Ben Thompson from Stratechery has written an excellent three part series on the future of journalism. The following is an excerpt from part 3.
BUSINESS MODELS OF THE FUTURE
The reason why I find business models so fascinating is because your business model is your destiny; newspapers made their bed with advertisers, and when advertisers left for a better product, the newspaper was doomed. To change destiny, journalists need to fundamentally rethink their business:
- More and more journalism will be small endeavors, often with only a single writer. The writer will have a narrow focus and be an expert in the field they cover. Distribution will be free (a website), and most marketing will be done through social channels. The main cost will be the writer’s salary.
- Monetization will come from dedicated readers around the world through a freemium model; primary content will be free, with increased access to further discussions,3 additional writing, data, the author, etc. available for-pay.
- A small number of dedicated news organizations focused on hard news (including the “Baghdad bureau”) will survive after a difficult transition to a business model primarily focused on subscriptions, with premium advertising4 as a secondary line of revenue. This is the opposite of the traditional model, where advertising is the primary source of revenue, with subscriptions secondary.
This transition will be a painful one: the number of traditional journalists and newspapers will decrease dramatically. Moreover, those that succeed will need to have a much expanded skillset from journalists of yore, including basic website management, self-promotion, business skills, speaking ability, etc. (teaching these skills is an important opportunity for journalism schools). What is sure to be most frightening – or exciting, depending on your outlook – is that the market will, for the first time in the history of news, be the ultimate arbiter of what writers are worthwhile.
I know that last sentence sent chills down the spine of many a journalist and many a reader; you believe that people only care about the popcorn, not the movie. That no one will cover the local school board, or the Crimea. If you’re nodding your head, then I have a challenge for both of you:
- For the journalist, do you believe that your work is valuable? Then start a blog, and start experimenting with business models. Go door-to-door or start a kickstarter. If you think it’s hopeless, then get out now. There will be a few big winners, but it won’t be you.
- For the reader, how often do you visit the New York Times or the Wall Street Journal? Do you pay? Do you love tech? Well, then, have you even considered trying out The Information? It’s exceedingly easy to sit on the sidelines laughing at journalists freaking out about the end of the newspaper, but if you always go for free you will, eventually, get exactly what you pay for.
I don’t think the future of news is an easy problem; my solution, such that it is, entails the death of journalism as we know it (i.e. employed by newspapers). But that’s exactly how new business models are born: a thousand new flowers in the burnt-out forest of what no longer works.
Read the article here