Reuters Institute: Audiences are less willing to pay for news created with AI

Continuing to riff on the demand for news, there were a couple of blockbuster bits of research that came out in the past week. Rasmus Kleis Nielsen and Dr. Richard Fletcher with help from the pollsters at YouGov investigated the awareness of generative AI technologies and attitudes about their use in journalism (PDF) in six countries. Argentina, Denmark, France, Japan, the UK, and the USA. YouGov polled some 2000 people in each country. Unsurprisingly, young people were more aware of them than older people, but a surprising finding was the gulf between awareness and frequent use. “(F)requent use of ChatGPT is rare, with just 1% using it on a daily basis in Japan, rising to 2% in France and the UK, and 7% in the USA,” the study found. As I wrote in Pugpig’s Media Bulletin, Dr. Fletcher told the BBC there is a “‘mismatch’ between the ‘hype’ around AI and the ‘public interest’ in it”.

However, for news media leaders, I think there is one major takeaway from the report: Only about 5% of those polled in the survey used genAI to get the latest news. genAI and use is far higher in the US than in other countries. Still only 10% of Americans used genAI for seeking out news, and in Denmark and the UK that figure drops to 2%. Morever, the UK also had the highest percentage of people (30%) who hadn’t heard of any of the 14 genAI tools that researchers asked about.

Given the low levels of trust in news media in the US, it was surprising Americans were more trusting of journalists (30%) to use the technology responsibly than other countries. Contrast that to the UK, where only 12% of those polled strongly or somewhat trust journalists to use it in a responsible manner.

The research also had some warnings for journalism leaders in how they approach genAI. People in the study were polled about whether they thought journalism was worth more or less depending on whether it was produced entirely by human journalists or with genAI and human oversight, 41% said they would pay less. This could put pressure on the reader revenue strategies that so many publishers are pursuing.

The research also highlights that publishers have work to do to prove the value of genAI to audiences. The researchers said:

Essentially our data suggest that the public, at this stage, primarily think that the use of AI in news production will help publishers by cutting costs, but identify few, if any, ways in which they expect it to help them – and several key areas where many expect news made with AI to be worse.

A shift in local news consumption

Of course, working for publishing app builder Pugpig, Chicago news consumers have shifted from reading newspapers and watching local TV stations to using their smart phones, according to research from Northwestern University’s Medill School of Journalism, Media, Integrated Marketing Communications. They surveyed more than 1000 people across the Chicago region from the western suburbs to suburbs in northeastern Indiana. While the decline of print is well known, local TV had still held its own. But the study found that 62% of those polled used their smartphones all the time or often versus 52% who said that they got their news via local TV. That number was only 13% when it came to newspapers.

More worrying for local news outlets is that only 19% of respondents said that had paid or donated money to support local journalism, and half of those polled said that no one should pay for local news. That is why I’ve said that we will need to develop a number of different models to support local news based on a number of factors including the size and economic base of the community. However, I think that this is a glass half-full situation. There is a lot of opportunity between the 19% who currently pay and the 50% who will never pay.

A few other highlights:

  • Consumers would rather watch (44%) than read (25%) or listen to (10%) news.

  • But local TV isn’t benefitting from this desire to watch news, at least amongst younger generations. For audiences under 44, only 22% watch TV for their news. It is most likely that they are getting their news from social media, with 40% of 18-29 year-olds and 36% of 30-44 year-olds checking social media multiple times a day for news.

  • While smartphones are now the primary platform for news, this isn’t benefitting news outlets directly as much as it is benefitting Google. Search engines (which means Google) has the largest audience that checks it for news multiple times a day. However, local TV stations still outpace search when it comes to those who check at least once a day and those who use a given platform multiple times a week.

More than the data about the platforms audiences use, the research is golddust when it comes to understanding why local audiences consume news. Topping the list? “(Local news) helps me to save or manage my money”, which was a reason given by 60% of those who responded. “It helps me stay healthy” came in second at 52%, and the next three responses were in the mid-30% range. Of the top five, number 3 “It helps me decide where I stand on things” was the only one that I would say most traditional print journalists would see as hard news. “It helps me feel connected to my community came in at 15%, and “It helps me take action to address issues I care about” was important to only 12% of respondents. Only 10% said local journalism “helps me stay informed to be a better citizen”. Honestly, my priorities as a local newspaper reporter and editor were very different than these responses. I can see how these responses are much more in line with local TV news in the US than local public radio or newspaper coverage. What I would have liked to have seen is an age breakdown on these responses. Is this a generational thing like platform choice, or is this a broader societal shift? Or do we need to rethink our local news agenda? It all raised a lot of questions for me.

One last thing I’ll highlight is that there was a disconnect between audiences and the industry in terms of awareness of the parlous state of journalism businesses. More than half, 54% said that news organisations were doing “somewhat well”, while an additional 17% thought they were doing “very well”.

And now onto the links for the week. While much has been made of the shift of young audiences to TikTok and Instagram, a longer-term trend has been the shift from open social networks to messaging platforms such as Telegram or WhatsApp. The Reuters Institute reported on this trend in its 2018 Digital News report. Khalil Cassimally, head of audience insights for The Conversation, shared a summary of a panel he moderated at WAN-IFRA’s World News Congress. Click through for a very handy guide of the differences between WhatsApp Communities and Channels.

In my previous job as the director of digital products and platforms at a regional US public media group, I said that our digital strategy involved building loyalty and habit amongst our audiences that led to membership. On that theme, The New York Times has built a product portfolio beyond news to ensure that they become a part of their audiences daily habits. The bundle is a re-imagination of the newspaper for the digital age - yes, news and sport but also reviews and a big yes to games and puzzles.

Harvard Business Review sees AI as “opening an age of hyper-personalisation”, mining their archive for value and even providing a career development bot for their subscribers.

Another example of media rebuilding their own engagement spaces. CBC/Radio-Canada (Canada), ZDF (Germany), RTBF (Belgium), and SRG SSR (Switzerland) are working with New Public have been hosting workshops and “build-a-thons”. What they heard was: “Public discourse, with the existing platforms at our disposal, is hard everywhere — and never more fragile. Our public media institutions need new ways to lead our civic discourse.”

They have now developed more than 100 prototypes “to enable civic discourse for many voices and shape conversational cultures”. Ok, this has my attention.

Speaking of interesting, nonprofit NEWSWELL at Arizona State University has partnered with the Times of San Diego. Looking at this story, NEWSWELL is looking to provide back-office services so that the Times of San Diego can focus on journalism. It’s an interesting model that I’ve heard several people in the industry advocate.

Looking at the excellent research that Medill has done, a group of action-oriented academics are looking at ways to make this kind of in-depth research scale.

In the UK, Mill Media, which started in Manchester and has expanded to Liverpool, Birmingham and Sheffield, is looking to take on local media in London. Less than a year ago, CNN CEO and former New York Times CEO Mark Thompson and Nicholas Johnston, the publisher of Axios, invested £350,000 into Mill Media. It looks like they are deploying that capital and more.

Dean Baquet, the former executive editor of the New York Times, said that delivering the reinvention that community journalism needs requires a “shift from competition-driven models to audience-based ones, emphasizing that collaboration is now essential for the economic sustainability and strength of local journalism”.

I am leading a workshop next month about finding stories in data, and it is great to see data journalism starting to become part of the toolkit of smaller newsrooms.

Rebuilding demand and revenue for journalism – Co-creation and membership tiers

Both the US and UK had three-day weekends, so I took a bit of a break. I hope that everyone there had some nice downtime, and in that spirit, I wanted to continue my series on creating demand for news but in a lighter vein. Thinking back to the last edition of the newsletter, one of the ideas for re-igniting people’s passion for local news was co-creation, and we should take a page out of the playbooks of creators.

I was reminded of this when listening to my music collection, and my Plex server threw up a random Coverville podcast from 2008. If you don’t know the podcast, it’s a brilliant podcast of cover songs - covers of an artist’s catalogue or the artist singing cover songs. Host Brian Ibbot seeks out original covers that offer up some surprising interpretations of the originals. In addition to producing a high-quality podcast, Brian has long had innovative ways to engage the audience and partner with other podcasters, which have helped support the podcast and grow its audience. When I first started listening to him in 2006, he had a feature called Musically Challenged, when other music podcasters would create incredible music trivia segments for him and his wife Tina, and he would also host his own Musically Challenged Live episodes when listeners could take part. Now, he has a Patreon membership scheme with multiple levels and benefits, including access to members-only episodes, a Discord channel and coupons for merchandise.

