New business models for journalism

Photo: Danila D'Amico
Photo: Danila D’Amico

From crowdsourcing to memberships to micropayments, there’s a wave of experimentation happening at news outlets around the world as new and old media search for ways to survive in the marketplace.

During a Friday panel at the International Journalism Festival, Fortune magazine’s Mathew Ingram, Blendle founder Alexander Klöpping, De Correspondent publisher Ernst-Jan Pfauth, News Corp senior vice president Raju Narisetti and George Brock of City University’s journalism department debated new business models for journalism.

The so-called crisis of journalism, Brock said, “was not a crisis about the demand of the journalism, or indeed actually a crisis about the supply — it was a crisis about the business model.”

It isn’t a one model fits all world, but instead about experimenting with different methods and defining what success means for each outlet in question, Ingram said. An organisation’s business model will emerge from having a clear goal, showcasing passion for a specific topic and creating a relationship with the audience, he told the festival attendees.

“I don’t want to say it’s magic, but if you create that strong relationship with your readers, they will volunteer to give you money. They will figure out ways to give you money,” said Ingram, former senior writer of the recently shuttered tech site Gigaom.

“That’s what you’re monetizing – their trust in you. And if that’s not the first thing you’re doing, you’re going to fail,” he added.

Klöpping’s news outlet Blendle — which is currently in the Netherlands, but has plans to expand — grew from the idea that it was strange young people were willing to pay for movies and music with Netflix and Spotify or iTunes, for instance, but were “still not willing to pay for journalism.” So the goal was to build an outlet and get publishers on board to create a single-article payment system. Blendle has now been live for a year, and counts a quarter of a million users.

A huge part of the Blendle plan is the concept that if someone doesn’t like an article, they can get a refund. Although many publishers  — who are responsible for setting the price per piece, usually around 10 to 30 cents — balked at the idea at first and “thought we were crazy,” Klöpping said it has proven itself: Just 2-5 percent get refunded.

It works because people will spend money if they know in the back of their minds they could potentially get a refund, he noted, so readers “never feel screwed.” As for the articles that do the best on the site? Klöpping said readers are buying long-form pieces, analysis and opinion.

“What also doesn’t work quite well is clickbait,” he said. “People click on the stuff — but they ask for their money back.”

Blendle is expanding to other countries this year, he said, and has built a “portfolio of huge American and British companies” — The Economist, the Washington Post and The Wall Street Journal have all signed up, he said.

News Corp’s Narisetti said the use of Blendle for WSJ is really an “experiment,” and the company is most interested in seeing if individual stories lead to a conversion to subscribers to WSJ.

After all, Narisetti said, News Corp has “always believed in charging for our journalism” — and that remains the model. But that notion has expanded over the years, and now the company looks at its audiences in four distinct groups: visitors, readers, subscribers and members.

Understanding what the audience wants is key, and there’s long been the misguided notion in the news industry that understanding what readers like or don’t like “is below our profession,” he said.

“We’re stuck in that model and now we fight the notion that if we understand our readers and serve them better, that is somehow anti-good journalism,” he added.

For De Correspondent, which started with a crowdfunding campaign in the Netherlands, the driving force is “to fully focus on the needs of our members” without taking any other traditional stakeholders, such as advertisers, into account, Pfauth said.

“At De Correspondent, we have a really complicated business model — we make the journalism we believe in, and our members pay for it,” he said to laughter in the room.

Members, who pay 60 euros a year, are seen as “contributing experts” who operate along with the site’s journalists, dubbed “conversation leaders” by Pfauth. And reporters decide what to write about, not data, he said, adding that if he looked at the data the news outlet would cut less read stories about the European Union or forgotten wars, for instance.

“I would never make cutbacks based on data…I would ask the editor in chief which subject isn’t that important and we should let go,” he said.

But Narisetti said it’s time for data to stop being a dirty word in journalism.

“The fundamental problem with our industry is the disdain for data, which is essentially what our audience wants,” he said.

Instead of running journalism on what he dubbed the “tummy compass,” or just the gut feeling of those in the business, Narisetti said it’s critical to “use data to improve the engagement on a story that you think is important.”

And the notion that advertising is a nuisance is something News Corp rejects, he added — it’s all about having “as many streams of revenue as possible.”

Meanwhile, for those looking to start new media ventures or reshape their publications, Pfauth offered up his philosophy: “You’re not starting a publication, you’re starting a movement,” he said.

And that movement will potentially move abroad, he said, with De Correspondent thinking about a possible launch in the United States in 2016, for instance.

Change is ahead for Blendle as well, Klöpping said, and they’re looking to see what happens when they take the micropayment platform outside of Holland and into places like the US or the UK, where things are based more on credit card payments that could add on fees for the pay-per-view model.

It’s all about approaching your business model with a sense of experimentation and flexibility, he said. Much like the idea for offering readers refunds came about from a random Friday afternoon meeting, another new concept could come along that completely changes and redefines the product, Klöpping told the crowd.

“That mind set is very fun,” he said. “I have a lot of fun doing what we’re doing. And that’s in [part] because we’re willing to experiment so much. It’s a fun thing to do and I wish it to everyone to be able to do that.”

In short, what’s it all about for new business models for journalism?

“Permanent revolution,” Brock said.