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Will AI erode media independence?

There always seems to be big media news during the week when hundreds of the world’s journalists and media executives gather at the International Journalism Festival in the historic city of Perugia, in central Italy. This year’s event was no different. 

First up was the announcement that BuzzFeed News was closing. Though not exactly a shock, it sent ripples around an event at which many former BuzzFeed journalists were speaking and attending. Many of the BuzzFeed diaspora are angry with founder-CEO Jonah Perretti for what they see as mismanagement of a Pulitzer Prize-winning newsroom. The list of mistakes is relatively long, including the failure to develop a business model that more closely tied output to revenue, and ill-fated attempts to chase the whims of platforms such as Facebook with moves such as the much mocked “pivot to video”.

The second big news event was the long-awaited disappearance of Twitter blue ticks for those who got them when they meant more than simply paying Elon Musk $8 a month. There was great fun letting journalists wandering around the town know that they were no longer “verified”, often met with a brief exclamation followed by a shrug and request for directions to the nearest bar. What the whole thing means for Twitter’s once central role in the online news ecosystem (if not as a traffic driver) is yet to fully shakeout, though the ensuing chaos when Musk decided to give big accounts back their ticks, and many made it clear they didn’t want them, provided further amusement. 

But, aside from the gossip and angst, the festival offered its usual mix of insightful panels and talks, including some with key takeaways for those trying to navigate the business of news. Here are some of the highlights:

Navigating the storm

The “What Next for the Business of News?” panel tackled the oncoming storms facing successful media businesses. As chair Rasmus Kleis Nielsen of the Reuters Institute put it, these aren’t just broad economic factors such as inflation or the cost of living crisis, it’s a battle for attention in a very crowded field. 

“A lot of publishers are struggling to convince people that their journalism is worth paying attention to,” he said. “Across the 46 markets that we surveyed, just 34% of respondents – all of whom are internet users – say that they visited a news site or news app in the last week. and, of course, it’s only after that that it might become possible to convince them to pay either a membership or a subscription or to sell advertising around their attention.”

Grappling with this problem is 15-year-old French news outlet MediaPart, which now has 220,000 paying subscribers contributing around 98% of its revenue. It has been profitable for 11 years in a row, and yet chief executive Cécile Sourd remains concerned about being able to retain readers and find news ones amid tough economic conditions.

“This model puts us in a huge dependence on our readers. So with the actual context, the very high inflation, the new ways of information, information through platforms, for example, news avoidance, news fatigue, etc, we’ve been wondering, and we still are wondering, if our model is sustainable over time.”

Retaining readers involves more than just good journalism, she said, but also a rigorous focus on product, as well as events, blogs and – at a time when they are going out of fashion in many organisations – engaging with user comments.

Gaining new readers is arguably even harder in the current climate, and much of MediaPart’s efforts involve free content. 

“We have free newsletters on specific topics. We also have free articles now and then. Sometimes the whole site goes free for one or two days. We have free videos and a few free podcasts, and we also let subscribers gift articles and free trial subscriptions to the people they know, so that maybe they can become subscribers.”

Also on the panel was Melissa Bell, co-founder of Vox Media, which operates titles old and new including New York Magazine, gaming site Polygon and the eponymous Vox, which has since its founding focused on “explainer journalism”. Her key takeaway was that, once a business knows its audience, it pays-off to rapidly diversify revenue in order to create longer term stability. 

“Every time we felt like we had gotten somewhere successful with a product, starting with just our simple sponsored content through advertising, we started to diversify our revenue streams,” she said. 

“So we moved into branded content quickly and we really felt like we understood how to do that. Then we moved into podcasting and podcast advertising. Then we started to look for partners that understood the subscription business. So we went out and started talking to New York magazine so they could bring in their skill set with subscriptions.” (The magazine was acquired by Vox Media in 2019).

“That led us to being able to quickly launch a contributions business for Vox. For, We realised in 2020 that there was a very big rush [to subscriptions] and we realised that our mission to help people understand the world meant that we didn’t want to put our work behind a paywall because we wanted everyone to access it. But, because we had the subscription business of New York magazine, we were able to quickly learn and convert that to a contributions business for Vox and start to diversify the portfolio even within our larger company.”