The idea of using co-creation and engagement as a selling point is a common point amongst podcasters, YouTubers and newsletter authors. A couple of years ago, my wife, Suw, turned me on to the Strong Songs podcast. Multi-instrumentalist Kirk Hamilton breaks down famous songs and how they were made. For instance, on a recent episode, he went through the making of Blondie’s Heart of Glass, from an early stripped-down version through every section of the final disco dance classic. This episode was a new experiment for him in which his Patreon supporters voted for the song he would analyse. It came down to Blondie and Nirvana, and Blondie won.

These types of strategies are everywhere in the creator economy, whether it is subscriber-only content like Joyce Vance’s Five Question series on Substack or Action Retro’s Sean Malseed reading out his Patreon backers at the end of his ‘shenanigans’ resurrecting or turbocharging vintage computers.

Of course, traditional media are adopting these tactics as well. Last week at’s News Rewired conference in London, The Telegraph’s Head of Newsletters Maire Boneheim talked about how their political reporter Dominic Penna regularly takes questions from paying subscribers who receive the newsletter to put to politicians.

Riffing on thoughts from the last newsletter about creating demand for local news, I think that membership is such a powerful model. Most members will be happy to contribute money but do not want to get involved in co-creation. When I worked at The Guardian, I was introduced to the 1-9-90 model of user engagement and online communities. It states that 90% of people are happy to be in the audience, reading, listening to or watching what you create; 9% will rate or recommend the content; and 1% will engage in active co-creation. While it’s important to involve as many people as possible, it’s also good to manage your expectations.

However, it also is important to understand the different motivations of your audience and build membership or subscription tiers that tap into how and why they engage with or don’t engage with you. The higher tiers can tap into people’s desire to support your efforts and also to be involved in them. When considering your membership tiers, it is always useful to survey existing members or subscribers, if you’re transitioning to a membership programme, as well as your newsletter subscribers who might not yet be supporters.

And now the links for the week. Rasmus Klein Nielsen of the Reuter’s Institute takes journalists to task for their coverage of AI. “(N)early 60% of news articles across outlets were indexed to industry products, initiatives, or announcements,” research has found.

And the Reuters Institute has also just released additional research into public attitudes towards generative AI. “Most of the public expect generative AI to have a large impact on virtually every sector of society in the next five years, ranging from 51% expecting a large impact on political parties to 66% for news media and 66% for science.”

The big news of the past week was News Corp joining other major news organisations in signing deals with OpenAI. The Conversation looked at what this will mean for journalism, and this analysis says that small and medium publishers will be pushed aside as AI groups look for deals with major players with large archives. This will only add to the pressures on the industry to consolidate.

To demonstrate how important AI has become to journalism, Yolanda Ma at the University of Hong Kong will be teaching a course on AI that will be mandatory for journalism master’s degree students.

As we consider the future, the Pew Centre looked to the past and found that 25% of all webpages that existed between 2013 and 2023 can no longer be accessed. I think of all of the stories that I’ve written and probably many of them are most likely only accessible via microfilm or old hard copies.

Publishers like the FT and DC Thomson have been using attention metrics like quality reads to measure attention, and now these attention metrics are spilling over into the commercial side of the business as the New York Times. It’s not entirely new as advertisers have wanted a better sense of viewability and engagement with advertising that CTRs don’t capture.

How journalists and their managers are beginning to address mental health

This past week, I couldn’t help but notice several stories relating to journalists’ mental health and efforts to improve it. Hannah Storm has released a book with practical advice on how journalism managers can support a positive culture. One thing leaps out at me: Journalists are stressed about expressing distress because they fear it will be perceived as a sign of weakness. That speaks volumes about long-standing issues in newsroom culture.

Hannah is a growing number of journalists working in this space. From this piece by The Fix, Mar Cabra says, “Journalism is one of the most stressful professions alongside firefighters, military personnel and doctors. Yet despite its intensity and burden, journalists lack the basic training to self-guard themselves. The profession is missing its first aid kit.”

And I’ll close out on this link that came to me from Samantha Ragland on LinkedIn, who says, “The more we talk about the hazards of this job and how we find our way through, the more likely we are (and others) to navigate them with our minds and bodies (intact).”

It links to Knight Fellow Pavla Holcova’s piece about why pushing harder wasn’t helping. God knows I’ve been there - 80-hour weeks covering elections, months without much of a break after the 9/11 attacks and working through shingles and COVID. It used to be a temporary burst of work until it became permanent. Holcova’s piece is below as well. It’s really worth reading. I’m starting to prioritise leisure, which has meant being more focused when I am working. We need to talk about this and not just journalists. Overwork seems to be a permanent fixture of professional life now, and I think we need to call time on it.

Solving the local news demand problem pt 1 the content angle

I am part of the local news problem. I have moved eight times since the beginning of this century, including three times across the Atlantic. Although I dive into the communities where I live, I don’t build the kind of deep roots in a place that fosters a connection to local news. Even though I live in the UK after eight years back in the US where I’m from, I have digital subscriptions to the New York Times and the Washington Post, but I only pick up my local paper - the Reading Chronicle - from time to time. Looking at research from the Pew Research Center in the US, my local news patterns are similar to their findings. I rely on friends and the website of the local social enterprise outlet, Reading Today.

Americans have lost interest in both national and local news, the research found, and while young adults have never been that connected to local news, the declines in engagement happened across all age groups. In 2016, a slim majority of older Americans closely followed local news, but in the following years, they also lost interest. Both the oldest and youngest Americans saw a steep drop in news engagement between 2016 and 2018.

This isn’t about trust

The lack of interest in local news was a rare non-partisan issue. The research found almost no difference in engagement with local news between Republicans and Democrats, and the lack of engagement isn’t down to a lack of trust. Democrats and Republicans both hold positive opinions about local journalism, with Dems having only a slightly more positive view of local journalists than Republicans.

This stands in stark contrast to how Americans view ‘mass media’. At a national level, a 47-point gulf stands between Democrats and Republicans in their trust in mass media.

At the risk of repeating myself, the lack of engagement with local news isn’t down to trust. As Pew says, there hasn’t been a change “between the two major political parties in views toward local media”. Over the same period, trust in national mass media has fallen dramatically amongst Democrats, Independents and Republicans, with only 11% of Republicans having trust in the media.

A few other things to note:

  • People with university degrees are even less engaged with local media.

  • This makes me scratch my head. “63% of U.S. adults say they think their local news outlets are doing very or somewhat well financially.” Although newspaper readers are a bit more aware that all is not well.

  • Only 15% of people pay for local news. 49% say that they can get what they need from free sources, and 30% say that simply aren’t interested enough in local news to pay for it.

Responses to the issues of a lack of demand

In the US and the UK, there is a growing sense of crisis about local journalism. Research and regulators have pointed the finger at platforms. They rightly point out that platforms have captured advertising that used to go to news media. Attempts to force Google and Facebook to pay news providers for linking to their content have created more problems than they have solved. In Canada, Meta - the owner of Facebook and Instagram - simply stopped linking to news content, which decimated small independent news publishers, forcing some to close.

While more revenue would help local news outlets, Pew’s research shows that there is a more fundamental problem: Lack of interest in local news. Joshua Darr, an associate professor in the Newhouse School of Public Communications and a senior researcher in the Institute for Democracy, Journalism & Citizenship at Syracuse University, highlighted two studies that found that you literally couldn’t give away local news in writing for the Nieman Lab. How do you solve this issue of lack of demand and interest in local news, the disruption of local news business models and the decline in civic engagement? It is unlikely that local outlets will rebuild their audiences of the past so they will have to adapt to this new era of low demand. He highlighted a new model of civic journalism advocated in the Roadmap for Local News report. Joshua views the problem not only as one of supporting local news outlets but also of re-engaging people in their communities. The solution:

By involving non-journalists in the newsgathering process, helping community members navigate the policy environment, and reorienting coverage around the questions and concerns of regular people, “civic media” could improve representation by reminding city government officials that they are being watched by a diverse array of constituents. This civic media model of journalism does not require broad-based readership to have positive political effects.

