News Publishers Find Digital Customers Tough Nut To Crack

Michael Hedges June 19, 2019 Follow on Twitter

The endless - and useless - war between legacy news publishers and the tech world has several battlefields. "Both sides are good people," to quote a well-known media phenomenon out of context. News, and the publishers who deliver it, earned high esteem for informing the public. With that came lots of money. That started slipping away half a century ago. By the time publishers noticed, internet technologies had redesigned distribution of information and just about everything else. That, too, came with lots of money.

Early last week (June 10), publisher trade body News Media Alliance (NMA) unleashed its latest campaign against IT companies, generally; Google, specifically. The release, gleefully reprinted by its members, continued the narrative that “their” money has been unfairly appropriated by those scoundrels in Silicon Valley, or nearby, or not so nearby. “Google Made US$4.7 Billion From The News Industry In 2018,” said the headline.

This particular campaign was not meant to motivate the general public into scolding their neighborhood media buyers for sending too much ad money to Google. There are no media buyers any more. Programmatic ad sales comes from bots, developed by other clever code writers. This campaign was directed at the United States Congress in hopes of relaxing anti-trust laws to allow publishers, in concert, direct negotiation for ad sales and content rights.

The NMAs press release drew an immediate scolding from journalism advocates who know very well that Google News does not carry ads and search engines are like the corner kiosk of yore bringing eyeballs to websites through links, affording publishers the opportunity to troll that traffic for ads or subscribers. The “$4.7 billion” claim was quickly debunked, journalists in the post-modern age being adept at ferreting out disinformation, formerly known as fake news. It was derived from an offhanded comment made by Google VP Marissa Mayer in 2008. “It’s based on math reasoning that would be embarrassing from a bright middle schooler,” wrote Joshua Benton at Nieman Journalism Lab (June 10). Another observer suggested publishers should be paying Google for referrals.

Meanwhile, a slew of major advertisers, ad agencies and, yes, digital platforms met this week at the Cannes Lions International Festival of Creativity (Cannes Ad Fest) to announce their own alliance. The Global Alliance for Responsible Media intends to “protect people and brands from nefarious content,” reported Axios (June 17). It is also, and more significantly, to lobby governments on content regulation. Not many media companies have signed up, just NBCUniversal and Verizon.

Also last week the very big Reuters Institute for the Study of Journalism at the University of Oxford (Reuters Institute) Digital News Report 2019 came forth. For news publishers banking on paywalls to offset lost advertising revenues, it is either utterly depressing or reason enough to push harder for protective regulation. “Much of the population is perfectly happy with the news that they can access for free and even amongst those who are willing to pay, the majority are only willing to sign up for one subscription,” said Reuters Institute director Rasmus Kleis Nielsen, quoted by Reuters (June 12).

“In some countries, subscription fatigue may also be setting in, with the majority preferring to spend their limited budget on entertainment rather than news,” said Reuters Institute senior researcher Nic Newman. “Not surprisingly, news comes low down the list when compared with other services such as Netflix and Spotify – especially for the younger half of the population.” For the Digital News Report 2019 77,000 people in 38 countries were interviewed. Across that broad expanse, 6% subscribe to news sources, unchanged year on year, and 37% subscribe to video services. Also, news subscribers tend to be better educated and better off financially.

A significant digital advantage across all business sectors is attachment - at least superficially - to customers. It is part of every executive conversation. Digital disruption has been widespread but new technologies did not make it happen. “The most common and pervasive pattern of disruption is driven by customers,” writes Harvard Business School professor and digital disruption specialist Thales S. Teixeira in the Harvard Business Review (June 6). “They are the ones behind the decisions to adopt or reject new technologies or new products.”

“Disruption is a customer-driven phenomenon,” he concludes. “New technologies come and go. The ones that stick around are those the consumers choose to adopt. That is the basis of modern disruption in a nutshell.”

See also...

• Hot Topics - Digital Transition

• Hot Topics - Paywalls

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