The Evolution of News

It's not news that digital publishers have had more than their fair share of challenges in the shift from print to digital. In fact, journalism this year has had the most layoffs since the recession - reporters are actually losing jobs at a faster rate than coal miners under Trump. The industry is undergoing dramatic changes, but there may be a light appearing at the of the tunnel.


To great fanfare, Apple announced Apple News Plus, a $10 / month product that would provide unlimited access to publisher content. Apple would effectively serve as a massive aggregator of subscription revenue, splitting it 50/50 between Apple and all the three hundred publishers on the platform - including WSJ, NY Magazine and Vox (notably not the NY Times and Washington Post), with the allocation determined by content consumption. The publishing industry fretted that this was an unfair revshare and that it would it spur publishers to focus even more on click-bait articles and headlines to increase their allocations. Instead, Apple News Plus has substantially failed to gain traction - performing at around 5% of the projections Apple gave to publishers. With such limited traction and with the significant constraints on their model imposed by Apple News Plus, publishers have started to seriously doubt the platform. In response, Apple appears to be listening to publishers and building a product that more directly serve their needs as well as those of their consumers.

On the other hand, Facebook historically served as a driver of referral traffic to publishers. As part of its Time Well Spent initiative, the company significantly reduced publishers' organic reach. This has had a massively negative impact on the news industry, not to mention the economics of branded content. But now Facebook is getting back into news with rumors of a dedicated News tab. The actual product is unclear, but there are expectations that publishers would keep all of the revenue from subscriptions they sell. While the economics are more enticing, Facebook will have significant trust issues to overcome with both publishers and users. But the News tab would need to actually be successful. Given the limited success of the Watch tab, many are dubious. But Facebook is actively working with publishers with a more partnerships-oriented disposition than it has in the past.

Meanwhile, Digital Content Next, a digital publisher lobbying group, released a study showing the publishers they work with have grown non-advertising revenue at a rate faster than advertising revenue - changing their share from 80/20 to 77/23 in favor of ad revenue. The numbers are similar even if you remove the top three publishers for digital subscriptions (NY Times, WSJ and Financial Times). Even without these three, the majority of the revenue growth comes from subscriptions.

Finally, one could argue that the shift towards privacy benefits publishers. This is a contentious claim, but the idea is that programmatic incentivized a shift towards audience-based buying in which marketers abandoned any concern around the nature of the publishers and simply found their audience as cheaply as possible on the open exchange. Cookies slowly crumble - either technically or through regulation - and buyers slowly pull back from unknown publishers on the open exchange due to fraud concerns, targeting those known for quality and context. Thus the pendulum is slowly swinging back to high quality digital publishers.

As the above anecdotes show, there are several outstanding issues that remain. Yet, with the appropriate rose-colored glasses, even the first three can be viewed as green shoots. Publishers are right-sizing for the digital economy and platforms that previously dismissed the interests of publishers are now consulting them closely. Publishers are working with the platforms to add subscription revenue, and are iterating in a way that enables their continued growth. If nothing else, the current administration has underscored the value of a vibrant and independent journalism industry. Platforms have come to understand their roles in sustaining this industry beyond lip service - and the industry is embracing different ideas and working to be nimble. It is likely we will continue to see stories like the above as platforms, publishers, and consumers continue to rethink their relationship with news.