Community co-creation

I did this when I was a local news executive for Gannett serving communities along the shores of Lake Michigan north of Milwaukee a decade ago. A teacher who advised the student newspaper at one of the high schools approached me with a problem. The student newspaper had stopped printing, and the students felt a loss because it was a challenge to get the clips they needed to submit when they applied for university. And it simply created a loss of status for them. In retrospect, we could have simply given over part of the Sunday newspaper to the students on a rotating basis. (Steal this idea!) Always one to over-engineer a solution, I instead gave the students an assignment: How has technology affected your lives? One student interviewed her grandmother about the changes in technology that she had seen in her life, and another wrote about the impact of social media on their lives. In the end, we printed eight stories from three high schools, and I posted others online. I remember a friend who worked for the local chamber of commerce commenting on how impressed he was about the articulateness of the local youth. We can and should empower community members to tell their own stories, freeing up reporters to cover local government and other hard news, while also capturing the lived experience of the community.

Local news as a utility

A working example of the kind of civic journalism that the Roadmap for Local News advocates for is The Documenters project in the US, which trains volunteers to cover local meetings. I also think seeing local news as an information utility as Outlier Media in Detroit does, using a text messaging-based service to provide information to people in the city on how to tap into local services. Both projects aim to get people involved in journalism, not just acting as passive consumers.

And Outlier Media approaches journalism as a utility. The navigation for their site is radically different from most local news sites. Yes, the content might be similar when you drill down, but the navigation focuses on what the content might mean for a person in the community, not just the content category. For instance, the category “Fix this First” takes you to a page titled “Basic needs across Detroit” and includes things stories about infrastructure repair and upkeep. It is a very different positioning for local news. I often talk about how journalism needs not only who, what, where, when and why but also why should a person care.

Does a community still need someone to tell its stories?

I was having a conversation recently, and I was talking about my passion for community and communications. But I wondered if my view of the role of journalism in local communities and also engaged journalism was of a time, a bit nostalgic and also steeped in how people used technology then rather than now.

Do people want to read stories about interesting people in their communities? Does this need to be done by a paid professional, or does this only need to be facilitated by someone? If the need is only one of facilitation, where does that role fit in the community? Is it a volunteer or paid role?

One responsibility of my first job as a reporter was a weekly feature in the Sunday paper - the Nor’wester in the Hays (Kansas) Daily News. I interviewed a Methodist minister who was also an amateur astronomer, a farmer who had turned to organic methods to make a living off of the original 40-acre farmstead that had been passed down through generations of his family and the owner of a local junk yard who was coming to the end of his life and wanted to tell a story he had never told anyone: How his Army unit was one of those that had liberated the Bergen-Belsen concentration camp (and had his own photos of the horrors to prove it). Stories are everywhere. Interesting people are everywhere, and people still love to hear these stories about their communities.

As local journalism has shrunk, it often has retreated into covering just the official life of our community - government, crime and infrastructure. We need to be creative and find ways to restore the information utility of local journalism as well as tell stories about the living, breathing heart of community life. To riff on something the great playwright Arthur Miller told The Observer, a good newspaper is a community talking to itself.

But we need to focus on the demand side of the equation as well as the supply. This isn’t just news avoidance or news fatigue. This is fundamental to people’s engagement with their communities as well as journalism. It is going to take systems thinking to restore people’s interest in local news, and I think Joshua Darr is onto something. Next week, I’ll think about the revenue to support this.

And now onto the links this week. In a discussion in the News Product Alliance Slack this week, someone was asking for advice after a deep drop in search traffic after Google’s recent algorithm update in March.

This was one of the stories that got me thinking about local journalism demand. In one report about rebuilding local media, researchers seemed to pass over public media institutions as only “pass-through” providers of local content from their networks. As someone who worked in local public media, that’s a bit harsh, but it was a critique that we heard. Detroit PBS CEO Rich Homberg spoke to Editor & Publisher magazine about their efforts to increase their local content production and also to partner and collaborate with other groups in the community. Ideastream Public Media, where I worked from 2018 to 2022, had a similar programme, but it waned by the time I joined the regional group. I hope that some of the vast amounts of money flowing to restore local journalism flows to public media. And I think projects like what is happening in Detroit show that public media leaders want to play a positive role in rebuilding local journalism.

This is a question that I have heard in the US and the UK, especially as journalism jobs have been concentrated in New York, Washington and London where the cost of living is prohibitive. Moreover, it used to be that you started off on a low salary but could grow into higher wages locally or move up to national outlets. That progression has been under threat for much of the past decade. And where digital outlets offered opportunities for a while, we’re in a moment where those jobs are drying up until digital shops can figure out a business model that isn’t so dependent on advertising.

Legislators in my own state are trying to address this issue.

It is important to say that these projects used machine learning rather than generative AI, and as I have written about quite a bit here and in the Media Bulletin newsletter I edit and write for Pugpig, this bit of AI technology has been playing an important role in journalism for years. It is good to bring this into the light and help people understand the positive role that AI is playing in reporting complex stories.

This is becoming increasingly common, and actually, AI usually does a pretty good job of this.

TV stations in the US make or used to make a lot of their revenue from retransmission fees, fees paid to cable and satellite companies to rebroadcast their content. With the decline of paid TV as Americans turn to streaming services, TV station owners like Sinclair have been hit hard. Most Americans get their news from their local TV stations. I have my issues with Sinclair, which injected a partisan tilt into local TV news that hadn’t been there before. Regardless, this financial pressure on local TV stations could harm an important source of local news in the US.

Look at advertising and retail trends to understand what “killed traditional news operations”

Job cuts and closures across the media in the US, UK, and Canada in 2023 were, in the words of the Press Gazette, “brutal”, and 2024 is off to an equally rough start. In the US, job losses across digital, print and broadcast have led to some describing the situation as a market failure.

What is ailing digital, broadcast and print journalism is complicated. Certainly, news has been losing in the attention economy for quite a while. A 2010 analysis by Ken Doctor highlighted that users of the New York Times site spent roughly 20 minutes a month, which was better than the 8-10 minutes a month that audiences spent on most local news sites. In 2010, the average Facebook user spent seven hours on the social network, more than “40 times more time spent on social sites than on any single news site”, Ken said.

As internet analyst Mary Meeker pointed out for several years in her annual reviews, advertising follows attention. While these issues are connected, it is the loss of advertising that has and is disrupting journalism. The layoffs and closures in the past year have been because of a decline in ad revenue. As Australian media researcher Amanda Lotz recently wrote: “The development of more effective and efficient advertising tools is what killed traditional newspaper operations, not the circulation of news on social media.”

The erosion of the business of newspapers began long before the rise of social media and even digital media, which I have talked about before. Raw circulation for newspapers in the US peaked in about 1991, but if you look at newspaper ‘penetration’ - the number of copies sold versus the population in a circulation area - in the US, it peaked in the middle of the 20th Century and then declined. In 1950, penetration was 123%. That declined to 67% in 1990 and had dropped to 50% a decade later. Circulation declined as people turned to TV and eventually digital outlets and platforms. Advertising followed the attention.

I have another hypothesis that I really to research. I also believe that shifts in retail have dramatically changed patterns in advertising. The consolidation and nationalisation of retail eliminated many of the local advertisers that used to advertise in newspapers. There simply aren’t as many local independent businesses as there once were. When I looked through the back issues of the newspapers I published, it was incredible to see the number of local grocery stores that advertised. In one of the towns where I edited the newspapers, it was the headquarters of a regional department store chain, even though the town had a population of 50,000 people. Those local or regional department stores took out huge full-page ads in their local newspapers.

Another case in point, the sales director at that paper, the Sheboygan Press, told me that when he started in the 1980s, the store managers of even national chains had locally controlled advertising budgets. They could decide where they spent their advertising money whether it was spent at radio stations, outdoor, or the newspaper. By the time I was executive editor, all of the ad inserts were printed nationally and added to the Sunday newspaper. Now, it is just as likely that a major retailer like Target will rely on selling directly to customers via their app as advertising via flyers in newspapers.

This is why larger news and media organisations have pivoted to reader revenue. In the past week, The Atlantic has announced that they now get 2/3 of their revenue from readers rather than advertising. However, more could and should be done to innovate around advertising products and other revenue streams, and the opportunities to do this vary by the scale and market sector of the audience.

Space exists for innovation in both revenue and content products. Lotz goes on to say, “The commercial failure of news organisations is not due to their journalism product but because they are no longer nearly so strong a tool for attracting attention for advertisers.” That statement requires some unpacking. I agree that journalism is struggling in the attention economy, but I think there are issues around their journalism products. As FT Strategies and the Knight Lab recently found out, a gulf exists between the expectations of Gen Z audiences about how they want to receive their news and the products that currently exist. There is ample room to innovate around individual products and the product bundle as the New York Times is demonstrating.

And now onto the links for the week. The AI developments continue to come quickly. The Financial Times became the latest major publisher to ink a deal with OpenAI. They will receive attribution for the user of their journalism, and the FT sees this as an opportunity to learn how generative AI will be used to discover content. Their openness to experimentation and learning shows how confident they are.

