digitally connected world, the so-called “internet of things,” the Fourth Industrial Revolution (FIR), artificial intelligence (AI), and the exponential growth of e-commerce.

We will inform our readers about these plans and strategies in the next week or two, once some talks and discussions with other parties involved are concluded.

In our strategy we will invite our readers to use their own social network to also earn some passive income for themselves. But more about that further on.

Some background

 Just short of a year ago we reported: “Social media is increasingly influencing the way we consume news and has already produced an epidemic of misinformation, hoaxes and hate-mongering that threatens the vision of an interconnected global village that facilitate cooperation and dialogue.” This was the conclusion of a study by Lyn Snodgrass of the Nelson Mandela Metropolitan University.

She wrote: “The internet held the promise of an interconnected global village that facilitated cooperation and dialogue through authentic information sharing. But the interaction between our inherent human tendencies and social media platforms has produced an epidemic of misinformation, hoaxes and hate-mongering that threatens this vision.”

Research by the Reuters Institute for the Study of Journalism in 26 countries shows that more than half of those sampled use social media as a news source.

“This trend comes at a cost as social media is not known for its accuracy, or the advancement of challenging and diverse perspectives. Filter bubbles, created through personalised and algorithmic news feeds, reinforce this,” wrote Snodgrass.

In this environment, the term ‘post-truth’ emerged as the Oxford Dictionary international word of 2016.

Our mission

It is in this void of uncontextualised news, that the IB has missioned itself, striving to identify emerging trends from the avalanche of information and to contextualise it. The challenge on this front is reflected in research on how social media is increasingly influencing the way people consume news.

The traditional media outlets, like newspapers, and even television news broadcasters, are challenged by a burgeoning ‘cottage industry’ of websites that invent fake stories. Analysis by Buzzfeed of the last US election pointed to the prevalence of fake and hyper-partisan content on Facebook pages and websites.

Media business model in trouble

But, it is not the quality of news content that is under threat. Tradition media outlet’s very survival is under pressure.

During 2017 the in-depth online publication, Get Wired Magazine, ran series of articles under the theme The News in Crisis. In a report in March its editor, Jason Tanz, wrote: “The news media is in trouble. The advertising-driven business model is on the brink of collapse. Trust in the press is at an all-time low. And now an even larger existential crisis has joined those two long-brewing concerns.

In a post-fact era of fake news and filter bubbles, in which audiences cherry-pick the information and sources that match their own biases and dismiss the rest, the news media seems to have lost its power to shape public opinion.”

Some 30 years ago, in 1988, Edward Herman and Noam Chomsky published a book under the title Manufacturing Consent, in which they concluded that in the US, not unlike to South Africa, the media sector and thus news distribution, was dominated by a small group of media corporations.

The business model relied on mobilising national-brand advertisers, who were averse to subjects that were controversial or, to their mind, distasteful. Minority voices were crowed out.

However, the media environment has since dramatically changed. In the connected world of the internet, created by affordable digital devices and social media platforms, not only the big national-brand advertisers, but also the local shop or service provider can now enter into direct conversation with their target markets.

The seeds of this trend were already sown in the early days of the internet, but became a tsunami in recent years on the back of platforms like Facebook, Twitter, LinkedIn and on smartphone ‘apps’ like WhatsApp.

Both advertising- and political campaigns now make increasing use of the combination of public relation (PR) firms and data mining companies to get their messages across to the broader public and/or niche markets.

Traditionally the editor had the final say about articles got published, and how prominently. However, in words of Tanz: “Today, readers have usurped that role. An editor can publish a story, but if nobody shares it, it might as well never have been written.”

This trend has had a devastating effect on journalism as a career.  The number of Americans whose job it is to “inform the public about news and events … for newspapers, magazines, websites, television, and radio” has decreased by nearly 10% over the past decade. Newspaper companies in the US today employ 271 000 fewer people than they did in 1990

Adapt or die

For the traditional media it has become a question of ‘adapt or die’ over the last decade. The first step was to take their publications online. However, while digital advertising for the New York Times initially rose by more than $100m, it could not compensate for the loss of $600m in print advertising income.

Many publications then went the route of selling online subscription, but that also did not make the cut.

Fact is, for the reader who wants a broader exposure to news coverage by subscribing to say three or four publications it becomes an expensive exercise with a combined monthly cost of $40 (approaching R500) per month.

Some independent and specialised niche publications have resorted to a “welfare model,” asking for donations from their readers.

Even the respected United Kingdom-based The Guardian newspaper in December 2017 embarked on an appeal to readers to financially support the publication. Appealing for a “supporters fee” of $6.99 (almost R90) per month, it states: “Like many other media organisations, the Guardian is operating in an incredibly challenging financial climate. Our advertising revenues are falling fast. We have huge numbers of readers, and we are increasingly reliant upon their financial support.”

Our strategy

At the IB we are planning to follow a different route. We will, amongst other, invite our readers to, with us, join another trend of the increasingly connected word – the fast-growing e-commerce sector. In the process they will also get opportunities to earn some ongoing passive income from products on offer.

The IB, and the readers joining us, will effectively, by simply passing on messages to their contacts, become part of the sales teams of e-commerce platforms, retailers, service providers, and products offered on our website under prior negotiated commission agreements.

With e-commerce/online shopping having been predicted by a PayPal and Ipos survey to reach R53bn in 2017 – R16bn up from 2016’s R37bn – we are in the process of securing an opportunity for us, and our readers, to join and earn from this trend, which holds the promise of much more growth to come.

by Piet Coetzer

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