The ailing news media industry needs to do more than just survive (Part 6)
In the final article of the series “Slaying the media sustainability monster,” I look at the role of and importance of technology as a critical part of the solution. The series so far has touched on the input and ability of various role players in the ecosystem. From governments providing tax-breaks and investment incentives to reclaiming lost talent and pushing leaders to upskill, a problem of this magnitude and societal impact will require a multi-pronged approach. Underpinning all of these efforts will be the successful implementation and execution of data and technology.
Covid-19 has made it clear that any organisation with medium-to-large aspirations should consider data and technology as foundational requirements. As traditional publishers migrated from legacy channels to digital, systems, processes and people had to align to with the new “digital-first” approach. Those who were late to the party, and those hung on to the past, are still counting the cost — if they even exist to count the cost. As the full impact of lockdown hit last year, some titles and entire media organisations cease to be. While the death certificate may say “Covid-19” the real cause of death was their inability to migrate and cope with the demands of digital publishing.
A spectacular case study of an organisation that reinvented itself is the New York Times, once again, the poster child of the news media world. But in 2014, things weren’t looking so great for the Grey Lady. Online readership was lagging behind digital upstarts like Buzzfeed and Huffington Post. Digital subscription growth was negative and the coming tsunami was becoming louder as it grew ever closer. The organisation, to the credit of its leadership team, produced what is now considered the seminal document of the digital era; The New York Times Innovation Report that laid bare its shortcomings with recommendations that centred largely on shedding its print-first DNA, and embracing data and digital as the primary way of operating.
Just 6 years later, the NYT is crushing it with 7m digital subscribers, almost $1bn in cash and the biggest newsroom in its 169-year history. What is interesting to note, is that 1700 editorial staff are supported by 700 people in product and technology. Clearly, to play at the highest level, huge investments in skills and the right tech stack are now table stakes.
As with everything in life, the problem is a little more complex than just throwing money at the (technology aspect of the) problem.
Yes, we need to incentivise greater investment in the tech space, lure data scientists, product designers and engineers away from high-paying corporates but we also need to remind ourselves that tech is an enabler or accelerator of where true innovation stems from: business model enhancements.
While it can be argued that the great disruption of our time comes from technological capabilities of companies like Google, Facebook and Amazon, a closer look will reveal their ability to better serve the needs of audiences by use of data and technology is actually a better framing of the argument. In his book “Unlocking the customer value chain”, Harvard Business School Professor Thales Teixeira and Greg Piechota, argue that innovation occurs when taking a traditional business model, moving it online and layering it with new features that could only exist in digital format.
He argues the great tech companies of our time, were ones that broke down the customer value chain and identified the components that could be decoupled and monetised through value creation. For example, much shade is thrown the way of Facebook and Google as the primary hijackers of advertising revenue from news publishers. But the original body blow was dealt by Craigslist and spin-offs like Gumtree and Cars.com, who took the traditional classifieds business online, improved it and swallowed up the 25% of revenue newspapers once claimed as their own. Newspapers could have led the way on innovating in the classifieds space had they shown a greater understanding of the needs of classifieds users, and embraced technology to evolve the business model.
So, in order to tackle the sustainability problem, our approach to technology (as with journalism itself) must be needs-driven, and always in the pursuit of new value-creating innovations enabled by data and technology. Technology, alone, is not the saviour. It’s the foundation and the utilities that provide the spark to innovative models serving audience needs.
Struggling media houses will find making these leaps difficult amid reducing revenues and exodus of talent. Google, for all the gnashing by media practitioners, has through it’s News Initiative programme, funded innovation projects, developed products and partnered with media houses. Daily Maverick was lucky to be included as one of two South African grantees on a project we otherwise could never afford to experiment on - a similar case for many others around the world. What we need is more of this kind of funding access, with specific innovation mandate, to enable more of news publishers sitting at the high roller table. For that, we need government support or some other global news superfund to assist in the recovery phase that we face in the next 5–10 years.