The FT can be confident because it was early to pivot to reader revenue. Financial information and analysis that the FT provides sits on the information wants to be expensive end of the spectrum. The FT has become famous for its North Star framework, in part, because it markets that framework as part of its consulting business, FT Strategies. This new metric includes: “’s paying digital audience; FT Specialist paying subscribers; FT Live paying attendees; FT newspaper circulation (retail and subscribed print sales) and paying subscribers.” If a customer is subscribed to multiple products, they are counted twice because it reflects the total revenue of the group.

As I mentioned above, The Atlantic has announced that it has reached profitability and now earns two-thirds of its revenue from readers. CEO Nicholas Thompson isn’t breaking out the champagne and instead highlighted that he will continue his disciplined approach. He isn’t going on a hiring spree.

For The Guardian, a 16% decline in advertising revenue has put pressure on its business, forcing it to seek a small number of redundancies (layoffs for my US readers). For a lot of publishers, I wonder how much they will pivot away from advertising and how permanent that will be.

While big players like the Associated Press, Axel Springer and the FT are striking deals with OpenAI, other newspapers are taking a different approach. As I wrote in Pugpig’s Media Bulletin last week, three approaches seem to be developing amongst publishers:

In this lawsuit, eight newspapers owned by hedge fund Alden Global Capital accuse the tech companies of violating their copyright by using their content to train their models.

Colour Axios CEO Jim VanderHei sceptical of AI. He and his company spoke to all of the AI heavies.

I walked away from those conversations is, you’ve got six or seven of the biggest companies in the history of humanity collectively pouring trillions of dollars into a technology that right now, I would say, is a little janky. It’s not that impressive right now.

Sounding very much like Wrexham’s Phil Parkinson, he says that AI will write a bunch of commoditised content, which “which I think are fucked anyway”, VanderHei said. It’s a useful contrary position, and VanderHei has launched two very successful media brands so he’s difficult to write off.

An interesting stance on how AI will be added to publishing tools. “Primarily, our AI tools streamline editorial workflows by automating routine tasks such as translating, tagging, categorization, titles, and summaries, which frees up journalists’ time.”

I am going to make a link social media and AI. A YouGov poll found 48% of Brits view AI in journalism negatively, and only 6% believe it will do more good than bad. Across the Atlantic, Americans want the government to make social media better. The

I’m writing this on Beehiiv, and they made some news last week, announcing a new funding round. The newsletter space continues to be a space for growth.

Information districts: An American experiment in using journalism to meet community needs

I grew up in a wood surrounded by the corn fields of Illinois about 90 miles west of Chicago. The Windy City was a hub of journalism in the state, and it used to be that the University of Illinois at Champaign-Urbana, where I got my bachelor’s degree, kept the city supplied with talent. I know how grim the situation is with local news organisations in the US. But it still took my breath away when I recently found out that since 2005, Illinois has lost 85% of its newspaper journalists, according to Northwestern University’s Local News Initiative. Illinois has suffered the highest number of journalism job losses of any state in the US.

The accelerating decline of local news in the US

But the story is similar across the country, even if not to the same degree. “Total newspaper circulation declined from more than 50 million in 2005 to just over 10 million in 2023,” according to Frank Jones in Big Think. Sadly, not only are things not getting better, the decline is getting worse.

The decline is still accelerating. In 2022, an average of two newspapers went out of business every week. In 2023, it was two and a half. As a result, so-called “news deserts” are growing across the U.S.

And that means that more communities are losing their only source of local news. For many of these communities, there isn’t a local radio or TV station that is providing coverage.

I’ve written quite a bit about ways to stem this loss including applying innovation models, different funding models and the revenue mix for the new independent news organisations springing up in communities. we’re going to have to get creative to stem the collapse.

Information Districts offer a new model

We are going to need all kinds of experiments and models to address this crisis, and it is a crisis. For me, it is not just a crisis in journalism but a symptom of the decline of communities and the rising crisis in loneliness, particularly in my native United States. When I was at the BBC, they brought Robert Putnam to talk about his research and book, Bowling Alone: The Collapse and Revival of American Community.

Can journalism play a role in rebuilding communities? I think it can in partnership with other local institutions, such as libraries and civic groups. I have long followed the work of Simon Galperin for his advocacy of information districts, which is a form of municipal service district. In the US, there are 33,000 such districts, which are “defined areas in a city or county” where property owners pay an additional tax for extra services in the area. They have been established to pay for fire, water, sanitation or business improvement districts, but Simon’s idea is that the same concept could be used to provide for the information needs of a community. Simon estimated that if the 32,000 people in his community paid $40 a year, it would provide a half-million-dollar budget for a newsroom. He said:

That budget could support print or online newspapers, or livestreaming town council meetings. A special service district for local journalism could convene community forums or media literacy classes, launch a text message and email alert system, or pay for chatbots that answer locally relevant questions, like “Is alternate side parking in effect?”

He estimated that the budget would provide for three to four reporters, money for events and community engagement activities. Of course, as Christine Schmidt wrote in the Nieman Lab, it would be difficult for low-income communities to pay for such districts. Galperin said that communities could pool their resources. “The point of an info district it to create more civically engaged communities. It’s about bridging the gap between democracy and journalism,” he said.

Galperin is now testing his idea with the Jersey Bee, which “address(es) people’s basic needs to enable their well-being”. For an info district to serve its community, it needs to identify the information needs of that community. Galperin has applied Maslow’s Hierarchy of needs as a framework to provide a map of community information needs. “It’s a framework we use to prioritize delivering information that enables more people to participate fully in our community by addressing gaps in access to essential resources, public safety, and social connection,” Simon wrote.

It’s a novel model for local news that focuses on engaging the community by listening to community members and collaborating with them. The project looks to build media literacy in the community and help people living there improve their quality of life.

Their research isn’t just driving the topics they cover but also how they distribute their news. Like Outlier Media in Detroit, they are using a text-based information service, which is unsurprising because of Simon’s work with Groundsource. Broadcasters and newspapers are using its text-messaging technology to engage audiences in the process of their journalism not just trying to build an audience after the journalism is finished.

Simon’s approach has elements of human-centred design and Saul Alinsky’s community organising approach. It is radically different than the standard approach to journalism, and I am cautious about invoking Alinsky’s name because he has become a partisan symbol of animosity for the Right in the US, in no small part because of Barack Obama’s history as a community organiser. To me, community organising is about helping communities meet their needs, and I think Simon is right in trying to rebuild journalism’s relationship with the communities that it serves because that is essential in rebuilding the trust people need to have in journalism.

A decade ago when I had the gift of serving as a local newspaper editor in the US, so much of my energy was in building relationships in the communities our papers served. Like what Simon is doing, some of what I did was about facilitation, not just the traditional production of journalism. I was honest with the community that we couldn’t cover the community they wanted without working with them. Unfortunately, I didn’t have much of a runway to run with that approach. Within months after I started, Gannett launched its Newsroom of the Future reorganisation, which I was involved in at the national and regional level. I tried to build my vision of community engagement into what happened after the reorganisation, but due to cuts and people taking buyouts (voluntary redundancy), I lost half of my staff for a time. And the cuts took my own job only months later.

I am rethinking my future, and I wonder if there is a way that I can have another go at my vision. It definitely will have to exist outside of the corporate model. If you want to talk about it, please get in touch.

AI shifts from experimentation to execution

I have been working in digital journalism since the mid-90s, and there have been few technologies that have shifted from awareness to experimentation to implementation as large-language models have. Poynter highlighted an Associated Press survey that found 70% of newsroom staff in the US and Europe are already using generative AI to create content, using genAI to help write headlines, newsletters and social media posts.

I have been a little surprised about the sudden frenzy over AI because journalism organisations have been using elements of artificial intelligence for years now. They have been using:

However, genAI tools have lowered the bar to entry in using the technology. Lowering the barriers to entry for technology always as I wrote in Pugpig’s Media Bulletin last week, we’re seeing news organisations shift from experimentation to execution with this new generation of AI tools. As with other technological revolutions in newsrooms, the tools have become accessible to a wider range of journalists, and for more advanced news organisations, they have the product frameworks and the cross-functional management muscle to rapidly experiment and iterate AI services.

Of course, we are also seeing volume publishers lean into AI to create more content. That way lies madness, and it runs counter to what news organisations need to do. AI should be used to free up journalists time to do more original reporting and engage audiences, basically any activity that creates more value for audiences and captures more value from them.

