Journalism needs a new business model and it's based on trust

10/08/2017 12:31 pm ET Updated Oct 10, 2017
Bench Accounting

Everybody knows online journalism has a problem. In the era of populism, the lack of trust in newspapers and broadcasting news is all too apparent. People are just not sure anymore if what they see on TV or read on Facebook is actually true.

Why is that? Why not trust journalism? Aren't reporters and news people still more independent than most other profession? What has changed?

Well, everything. Since it's forced to make money almost exclusively from ads, journalism has not been its former self. It's become too fast and too noisy. It looks like all the other stuff on the web – including the ads. It is made for clicks, not for users. As a product, journalism sucks.

A plethora of books have been published on these questions in the last year, such as J.D. Vance’s “Hillbilly Elegy”, George Packer’s “The Unwinding” and John B. Judis’ “The Populist Explosion”; and a few more library loads are being written right now. A lot of them are intelligent and insightful, but one piece of the diagnosis is missing in almost all of them: the business model of news has played a huge part in the deterioration of trust in digital media.

Depending on clicks and page views to make the online ad revenue grow took journalism down the clickbait road. And instead of creating readable content, many outlets became PowerPoints that users had to fight against to actually find value within articles. On top, social media distribution didn’t make things better, since emotional content and sensational headlines get the engagement needed for achieving reach.

And while journalists are probably just as independent as in the past, their style has worn off. The language of news reports, features and interviews misses the conversational style of the internet. To many readers and users, it just sounds arrogant, it lacks the human voice that they get from their friends in Facebook, their acquaintances on Twitter, even their Airbnb contact that they are willing to share basically everything with. Why trust a TV character or the guy shouting too much in the opinion columns?

In such a landscape, truth, analysis and debate remain out of sight. After years of disconnect and erosion, the relationship between the public and the press needs a reset. Users patience is reaching a breaking point, the credibility of mainstream media is at stake and only the ones who are able to create a formula that brings together trust and dollars will survive.

What could journalism change to regain trust? In my opinion, several things, all of which would be radical steps, so don't hold your breath.

First and foremost, media outlets need to get independent from ads to survive. If digital newspapers change their incentives, their product will change with them. Only if users are your most important customers will you focus on their needs. And only then they will be able to trust you. So the business model of news needs to be subscriptions, subscriptions only.

While a few decades back the Holy Grail of subscriptions seemed like a pipe dream, the fog is disappearing. Slowly, readers seem to be ready to pay, at least in countries like the US, where already 53% of adults pay for news, and the growth within young readers is the fastest; or Germany, where in the last 15 years the percentage of Internet users willing to pay for online content rose until 73%. And still, for many outlets it looks like mission impossible to convert their free readers into paying customers.

Source: <a rel="nofollow" href="http://digitalnewsreport.org/" target="_blank">Reuters Institute Digital News Report 2017</a>
Source:  <a rel="nofollow" href="https://www.americanpressinstitute.org/publications/reports/survey-research/paying-for-news/

Not only the stats suggest that the tide is changing, though. For the first time in decades, big newspapers can boast growing numbers where it matters. The New York Times counts with 2.3M paying subscribers, The Wall Street Journal with 1.7M subscribers and The Washington Post recently announced passing the mark of 1M subscriptions.

Source: <a rel="nofollow" href="http://mip.umh.es/blog/2017/10/03/modelos-de-pago-periodismo-casos-exito" target="_blank">UMH
Source: UMH

These incoming dollars allow these outlets to defy the dictatorship of clicks and pageviews. But how are they converting casual readers into engaged and paying supporters? Mostly by investing in prestigious journalists, craftsmanship, technology, making quality prevail over quantity and moreover, speed. Being the first is not anymore what makes the difference, but collecting all the facts, stories within the story and adding the value of having a voice that counts.

Which brings me to the second point: in order to regain trust from readers, journalism needs to slow down. Publish less. Get a perspective. There is too much content in the world. Journalism as a product need to focus on excellence. It's role is not to add noise, but to add meaning to the never-ending discourse of society with itself. Imagine journalism as a person. Why would you trust a chatty, gossiping, hyperventilating guy on the street? You would trust someone who's well educated, well spoken, someone who thinks before they talk. Journalism needs to become someone like that again.

And third: journalism needs to understand we don’t live anymore in a world where information goes only top down, but embrace the reality of a conversation society we’re all just beginning to grasp. Media needs to listen, answer, learn and become an open community. Journalists need to become better at talking with their audiences. It's an open secret that someone among the audience knows more about a topic than the reporter. Why not ask them before publishing a story? Humility leads to trust.

While legacy media is struggling with a compromise between reach and subscriptions, there are a growing number of outlets who have learned their lessons already. Advertising is dying and the only way to make journalism a sustainable business is to generate trust and produce stories that will make people subscribe to your publication. Individual journalists and small teams are starting to use platforms like Steady to convert their audience into paying subscribers. And as their investor, I believe they are one top answer to tackle a problem that from my point of view will determine the world we live in the future. Therefore, I’m betting on them.

If you change the business model of journalism, you change journalism. Users who care are quality leads. As a logical next step, they will start to pay. Or as Washington Post’s owner Jeff Bezos says:

"When you're writing, be riveting, be right, and ask people to pay. They will pay." - Jeff Bezos

If journalists suddenly cared about audiences they will produce better stories that will lead to better conversions. Better stories mean high engagement, which equals better retention. At that point, you'll have a much more reliable relationship, which means lower churn. That way, people will start trusting journalism again.

Benjamin Rohé started his first company at the age of 17. He co-founded a public company amongst other startups and has worked in the tech, renewable energy and digital space since 1997. Now he is an active business angel and former partner in an European VC fund, and also the Managing Director of the German Tech Entrepreneurship Center (GTEC) in Berlin. You can find him on Twitter as @benjaminr

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