This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.
Author: Ignacio Bugueño Vilches, Impact Director, Latam4 and Global Shaper, Santiago Hub, World Economic Forum
- The media industry was hit hard by the economic decline triggered by COVID-19, but the pandemic also accelerated digitalization and pushed journalists to become independent content creators.
- The rise of platforms like Substack and Supercast is giving correspondents unprecedented ways to monetize their direct relationships with audiences.
- This is enabling reporters and writers to create super-invested communities around their local realities or niche interests.
- Independent, small-scale journalism can thrive in a content-driven world lead by amateur YouTubers and podcasters, creating new opportunities for cross-collaboration.
Paid subscriptions to content creators on platforms like Twitch, YouTube, and even Only Fans, have soared, even as the economic contraction occasioned by the COVID-19 pandemic hit the global media industry hard.
In September 2020, Accenture forecasted that monthly global household expenditure on media and entertainment in 2022 is predicted to be 30-40% less, due to the COVID-19 pandemic. This was also captured by the World Economic Forum’s Future of Media report, which reported accelerated levels of consumption of digital media as traditional channels declined.
Traditional journalism industry risks becoming a casualty of the digital transformation, in what could be a profound and permanent shift in how news is reported. Platforms like Substack, a newsletter distribution system where reporters can cut out the middleman and create paid publications for their audiences; and Supercast, a Vancouver-based startup that provides similar services but for podcasts, are giving journalists the tools to create content in the same arena where YouTubers and streamers are thriving.
Even social media giants like Facebook and Twitter, which rely on a content-sharing model on platforms where they can subject news to their algorithms, are working on paid services for professional journalists.
Lagging legacy media
More than 37 thousand reporters lost their jobs in the US during 2020. In Chile, the second-largest newspaper ended its daily print run opting to publish only on weekends.
But it’s not only media owners who have been hard hit, journalists have suffered too. The Journalism and the Pandemic Project – a collaborative research initiative from the International Center for Journalists (ICFJ) and the Tow Center for Digital Journalism at Columbia University, conducted a survey that identified financial hardship as a significant difficulty for 67% of reporters, globally.
These things were happening as the media industry struggled to navigate social unrest, fake news, and political polarization. And the Edelman Trust Barometer found that in 2021, traditional media became less trusted than both government and business.
Meanwhile, Substack doubled its number of paid subscribers between December 2020 and February 2021, with its top ten writers making more than $15 million a year combined. Prominent authors like Matt Taibbi from Rolling Stone Magazine, Andrew Sullivan from the New York Magazine and Emily Atkin from The New Republic, have left their employers to launch their own paid newsletters.
Generating revenue has never been easy for independent journalists, who are often occupied with finding sources, chasing news, and producing content. Usually, when they become independent content creators, they must first reach one thousand subscribers before they begin to gain traction; this usually takes months of working on a newsletter or podcast.
But this new wave of platforms allows creators to monetize their followers, capitalize on personal trust, and give back to their curated communities by establishing the kind of direct relationship that is not usually possible within traditional media spaces. Platforms such as Ghost – another newsletter platform – and Substack, also allow authors to keep their own subscriber lists, own their payment accounts and all the content they produce.
No advertising
Perhaps the most overlooked advantage of this new model is the absence of advertising. These platforms are completely audience-facing which allows readers, listeners, and viewers to support independent journalism directly.
This is an innovative model because journalists have the independence to engage freely and creatively with their audiences and communities, which is something that doesn’t happen often in traditional newsrooms where editors are beholden to such metrics as page views.
What is the World Economic Forum doing to measure the value in media?
The Fourth Industrial Revolution has changed the way content is produced, distributed and consumed for media companies, brands and individuals.
The media industry today is characterized by so-called “destination” and “ecosystem” media. The former are content destinations for consumers, while the latter use content as a strategic asset in a bigger portfolio of products and services. They offer relatively low-price media services as drivers to monetize other parts of their business, such as e-commerce, transactions, live experiences, affiliate sales or branded media.
Media production and distribution creates economic value along its sectoral production chains. It also does so through these ecosystems, increasingly owned and managed by “supercompetitors”. How should society measure and value their impact?
This project, Value in Media, has spent a year looking at how individual consumers value destination media. It has analyzed business model strategies in the media industry, studied the extent to which these strategies align with people’s preferences around payment and data management, and discussed areas for the industry to focus on in improving its value proposition to society.
Building on this research, the project is now in a second phase that attempts to measure the value that ecosystem media generate in society. It will look specifically at:
- A cost-benefit analysis of ecosystem economics in media
- Developing a framework for new indicators of value such as quality, innovation and consumer welfare
- Identifying metrics that better represent the value of media to society, including its contribution to related activities such as retail, e-commerce and consumer industries
This is in keeping with how young people now consume news: according to the Reuters Institute 2021 Digital News Report, almost 40% of people under 35 pay most of their attention to internet personalities when consuming news.
The chance for any reader, viewer, or listener to write to a journalist for feedback and engage in a way that offers them a palpable stake in the news is a powerful perk that is worth paying for.
A healthy news ecosystem is crucial to our democracies. We need independent journalism that is capable of fact-checking, giving informed commentary, and sharing diverse views, but also journalism that can connect and resonate with audiences. Most importantly, we need journalism that is sustainable for journalists themselves. This is more within our reach than it has ever been.
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