And meanwhile, the platforms continue to build their AI capabilities. Google continues its work with Gemini and Search Generative Experience, and Microsoft pushes forward with Copilot. Meta continues to update and roll out its AI tools. I used Copilot to create the image for this newsletter, and I have to admit to being blown away. That being said, I often use Creative Commons images, another community that I am part of.

Are paywalls ceding the battleground to misinformation?

We wrote about this piece in Pugpig’s Media Bulletin this week. Time’s former managing editor Richard Stengel has researched and written about misinformation, and he is concerned that as more journalism moves behind paywalls, it means that more people will fall prey to misinformation. While I share his concerns about misinformation especially with increased activity by state actors and partisans, I don’t agree with his solution, which is to simply drop the paywalls around election content. I don’t believe in simple solutions. If the solutions to journalism’s problems were simple, we would see more success, especially at the local level. It is more complicated.

I do agree with him that news organisations should leverage the attention that the elections will deliver to attract more subscribers and more registered users. As my friend at The Audiencers highlighted, Bloomberg changed up their paywall to a registration wall to allow audiences to read their climate coverage during COP.

And lastly, it is interesting to see the unraveling of the consolidation in digital media. G/O just sold The Onion to local investors in Chicago, giving the Windy City-based staff assurances that they could continue to work where they were and telling the that they would deal them into the satire site’s success. As someone who read The Onion in print at university, I’m pulling for them.

Vice Media sold Refinery29, which has been hit hard by the decline in social media, to Essence. Sundial Media Group, a VC-backed company that owns Essence, says that the purchase will fill out its holdings across culture and commerce. Commerce is increasingly becoming an element of fashion and culture content companies.

Why news organisations are resurrecting their on-site community efforts

A bit of an apology for the slight delay. I took up running during the pandemic, and I ran my first half-marathon this week. I have been training for the past four months, and it felt like such a great achievement to finish the race, much less finish it in one hour 41 minutes.

After years of outsourcing interactivity and community to social platforms, news organisations are launching multiple efforts to reclaim their relationships with their audiences. It comes almost a decade after news organisations threw in the towel, shut down their comment sections and focused on off-platform strategies for their audience development. As the executive editor at Reuters said at the time: “We felt that, since so much of the conversation around stories had gravitated toward social, that was the better place for that discourse to happen.”

However, with Meta making it clear that it won’t be promoting news either on Facebook or in its new Twitter competitor Threads and declining traffic from other social platforms, publishers have decided that it is time for them to rebuild their own communities. Comments are reappearing on media sites and apps as community software has become more sophisticated, services such as Coral, Hyvor and Viafoura. (Disclosure, these are all community integrations with Pugpig’s Bolt app platform - my day job.) These platforms use AI to help with moderation and have strategies to help support positive communities. As I know from my years working on engaged journalism projects at the BBC and The Guardian, good technology is part of supporting healthy communities, but the best technology cannot replace the active involvement of the editorial staff.

It is inspiring to see what innovative media companies are doing to reclaim the relationships with their audiences from the platforms. In the Philippines, the groundbreaking journalism group Rappler launched its own community apps on iOS, Android and on the web late last year. Rappler decided to do this for audience development and also to counter disinformation that has been rampant on social media platforms in the Philippines.

“The insidious manipulation of Big Tech – inciting fear, anger and hate for profit – has destroyed the public sphere and the crucial discussions needed for democracy. It’s time to build our shared reality and redefine civic engagement, to restore trust,” Rappler CEO and Nobel Peace Prize laureate Maria Ressa wrote in an article launching the apps.

Rappler has long been incredibly effective at leveraging technology to support its journalistic mission, but they have also married technology with smart community strategies, involving journalists in the conversations on the platform. “When you go into chat rooms and you see Maria or another Rappler reporter asking you what you think, there’s something there that builds trust,” Rappler Community Lead Pia Ranada told Esther Kezia Thorpe for Digital Content Next. Rappler’s success has been its commitment to journalism, its successful development of technology and its product thinking. They have used the community for crowdsourcing and have moved beyond news content, which has opened up revenue opportunities.

Rappler is not alone. I was fascinated to see Jeff Elgie of Canada’s Village Media announce that his group was launching a “local, community-powered social network”. He wrote:

“SPACES: a haven for local discussions, curated by those who know them best—local experts and professional journalists. Our platform is more than just a social network; it's a commitment to reviving the lost art of community engagement. By fostering safe, civil, and meaningful interactions, SPACES aims to strengthen the bonds between neighbours, reignite local passions, and rebuild the trust that has been eroded by impersonal and divisive platforms.”

Elgie’s Village Media has been building a local journalism network in Canada while the country’s local media has been declining just as rapidly as in the US. Spaces and Village Media is a company to watch, particularly if you work in the local journalism space.

Staying in Canada, the Toronto Star added comments across its site in 2022. They tied commenting to registration, which became a key part of their strategy to convert anonymous users to known ones and improve the community experience, according to an article on Poool’s Audiencers. It led to improvement in several KPIs, including:

  • A 26% increase in new commenters

  • A 72% increase in registrations and commenters now make up 25% of all registrations.

  • And since commenting has been tied to registrations, there has been a 405% increase in logins.

They have since added new features that drive engagement from their commenters using Viafoura’s technology. When users login, they are alerted to responses to their comments, much as on social networks like Facebook. The volume of comments has increased by 60%, the replies to comments increased by 79% and time spent in the commenting section has increased by 30%.

Having spent more than half of my career working at the intersection of community, technology and community, it is exciting to see these new efforts. I was involved in several early audience engagement projects at the BBC, including the World Service’s Talking Point, answering crowd-sourced questions about the 2000 US election (using an early mobile webcasting kit), blogging about the 2004 US election and being on the launch team of the BBC’s World Have Your Say. When social media platforms led media companies to focus on off-platform activities, for a time it led to too much focus on building the audiences for those platforms without enough clear benefit for media companies. Certainly, some strategic leaders made sure that their off-platform efforts had direct benefits for their companies in terms of audience development and revenue, but for volume-focused companies, I saw those companies chase the whims of platforms without enough attention to how these efforts supported their own businesses.

The Toronto Star’s success shows how these new community efforts can drive important engagement outcomes, and Rappler is showing how strategic use of community can directly generate additional revenue. I am hopeful that these efforts can restore some of the damage done during the Platform Era.

Now for the weekly round-up. Isabelle Roughol highlights the lack of advancement opportunities for journalists and how this is leading to the flight of talent. She proposes that journalism companies develop a career ladder and communicate transparently how employees can climb it.

Rasmus Kleis Nielsen of the Reuters Institute makes an excellent point that many recent tech advances have failed to live up to the hype that they would transform society such as AR/VR, smart speakers and blockchain/Web3. The demand was dramatically less than the titans of tech led us to believe. He described the public’s approach as “AI pragmatism”, with a mix of concern, scepticism and yet a practical appreciation.

That’s the demand side, and Rasmus also considers the supply side. He says that news organisations are engaging in experimeation and incrementalism. Bookmark this one.

Axios thinks that original reporting and in-person events will become even more valuable in the age of AI.

With this view in mind, it was interesting to see Yahoo acquire Artifcact, the short-lived app from the co-founders of Instagram. Yahoo will not be bringing the app back but will instead use its underlying technology to power personalisation across its platform.

Pain in media podcasting

Simon Owens explains why local podcasts have struggled. As he says and I know, building audiences for local podcasts is an uphill battle, and he says that local ad sales teams lack the sophistication to do the type of sales necessary to support them. It’s hard to sell ads when local podcasts struggle so much to build an audience. The podcast economy has a high head and a very shallow tail.

Simon points to SB Nation shutting down its podcast network which covered local sporting teams across the US, as well as The Athletic closing some of its local podcasts as well. We currently don’t have have a generic model for local podcast success, and from the time I worked for a local public media group in the US, I found that we had an easier time of building an audience in 2018 than we did a couple of years later.

Chicago Public Media’s problems run deeper than the difficulty of local podcasts, but that is one element of their challenges. The Chicago public media group is suffering from a declining audience and advertising revenue as well as declines in philanthropic support, which is a major revenue item for stations like the groups WBEZ. The cuts also included drastic cuts in the broadcasters podcast unit. Podcats not tied to its news output were shuttered. If a big shop like WBEZ struggles with promoting its podcasts, it underlines challenges that the medium faces.

It is not all doom and gloom. In announcing a deal by Substack to allow podcastrers on its platform to distribute episodes on Spotify, Substack annnounced that its podcasters were generating $100 m of revenue a year, which was double the year before.

