Two optimistic new media fund-raisings last week are a warning that daily newspapers must abandon their go-slow digital strategies or risk being shredded by a new wave of paid-for services.
In the US, the two-year-old The Athletic now has 100,000 subscribers (60% of them millennials) paying some $60 a year for sports content, and renewals are running at 90%. Subscribers get access to in-depth coverage of most major sports in the US and Canada. Under the slogan “Fall in love with the sports page again”, it concentrates on high-quality, low-volume insightful journalism (it has almost 300 staffers) backed by hundreds of enthusiastic reader-contributors.
It’s a timely reminder that Jessica Lessin’s approach with The Information (2-3 tech business stories daily for $500 subscribers) can work even on a more consumerist stage where there is seemingly quite enough content already. The Athletic incentivises its journalists to write content that will bring in more subscribers – and gets readers to rate everything they read. Now it’s raising $70m from top tech investors who are falling over themselves to predict a Netflix-like future for the service.
Across the Atlantic, James Harding a former editor-in-chief of News Corp’s The Times and the BBC has raised backing from some wealthy friends and crowd-funding to plan the 2019 launch of Tortoise Media. It will be a “slow” news service which will not cover every news story and will not attend press conferences, but will “take time to see the fuller picture, to make sense of the forces shaping our future, to investigate what’s unseen”.
Under the slogan “Slow Down, Wise Up”, Tortoise plans to offer three products: A Daily Edition on smartphones, with five key pieces, breaking down the most important issues of the day, in text and video; A daily editorial conference, the ThinkIn (sounds just a bit like the New York Times’ brilliant The Daily podcast); and a quarterly print magazine.
It almost doesn’t matter that Harding describes his new venture pretentiously as a cross between TED and The Economist or that UK commentators have drawn flimsy parallels with the US rich list who have been lining up to buy the traditional pillars of journalism. But these and other ventures (more in the US than elsewhere, so far) emphasise that the apparent collapse of newspaper journalism has much more to do with its broken business model than with some lack of interest from would-be readers – and investors.
The key to what will surely become an explosion of high-quality, targeted digital “news” services is that they are paid-for and will carry little or no advertising. Therein lies the challenge for traditional news brands. Most newspapers (notably the quality national dailies in the UK) still cannot quite see that their lost lamented advertising continues to impede reinvention of these still-powerful brands. They must adjust to a future based largely (if not wholly) on readership revenues from premium-priced specialist services. But it is their vain pursuit of cheaper and cheaper advertising that drives free and low-price circulations and the insistence on slavishly digitalising the printed newspaper ‘package’.
There are notable exceptions but innovation is being stifled by the general reluctance to create digital offerings that really are distinct from (and competitive with) the newspaper tradition. The result is that the these print-centric groups find themselves with strategies which: over-state the value to readers of their traditional news-led ‘package’; limit their appeal to new audiences – and simply invite competition from digital services which don’t have a legacy product to defend.
Almost without exception, the new-wave services underline the real requirement for specialist and exclusive content rather than the general news to which most daily newspapers remain so attached and which still account for such a large proportion of their costs. So, every time someone comes up with a digital service covering sport, politics, personal finance or foreign affairs, newspaper executives know they could compete if only they dare risk accelerating the revenue decline of their traditional ‘package’. But ‘disruption’ is all about deconstructing the consumer offer as it was with the attack on music ‘albums’, on bundled cable TV subscriptions, and on no-choice retail banking services.
Many consumers are demonstrably willing to pay for journalism. It’s just that they will pay only for what they actually want. There is growing evidence that deconstructing the newspaper ‘package’ can be sustainable. The New York Times now has 400,000 subscribers paying $6.95 monthly for its daily crossword puzzle – some 30% of the full subscription for the whole digital ‘newspaper’.
From recent reports that the newspaper now has 4m subscribers – 75% of them digital – you can surmise that the crossword (and also cooking) services really are helping to enhance the value of the whole New York Times subscription as well as attracting those who only want part of the package. Of the 203,000 of new digital subscribers gained by the NYT during July-September 2018, some 60,000 paid only for the company’s cooking and crosswords services. If ever there was a cue for daily newspapers everywhere to start unbundling their best content, surely the New York Times’ crossword is it.
In the UK, even now, no media is better placed than the national daily newspapers to provide really strong digital ‘verticals’ on a range of topics from politics to football. Hurry.