News is something someone wants suppressed. Everything else is just advertising.
– Lord Northcliff
In my first blog post, I lamented the deteriorating quality of journalism because of the rise “free” media on the Internet. As Starkman points out, we are placing our “faith in the wisdom of crowds and citizen journalism, in volunteerism over professionalism”. Indeed according to the likes of Shirky and Jarvis, the investigative journalism prized by Starkman – the “something someone wants suppressed” – is giving way to peer production.
In many ways, true investigative journalism keeps us honest, and I for one am not willing to see it fall by the wayside. So where to from here? Well, one model I would look to is that of the research department within an investment bank. It is a curious part of the bank because it does not directly generate revenue. Clients do not pay per a research piece published; yet the research department often outsizes the sales team in headcount. And it is not that clients do not value the research – they use the insights published by analysts to make informed investment decisions. Instead, clients indirectly pay for research by channeling commissions to the investment banks whose research notes they value. In other words, research exists because the sales team can monetize their work, and by the same token, the sales team exists because research gives them an edge.
There are four key elements of this business model that we can apply to new media.
Focused, high quality content
First and foremost, it is the analysis that matters. Research analysts are typically organized into sector teams, for example, financial institutions or resources, and their deep knowledge of the subject matter and their relationships with key industry players gives them an edge. Similarly, new media players such as Quartz are focusing on “obsessions” to give them focus.
Research analysts burn the midnight oil during reporting season in an effort to release their response to companies’ earnings announcements in a timely matter. Vox’s innovative content management system enables journalists to do just that – create user-friendly content on the fly.
Banks often have multiple sector teams to ensure that they can deliver comprehensive coverage of the market they cover. The sheer volume of content on the Internet overwhelms readers and it is increasingly important that media outlets become a one-stop-shop. For example, Vox has added The Verge, Easter and Curbed in the last five years.
Keep it free, but get paid!
So long as there is the “possibility that other people might do what they [journalists] do, for no pay”, it will be difficult to monetize newspaper articles solely from publication. While third party advertisers support newspaper revenues, it is the end user who pays the research department via the sales team. In some cases, commissions are “tagged” with a specific name to recognise the good work of a research analyst.
While advertisers will probably continue to be a source of revenue, I think it is time to look beyond that and test models that make the reader pay. Some examples are already out there, such as Quartz’s conferences and Politico’s premium subscription. I suspect the business model will hinge on a high quality, free “basic” media outlet with paid additions such as in-depth analysis, extra offerings and delivery format. Or perhaps there is some sort of specialised information offering alongside the news outlet, as Bloomberg does. While I do not have the answer (otherwise I would be starting my own media company!), there are plenty of smart minds tackling this very question and I would urge them to think outside the ads.