Events and custom content are helping the start-up land major accounts including Microsoft, Verizon and Genesis. The young global news site already is having profitable months despite the generally challenging environment in media. Some 20% of Semafor’s audience are C-suite executives, and that is helping to drive their sales.

AI influencers have grown very popular in the Chinese market, and by adding tools to create them in TikTok, the hope is that the app can generate more revenue. All I have to say is what fresh hell is this!

What news organisations can learn from John Deere’s marketing mistakes

What lessons can journalism organisations learn from an agricultural (and construction) equipment maker? Relationship marketing. It is a branch of marketing that focuses on creating long-term relationships with customers by focusing on their satisfaction. The goal is to build a deep sense of brand loyalty. For the media, this leads to the kind of retention that is a major goal of subscription businesses.

I grew up surrounded by the cornfields of Illinois. I helped my friends not far away in Wisconsin milk their dairy heard and collect eggs on their farm, and my mother’s farm in central Illinois is still in the family. Farmers where I grew up primarily bought International tractors, which were red, or John Deere, which were green. John Deere always seemed to garner the most loyalty, and you can still buy t-shirts, hats, posters and all kinds of things emblazoned with “I bleed green”. That’s the kind of loyalty John Deere elicits from farmers. Most journalism organisations would love to have such fanaticism amongst their customers.

Newspapers did at one point. Growing up west of Chicago, I grew up reading Mike Royko, who was one of the singular voices of Windy City journalism. He is one of many journalists on the Wall of Fame at another Chicago institution, the Billy Goat Tavern. The wall includes the late, great oral historian and radio host Studs Terkel. These were the influencers of their day. The Chicago Tribune and the Sun-Times were the voices of the city that represented very different parts of Chicago society, but you developed a relationship with the voices in their pages, writing about news, society and culture. They were more than columnists shaping opinion. Royko and Studs were the voice of the people, often people who felt like they had very little voice in the machine politics of Chicago.

Relationships take nurturing, and businesses can damage those relationships. During my master’s degree, I studied how John Deere had damaged the relationship that it had created with customers by waging war with them over issues known as “right to repair”. At the time I did the research, farmers in the US were bidding up prices on tractors and harvesters from the 1980s because they were much cheaper and they could service them.More than that, Deere was shutting down licenced service centres, which meant that farmers couldn’t get authorised service in a timely fashion. John Deere made peace with the National Farmers Union in 2023. Their product mix and marketing had cost the company dearly in one of the most important competitive advantages they had: their enviable relationship with their customers.

Journalism companies have done their fair share to alienate their communities, especially those large groups that have bought up local titles and then presided over their decline. In the US, researchers tracking the expansion of news deserts now refer to some titles as ghost newspapers. They say that these titles no longer cover meetings or local breaking news. To me, the bigger issue is that they often have no editors and maybe one or possibly two reporters who are out in the community. Local journalists not only provide coverage, but they are the face of the newspaper. They are the first and most important line in building these relationships essential to building loyalty. As we wrote in the retention report with the Media Collective: successful retention programmes are about relationship management.

When I was a local editor, I tried to be as visible in present in the communities I served. I hosted meetings and tried to get to know people. I knew it was important because I was new to the area. As the job pressure increased, I became more tied to my office. Now, there are just so few journalists working for these newspapers that it is difficult to have time to build these relationships.

How do journalism organisations restore their relationship with their audiences? For much of my career, I have advocated or worked to bring journalism closer to the communities they serve, whether that is a geographical community or a community of interest. As Rob Golub says in this piece, “Our revenue models are strengthened when our news products are lathered in community love.”

It goes back to what I wrote about earlier in the year, which is that information wants to be free, but it also wants to be expensive. In this context, providing a sense of connection in your community is a rare thing that people value. After the pandemic and with the increasing toxicity of social platforms, people crave positive connections. If you can help provide that in your community, it provides a tremendous value.

It is, of course, a balance. People will want news, but if you can do news plus community connections, you build the kind of relationships that build brand loyalty. I have done this kind of work before for large media brands including the BBC, the Guardian and Gannett. I think the one thing I would do differently is build the business model into the community model.

And now onto the links for this week.

The International Press Institute explores a theme that I have been writing about recently, which is how to uncover the unmet and latent needs of audiences. The newsletter includes how to do user interviews with loyal audiences to uncover things they wanted. “(T)hey can tell you when they read the news, what frustrates them about the news, and what makes them engage with your product.” And they said that questions that tapped into users’ emotional needs worked best.

Nick Petrie and I were talking about audience research over a pint recently, and he has some inspiring ideas in his most recent newsletter. News organisations need to invest much more in user research, and I think that academic institutions can do more to support news innovation by doing research for those outlets that can’t afford it. Nick says that news organisations need to be much more engaged with their audiences around novel news products. “Talk to them, show them new ideas, run diary studies, listen listen listen and then implement and listen some more,” he says. I could not agree with him more that we have a lot of territory to explore in terms of new concepts.

A good practical piece on using Google Discover as part of your SEO strategy, and I can tell you that from data we have from our customers at Pugpig, Discover drives subscriptions and registration because more relevant content than Google Search.

How AI is entering newsrooms

Google is paying newsrooms, mostly small ones, to test a generative AI tool that can take a ‘seed’ source such as a city council meeting and generate a story from it. The reporter can then add their reporting and check the story. Google also sees a role for the tool to support audience development by generating newsletters and social posts. Alex Kantrowitz has more details.

Zach Seward outlines his vision for AI at the New York Times. After reviewing where its application went awry, he laid out the values that will inform the use of AI at the Times. My view is that with any technology, it is important to consider the value that it delivers to the audience, whether that is better journalism through the unique abilities that AI brings to journalism such as finding patterns from images or unstructured text or an improved user experience. A smart piece to bookmark.

CrowdTangle was an incredibly useful service for both journalists and researchers. Researchers are trying to convince Meta to keep it running until after the large number of elections this year to help combat misinformation.

Journalism has always been a stressful job, and the precarity and low pay have compounded that. The study by the Reynolds Journalism Institute at the University of Missouri found that 84% of journalists said that burnout is affecting them personally. Those who took part say that four-day workweeks and management training could help. I was particularly interested in the relatively high percentage of people who had left journalism and said that management training would be helpful.

What blocks news organisations from innovating: The Innovator’s Dilemma and internal boundaries that become barriers

In preparing for a talk to master’s students at the University of Central Lancashire this week, I will discuss my motivations for the research I did during my master’s in innovation management and leadership. I wanted to understand why, despite perceiving the disruptive possibilities in digital media, traditional news organisations failed to adapt. For years, I had subscribed to Clay Christensen’s disruption theory that he outlined in The Innovator’s Dilemma. He pointed out that incumbent leaders in many industries have failed not because they didn’t recognise new technologies but because they “failed to value them correctly”. The ROI seems too low. It was the classic trading print dollars for digital pennies argument. However, disruptive innovators continue to experiment and move up the value chain.

The common argument has been that the “original sin” of digital journalism was giving away our content for free, something we never did before. However, this ignores the economics of newspapers, especially in the US, where I come from. When I was studying journalism at university, our professors told us that 80% of newspaper revenue came from advertising. The 20% of revenue from subscriptions, didn’t pay our salaries, it only paid for paper, printing and distribution. Advertising was our main revenue stream, and we failed to understand how digital media would disrupt those value networks. Digital news organisations did pivot to deal with the threat from digital classifieds with vertical-focused businesses around cars - in the US and The Guardian’s AutoTrader - or real estate. However, the development of entirely new ad models, ads targeted by search intent or based on activity on social networks, have radically remade ad markets. It was a classic example of disruptive innovation in which upstarts found the right application and then entered the higher-value markets. For years, Google and Meta have been growing by cannibalising ad revenue from non-digital markets, print and broadcast.

For publishers operating at a certain scale, their response was to grow even bigger. This drove M&A activity as publishers tried to scale their audience to compete against Google and Facebook It got to such a point that a major UK publisher, Trinity-Mirror, even rebranded itself as Reach. This strategy has not succeeded for several reasons:

  1. For publishers like Gannett, their acquisitions left them with unsustainable levels of debt.

  2. Reporting is an expensive business, and especially for publishers with local news properties, scaling is much more expensive than for a digital business like Google.

