The Future Of News seminars

Property and profit: independent online journalism

This was a surprisingly positive evening that seemed to suggest that given a lot of hard work and aptitude it is possible for an independent journalism business to survive and thrive.

Much of the attention recently has been on how larger mainstream media companies have struggled economically in the face of online competition. It’s a familiar tale of fracturing audiences and vanishing advertising. But the threat has been largely from non-journalistic new media alternatives. YouTube or MySpace are bigger threats to mainstream news than Google News, let along the millions of individual bloggers out there. Both the BBC and Reuters, for example, have gone online and now promise to be as market-dominant digitally as they were before. This is a good thing in that it preserves two of the most respected journalistic organisations in the world. However, surely the internet promised almost limitless diversity? We know there is now citizen journalism, bloggers, and user generated content. But is there a place in the online news market for independent small journalism businesses that actually make a living for at least one person? And can they do it by providing an information or analysis service that isn’t simply producing commentary, consultancy or technical help for web-based business? And could those independent journalism outfits ever grow to offer serious competition in the mid or long-term to the recognised news brands? Let us start in Norwich.

Rick Waghorn, www.rickwaghorn.co.uk is something of a cause celebre. The former Norwich Evening News sports reporter has set up a website devoted to reporting Norwich City FC. He secures banner advertising through an old ad-sales colleague and pays the Canaries for access to the club. It works because he is very hard-working, knows the club, players and fans and because unlike rival newspaper sports web-pages, he doesn’t have to prioritise the paper:

“You have to start from the premise that you don’t actually own the news. A football club’s biggest commodity is their ability to generate news, so their websites, driven as news organisations, will make sure the news appear there first. You just roll out with comment, analysis, informed debate, and your readers will recognise the product. There are lots of journalists who may know more about national football or about England, but nobody will know more about Norwich football than me. Punters know I have a personal relation with a team.”
(Rick Waghorn)

He is planning to roll out the formula across the provincial club sides of the football league. Thanks partly to Norwich striker Darren Huckerby’s wife need for skip-hire, Rick has been able to convince local businesses who know nothing about the web that it pays to advertise on-line.

But for businesses like Rick’s to really benefit from the network effect of the long tail as opposed to a very niche local market, they need to follow some of the advice from Richard Ayers of Magic Lantern:

“There are several business models but not very many work. Niche market works. ISPs and portals like MSN or AOL are the broadcasters of the Internet. When there is a mechanism to pay back contributors, citizen journalism will also start working and will become meaningful. The quality will rise, the good people will come to the top and they will be paid back. If you want scale you need marketing. You want marketing, you either have big-bucks/spending funding or you need a partner. And this leads back to portals like Tiscali, MSN, Sky. Portal sites shouldn’t exist. We were talking about ten years ago they would die soon, because everybody was going to have their list of favourites, they would understand the quality of journalism and they would go where they wanted, or they would use search engines and go and find it. And yet, they make millions of pounds a year. It’s a tight business, but it’s about scale and that means the next key step in the future of journalim is ditribution - and that means understanding the needs of the distributors and making those models work for you.”
(Richard Ayers, Magic Lantern)

So scale in online journalism is all about networking. Put your niche product in front of as many people who are likely to want it as possible. Then put your niche networked product in front of as many advertisers as possible via a search engine or another mechanism that goes beyond clicking through banners. Best of all get your niche blog partnered with a major brand. The clever big brands realise it could be in their interest to sustain their small /competitors rather than strangle them. As Mike Butcher from mbites said, it is what the customer wants:

“A few years ago bloggers had trouble getting traffic other than from other bloggers. Now is also about being part of the network, there is a network effect. The generation that is growing up now understand this kind of media and in five years time they will go on, say, the BBC website, and if you haven’t got the links to blogs that they know about already then they are going to be very disappointed.”
(Mike Butcher, mbites)

But does this pay for the little guys? Robert Proctor of Adify has a product to sell but he believes that systems like Adify which allow ‘vertical’ advertising is one way forward to make big payers work for the small operators:

“The main problem for big publishers wanting to go in the direction of blogging and user-generated content is to organise, manage and pay the creators of niche products.
What the blogroll system allows to do is to sign up hundreds of blogs on different channels. The back-end system then controls all the banner delivery, all the tagging, all the optimisation, and it also pays the different bloggers. The buyer can now go to one single place for their advertising, and bloggers get to talk to the big companies.”
(Robert Proctor, Adify)

But Robert Proctor accepts that it may not work for everyone:

“It’s ok for big organisation to link to small blogs because they don’t need to make a profit from them – and it’s certainly ok for the BBC which doesn’t need to make a profit at all, but a lot of other businesses are going to say, “ why should I link to this guy when they are going to go off and never be seen again and I am going to lose my ad revenue? which his why you need advertising that is vertical.”