Maturing membership models

Membership schemes, once the newest media business model, have increasingly become mainstream, not just for not-for-profits but also commercial organisations such as The Guardian and Tortoise. Perugia offered a chance to hear from three trailblazing membership-based organisations. Germany’s Krautreporter, Swiss outlet Republik, and Denmark’s Zetland. 

With much of the industry increasingly seeing reader revenue as the most reliable future funding for quality news, their numbers – though not huge – are quite appealing: 

Krautreporter: 16,000 paying members. Profitable from the beginning. 96% of revenue comes from readers. 

Republik: 30,000 paying members. Employs around 30 or 40 full-time journalists. Almost all income is from readers. 

Zetland: 20,000 paying members. Broke-even after four years. 23 journalists, 45 staff in total. 85% of revenue is from readers. 

Ironically, one of the challenges for these publications is that they initially set themselves up in opposition to the traffic-chasing, ad-driven models that so many publishers are now trying to move away from, as Krautreporter CEO Leon Fryszer described: 

“When Kraut Reporter was launched, it was the pinnacle of ad-driven journalism online. We all remember the clickbait headlines and we remember what that did to the journalism. I think that was super unsatisfying to many people. That was the problem Kraut Rreporter basically launched into, with the claim that, I guess nobody ever said that, but it was quoted as, ‘journalism is broken and we’ll fix it’.”

Now that so many other media organisations are moving in a similar direction, the messaging has to be tweaked.

“For us, of course, that means our comparative advantage has changed… Our value proposition has been taken up by others in Germany and it’s a very dense media market.”

Of course, membership models are struggling with tough  economic conditions along with everyone else. However, their focus on building communities around a message, even if much of their journalism is paywalled, can open up interesting ways of convincing people to subscribe.

​​”We had a member campaign earlier this year that brought us 3,500 new paying members,” said Republik and head of community Richard Hoechner. “We built a slider where you could pick your price. There were some incentives, but it was a very simple thing. And we were really curious to see what the average price would be. We sold subscriptions from 5 Swiss francs to 500 Swiss francs. Some actually paid a lot for this promotion, they decided to pay more. And the highest paid price was exactly half of the normal price.” 

One of the most important takeaways from the membership panel came when the Zetland editor-in-chief was asked what was the most important thing for anyone launching a membership model: “My advice is take technology super, super seriously. Technology has to be a core part of the media. It’s not something that comes beyond, besides the product. 

You don’t have content and then you have technology. The product is technology and journalism. And I think we got that right from the beginning. We are just heavily investing in skilled digital developers. And then just take the business side super serious as well.”

It’s a key piece of advice for anyone hoping to make money directly from readers, whether it’s billed as subscriptions or membership.

Value in AI

Inevitably, one of the most talked about topics was AI, and one panel asked the very pressing question of whether the technology will give even more power to the big tech companies. Or not.

The most commonly voiced concerns about AI and media have revolved round accuracy, and issues such as Large Language Models like ChatGPT regurgitating work done by media organisations. But Uli Köppen, head of AI and the Automation Lab at the German public broadcaster Bayerischer Rundfunk, highlighted another area that media companies should be thinking about – “economic dependency”.

 “We have to make very conscious decisions about what kind of algorithms we are using and how. A very practical example is we are right now training an algorithm that helps us filter our user comments. This is something all the newsrooms do over the whole world, and you can use a lot of vendors for that. But you have to make it with algorithms that are trained with data. You have to make a very conscious decision that your data is training a foreign algorithm and this algorithm is becoming better and better with your data. 

“But if you want to change vendors – it’s called a vendor lock-in – It won’t be easy. We don’t only have this whole implementation stuff, we…also have to be of that. It’s our own data and we have to make a conscious decision about: are we training our own models or not? “

The demise of the platform-dependant BuzzFeed News and the toying of Twitter reminds us of the dangers of media being enslaved by the platforms. Will embracing AI simply mean that media companies will, once again, be at the mercy of Big Tech?