  3. Scaling the business didn’t fundamentally answer the issue of non-competitive ad products.

When media folks speak about the duopoly of Google and Meta, it is a rather superficial analysis of how these companies changed the value networks of advertising. As Clay Christensen pointed out, upstarts experiment by trial and error to find a model that eventually scales. John Battell covers the journey that Google took to find its business model in his seminal book on the history of the search giant. He called Google the “database of intentions”, and they have used those intentions to remake marketing and advertising. It is so clear how Google and Meta disrupted the value networks of traditional media when you hear about how Temu and Shein spent billions of dollars to advertise with the two companies last year.

After developing disruption theory, Clay Christensen went on to create a process in which companies can uncover the unmet needs of their customers to respond to disruptive innovation: jobs to be done. In a Harvard Business Review article describing how focusing on jobs to be done could achieve this, he wrote:

  • Most managers have based decisions on quantitative-data-based correlations

  • We need to know what the customer is trying to accomplish. The customer’s jobs to be done.

  • “When we buy a product, we essentially “hire” it to help us do a job.”

  • “(D)isruption theory doesn’t tell you how to create products and services that customers want to buy. Jobs-to-be-done theory does.“

As I wrote recently, Seth Lewis, Alf Hermida and Samantha Lorenzo wrote about how the jobs-to-be-done (JTBD) framework could be applied to local journalism. It is a paper well worth reading. This is the kind of audience research that is so desperately needed (and frankly, I’d like to do).

Internal boundaries, barriers to innovation and burn out

However, in my master’s research, I focused on another barrier to innovation: Internal boundaries and the boundary-spanning work of product managers. As David Skok said in the report with Clay Christensen about innovation in journalism, Be the Disruptor:

Our traditional newsroom culture taken in aggregate has blinded us from moving beyond our walls of editorial independence to recognize that without sales and marketing, strategy, leadership and, first and foremost, revenues, there is no editorial independence left to root for.

Product managers operate across these internal boundaries of editorial, commercial and technical operations, but that boundary-spanning work has its own set of challenges. Of the 17 product managers and product-oriented managers I interviewed, five had left positions or the industry entirely. My research looked at what had affected their sense of professional well-being so profoundly. Also, of the five, four were women.

This is a scene setter, and I’ll be writing more about this in the coming weeks and months.

Now onto the links from the past week. INMA has a huge range of pieces from their recent subscription summit in New York. This piece has good details about how Hearst is using data to optimise its pricing. The data has allowed them to identify and target in-market audiences to drive subs, and they are also creating some interesting products that allow them to connect with subscribers at multiple price points.

And the piece has details on how the Irish Times has leaned into newsletters, push notifications and events to keep their connections with readers.

Following the non-profit news organisation trend in the US, a local news publisher in Guildford has just become the first outlet to attain charitable status.

Here is another data point of how the platforms remade the value networks of media. Facebook Marketplace has become the go-to place for young users to buy things. This would have been the newspaper classifieds years ago. Gen Z may not use Facebook to post social updates - they have TikTok and Instagram for that - but they still use the venerable network to find cheap stuff.

AI revolution continues to roll through the media

As one commentator put it, last year media experimented with AI, and now they are starting to deploy it. And they can’t move fast enough as developments in the field are announced at a furious pace.

LMA is partnering with AI companies to help its members adopt these technologies quickly, with applications across editorial and commercial operations.

A thoughtful piece in the Press Gazette explaining to publishers what hill they should choose to die on when it comes to LLMs scraping their content. Archival content isn’t of as much value as their current news content. It is one of those harsh truths that news, by definition, has a short shelf life. However, AI can’t do reporting. Most parts of that will still require journalists, and that is what news organisations should be defending.

Google’s Search Generative Experience promises to deliver information that people want without the need to go off to a site to find that out. It is one of the things that is keeping publishers up at night, and now AdWeek has put a dollar figure on exactly how much Google’s SGE may cost media. Ouch.

Gen Z is using TikTok to search, not Google, but the search giant and others are fighting to remain relevant by introducing AI into their products. The disruptors are being disrupted.

Thomson Reuters shows that some of the major media players are looking to invest in AI. It is one way that well-heeled media players can try to cash in on the technology.

Lessons from succumbing to the perverse incentives of a rented audience

This was a week in which all of the harsh lessons and dangers for media of relying on rented audiences were on display. For one, Facebook completed its divorce from news media and told Australian news outlets that it would stop making payments to them. Facebook also announced that it was retiring its news tab in Australia and the US and would soon be doing so in other countries as well.

Alan Soon of Splice Media and Adam Tinworth have both said that it was time for media to move on, and Social Media Today gave a reason for media to do so with confidence. Research from “media insights platform Memo” found “no direct link between how much engagement a post gets in social apps and how many people then read it”. People aren’t reading the article but merely reacting to the headline, Social Media Today goes on to say. No journalist or journalism business wants that result.

And all the data shows that referrals have plummeted from social media over the last few years. Through my work over the past decade, I have seen the data of hundreds of publishers, and while Facebook used to drive significant amounts of traffic, it has been declining for years. Social Media Today says that there is still value in brand awareness, but research has shown that correct attribution is much lower for visitors from search and social than it is from direct traffic.

More than that, the research in Social Media Today found that negative content received more engagement than positive or neutral content. Outrage on social media drives more engagement than positive or neutral content. While it will surprise no one, it still underscores the perverse incentives that have operated on social media that have damaged not only media businesses but our societies and democracies.

Of course, social media still has a place in audience development. As Adam Tinworth says, we are moving to a platform+ era in which platforms and rented audiences play a role, but the focus must be on the KPIs that favour converting the relationships developed on social media into direct relationships. In my previous role, we used organic as well as paid social media to drive newsletter subscriptions. I’ll be honest, the newsletter we got from Facebook weren’t as engaged as those we got directly from our marketing or on our properties. And membership and subscription services like Poool are creating opportunities to convert social media users into known, registered users.

And on Bluesky, this was shared from Josh Marshall of Talking Points Memo. It showed the collapse of programmatic ad revenue for TPM over the past eight years. “As I think is pretty clear, if this is your business, you’re dead. You don’t have a business,” he wrote. The scale model of digital media was all about using social media to build huge audiences that could then be monetized through programmatic. I even remember hearing media executives talk about how they would make newsrooms pay for themselves through traffic and programmatic ads. It didn’t play out.

And that brings us to the current sad state of affairs for the scale players. This is how it played out. For groups in the US, many of them took on unsustainable amounts of debt in their pursuit of scale as they bought up more and more properties. They were forced to make cuts, in both the newsrooms and in their ad sales staffs, which meant that they struggled with direct ad sales. The newsroom cuts ran deep, and they made tepid efforts at reader revenue experiments with little conviction. The experiments usually failed because often they came at a point when the product was so gutted that it didn’t attract enough takers to offset the loss of advertising. The paywalls came down and the ad loads went up. (My wife used to say that she knew when she was on a news website because the fans on her laptop would spin up so high that it sounded like it was ready to take off.) Invasive ads made the user experience horrible, driving down traffic and yields even further. In a slow-motion car crash that played out over years, social traffic collapsed, pushing ad revenue down even further. It is sad. Poor user experience and poor products have turned off users, and after endless rounds of cuts, the content isn’t local enough to serve communities or good enough to convince people to pay.

That brings us to where we’re at now. And now, as we see from the latest print circulation figures in the UK, newspapers will have to develop digital revenue streams. There is no other option available.

Here are some steps to start that journey:

  • The first step should be a range of tactics to convert unknown audiences to known audiences, and they need to do this with all urgency. It has shown such promise for so many publishers and has so many benefits.

  • They also need to get closer to audiences. In the past few years, I have developed such an appreciation for qualitative research. I have been a ‘numbers guy’ for most of my life, and quantitative data is a great way to measure what your audiences are doing, but qualitative data tells you why they are doing it.

  • Use all of that rich first-party data to improve all of your operations - product, revenue and marketing.

We have models of how to make this work at almost any scale, and it’s sad to see how much damage is being done to journalism and media brands by doubling down on a strategy that has not worked for years - chasing scale via rented audiences.

The chains in the US have turned to try to capture some of the philanthropy cash that is now flowing to communities, but look at this story. Report for America says that they won’t put their reporters in hedge fund-owned publications.

Google is paying some publishers to test an AI product on their content. As publishers develop their strategic guidance on AI, they will need to define their terms of engagement with AI players just as they should have with social platforms.

I am sad for all of the journalists, photographers, ad staff and others who have lost their jobs over the last 20 years in the US and UK, where I have predominantly worked. But I do see green shoots of growth now as small start-ups launch with the MVP of the day, a newsletter, and then build out from there. They are far from replacing the reporting capacity that once existed, but I do hope that it is clear that it is time to close this disastrous chapter in journalism and move on.