And as Reuters accepted, they are happy to do deals with bloggers, but there isn’t a huge amount of revenue going to their new-found tiny partners in terms of payments:

“Reuters have one major relationship with an organisation called Global Voices, which pulls in bloggers from all over the world and that helps them to develop their business further.
At Reuters there is the view now that if people that you go on your website get a good link to other news sources or blogs they will come back because they know they will find the best news via Reuters. We are also looking at ways of incorporating niche businesses like Rick Waghorn’s, but overall whether the individual blogger will get paid I doubt it, not in the near future, at least.“
(Astrid Zweynert, Online Editor, Reuters)

As Richard Ayers of Lantern Media pointed out, this relationship could have very positive journalistic effects as the so-called ‘grass-roots’ media combines with the major news-gathering organisations:

"What should be happening is that BBC News Online write a story about something that is happening and then make sure that it links like crazy to all the other bloggers, so those people stop being ‘down there’ and are actually much closer. "
(Richard Ayers, Magic Lantern)

Big Media like the BBC and Reuters agree it is the way forward. Editorially, the BBC is in full support as their online editor Steve Herrmann made clear:

"That’s the kind of approach that we do want, other news sites talking about one story. We certainly should and certainly will be linking out to bloggers in a large-scale, scalable way”. It’s more about logistics than editorial really."
(Steve Herrmann, Editor, BBC Online)

And our group of experts seem to feel that there is room for expansion with a lot of middle rank mainstream media still ripe for a challenge from online entrepreneurs:

“The mid market publishers, regional papers and niche off-line business titles are the soft underbelly of the media and the long tail nimble low cost publishers like Rick Waghon are ready for attack.”
(Mike Butcher, mbites)

There are still technical issues around all this. As David Lane from IBM pointed out, there is still no reliable or generally accepted measure of internet traffic. And as Lawrence Gosling of Incisive Media said it raises the much bigger issue of what we define as news in an age of massive information and social networking flows. But overall it suggests that the smaller editorial entrepreneur stands a better chance than ever before. And they don’t all have to conform to the lowest common denominator either.

Tony Curzon Price is an odd chief executive officer. He talks like a businessman but actually runs a very high-brow, high-content journalistic website OpenDemocracy.net that has long learned articles on international politics. It’s almost the opposite of Rick Waghorn. But Curzon says the online market works for them:

“Our articles are very editorialised. We position ourselves against Global Voices because we think that it’s a bubble not news. We sympathise very strongly with the view that when people come to a source on the web that what they want is something like newspapers – some structured information that has got some indication that you can trust it and an indication that it’s been worked on. We have 3 million unique users a year and what they are after authenticity. One of the most exciting things is that when people give us money they say that ‘the media is manipulated so we need to give you money”. My favourite was when someone who sent $50, said we were ‘the only free website worth paying for”.
(Tony Curzon-Price, OpenDemocracy.net)

Curzon-Price thinks that their donation/donor system is in fact a market transaction that could be emulated by others:

We have insiders all over the place who have ideas and things to say. And we’ve got 3 million minds who are interested. The business model is that we broker ideas to minds. Those 3 million people are the equivalent of advertisers and they will pay a premium. 10 “people” cover 90% of our costs – they are mainly American foundations. It’s a commercial model because it pays my salary and many others. It is extremely commercial; we are selling minds to foundations”.
(Tony Curzon-Price, OpenDemocracy.net)

However, it took an online entrepreneur from the edge of journalism to inject a note of caution. Angel Brown of Boxnewmedia still believes that in the drive to satisfy the hunger of the younger generation of online users we may be losing quality and real choice:

We are talking about plurality but I can see that not a lot has changed. I do a lot of work in the news industry and it’s like we are creating a lot of replicates striving for a chance of a shot at fame, while the big boys are still the ones on top –there is a big gap.”
(Angel Brown, Boxnewmedia)

Conclusion:

I think that it is still right to ask tough questions about the kind of online journalism that will emerge from this period of extraordinary transition. If the internet is to realise its full potential it should allow independents to be more than digital stringers from the real world for the major organisations. If the market is to be truly vibrant it must allow minnows to grow in to media sharks, just as small TV production houses have become major broadcast players. The market needs that injection of innovation and competition. But it also needs pluralism to reflect the diversity of modern life. A connected diversity, a networked journalism that allows the major news brands to thrive while helping to sustain a real variety of news models would be my ideal outcome. In our next seminar we will be looking at the actual content of online journalism, which after all, is supposedly what we are really here for.

Charlie Beckett
Director, POLIS