Now to the round-up for this week. Like other major responsible news publishers, the BBC has announced their well thought through plan on how to use generative AI. The announcement looked at experiments in three areas:

  1. Maximising the value of existing content

  2. Reaching new audiences

  3. Improving processes to make them more efficient

Meanwhile, Mattie Peretti who started out during an ICFJ Knight Fellowship to find out how AI could be used to help news organisations serve their communities better. After four weeks, he found the problem statement was wrong, and he says: “we can’t make our industry more sustainable without radical new solutions and creating products that users actually want. The role AI might play in creating them is somewhat irrelevant.” Amen and read on.

A blockbuster piece from the New York Times looking at how Google and Meta have benefited from a Chinese e-commerce spending spree to crack the US market.

How the media lost the future, and how we might regain it

My first glimpse of the future of media came in a student computer lab at my dorm at the University of Illinois at Champaign-Urbana in August of 1993. (Yeah, I’m that old.) My friends were buzzing about a new app that was in beta, something called a web browser, Mosaic, which had been developed by Eric Bina and Marc Andreessen at the National Center for Supercomputing Applications on campus. Before Mosaic, I couldn’t imagine my parents ever using the internet. It was just too technically complicated, but Mosaic made the internet visual and accessible. As a journalism student close to graduation, I know that it would change my career, and it did in so many ways I never anticipated.

In 1996, I had my first proper digital journalism as a digital news editor at WWMT - a local TV station in Kalamazoo Michigan. The next year, I moved across the state to work as a special projects producer at Advance Local’s MLive. The next year - 1998 - I became the first digital journalist for the BBC outside of the UK, working in their flagship bureau in Washington DC.

But I was not the first wave of digital innovators by a long chalk. My friend Steve Yelvington was the founding editor of Star Tribune Online and has written about pre-internet online efforts by newspapers. He was building that service as I was exploring the web with Mosaic. And there was Roger Fidler, who I knew about by reputation but never had the honour of meeting. He envisioned a future of “tablets and e-readers” in 1981 and spent the early 90s trying to build that tablet at the Knight-Ridder Information Design Lab! This is to say that plenty of visionaries were already working towards a future of media before I had even left university.

Now 30 years later, the New York Times interviewed Fidler in “How the Media Industry Keeps Losing the Future”. "After decades of decline, their collapse seems to be accelerating,” writes technology reporter David Streitfeld, adding how Fidler “helped develop technology for lightweight tablets that would use flat-panel displays that were low cost but clear and bright with a relatively long battery life”.

What went wrong?

I was too narrowly focused. I didn’t consider all the possible cross impacts of emerging technologies that would lead to Craigslist, alternative news sites, social media and other products that would greatly diminish newspaper circulation and advertising revenue.

I was too narrowly focused as well. I thought the cost savings of digital distribution would open up a new era for journalism. However, if you save money but can’t earn it, it doesn’t matter. Your business will still fail. I started thinking about digital revenue at MLive, but then I went to the BBC. We had the luxury as a public media outlet to produce incredible, ground-breaking digital journalism without having to think about a business model. When I worked at The Guardian (2006-2010), it had an almost anti-commercial culture. I did not turn my attention back to thinking about revenue until I joined Gannett in 2014, and by that time, it was too late.

How we might regain the future

During the pandemic, I finally fulfilled a promise to myself and got my master’s degree in innovation, management and leadership. I try to apply what I learned to help media companies as the consulting director at Pugpig so that publishers, their reporters, product managers and the technical and commercial staff have a brighter future.

One way publishers need to adapt is to consider their marketing orientation, which is the process that a business engages in to identify and satisfy the needs of its customers. First, let’s discuss who the customer is. In As a journalist, we always thought our customers were our audiences, but when I started working in the industry in the US, 80% of our revenue came from advertisers. People seem to think that delivering eyeballs to advertisers is a recent development of the digital age that sullied the noble profession. When I was in journalism school, my professors were honest and said that subscription revenue paid for the cost of paper, ink, presses, and distribution but not our salaries.

I’m going to reference this incredible graph from 2016 by Thomas Baekdal. It tells the story quite clearly about what happened in the US.

Search and social media advertising became a much more effective way to reach audiences than newspaper ads. What would have happened had we poured as much innovation effort into the commercial side of media as we did into the editorial side? It was done in fits and starts. Gannett owns a digital media marketing company. The Dallas Morning News bought up several local digital marketing companies in the middle of the last decade. So much more should be done in terms of digital publishing commercial innovation.

However, with the major focus now on reader revenue, our readers are our customers, which brings me back to the concept of marketing orientation, I am going to focus on three: sales, product and market orientation.

  • A sales orientation focuses its energy on selling its product to its target audience. “In a way, it does prioritise its customers but not in a sense of listening to their needs and wants – it simply wants to sell to them,” according to Orientation Marketing.

  • A product orientation focuses on continually improving its products to deliver the highest quality product possible. “Premium products fall into this category, but the approach does not always offer what its target audience actually wants or considers the factors that the audience uses to form its purchasing decision,” Orientation Marketing says. The benchmark is competitors.

  • A market orientation considers the target audience before any product is created. Audience needs are taken into account. “Market orientation, in marketing strategy terms, commonly revolves around culture, values and other internal behaviours focused on satisfying customer needs that are usually well-researched prior,” Orientation Marketing adds.

The marketing orientations all have their pros and cons. A sales orientation can be effective when you have proven the product-market fit and have a relatively stable market environment. However, that isn’t the environment that newspapers have been operating in for decades. How long did we cling to a sales orientation? How long did we simply focus on selling what we had always done without listening to our audiences? Too long.

And how many times have I heard a product orientation from news leaders who thought that quality would always cut through? Reflexively saying that “content is king” has too often been used simply as a thought-terminating cliche. It rallies the troops. But what content? In which format? Delivered in what way? Recently, there was a discussion in an industry Slack in which an exasperated product manager asked if a podcast could gain an audience simply on quality alone. It was an assertion made by a producer where she worked. What arrogance! Such self-importance! It’s as if the audience is an afterthought and the only thing that is required is to produce something that passes exacting quality control based on journalism’s own professional standards.

For product managers who use tools like design thinking or jobs to be done, we have a market orientation. We ask who is the audience for this news product. We think of the audience in granular terms and consider their needs. We actively seek out quantitative and qualitative data, and we understand the variety of news and information needs that exist in our audiences. A good example is Schibsted, which sent three qualitative researchers on a road trip for a week to find out if people outside of the two main cities in Norway - Oslo and Bergen - had similar media habits. They have balanced editorial and algorithmic curation of their homepages based on a range of criteria. They understand that providing a homepage for the “average user” would present news that appeals to a white man in their 50s, and they want their homepage to meet the needs of the range of users and engagement levels that they know they have.

And we need to break down our internal silos so that editorial, commercial and technical can think broadly about how to solve the existential crisis facing journalism. We need this kind of collaboration to create products and revenue models that will pay living wages for the journalists, editors, sales staff, developers and other staff. ader revenue, a

And now onto things that caught my eye this week.

I start with a fascinating case study from Romania. It highlights how newsletters have become the MVP for media, and it is a rare examination of the revenue sources involved in local media start-ups, a mix of reader revenue, ads and grants. The case study also highlights how scrappy journalists have had to be to make a go of it over the last decade or so.

Three young leaders shared advice for meeting challenges including imposter syndrome and having to remake a media brand to help it move upmarket. I particularly enjoyed Aliya Itzkowitz of FT Strategies view on the value of voicing uncertainty. When you’re dealing with innovation, you have to deal with uncertainty and find a way to systematically work your way through it.

My former BBC colleague Alf Hermida has just released a paper with Seth Lewis and Samantha Lorenzo on Clay Christensen’s jobs-to-be-done framework and how it can be applied to improving the products of local journalism. This was a popular framework in the first decade of this century, and there were a lot of advocates of it, including Steve Yelvington who I mentioned before.

The FT seems to be going from strength-to-strength, and now it is prospecting for new opportunities with its own venture fund.

In AI news this week, OpenAI alleged that the New York Times hired someone to manipulate its systems to make it appear that it frequently plagiarised the newspaper’s material. It was a forceful response to the Times’ lawsuit.

Having worked in US public media for four years, this makes me sad. It was one of the early efforts by public media to move beyond its traditional audio and video content to provide local news in a digital-first way. It speaks to the challenges facing US public media in this soft ad market.