By Belén Sánchez
The digital era has brought innovation and is allowing collaboration without precedents in the media industry. For example, the publication of the Panama Papers, the biggest financial information leak we have witnessed in decades, was feasible because digital technologies allowed collaboration of approximately 400 journalists around the world. Inevitably, innovation is also changing several dynamics of what we used to know as traditional journalism. For example, the spread of Internet connectivity allows any citizen to be continuously connected to the grid at a lower cost. This dynamic has generated a fragmentation of the mass audiences; and social media and crowdsourcing applications facilitate engagement of amateur journalists and an abundance of data processed at a high
speed by algorithms.
The digital age may also lead to the downfall of many news organizations. A third to a half of the 50 largest metropolitan papers in the US will have to close their businesses if their revenue keeps shrinking and pre-printing advertisements keeps declining as it has during the last few years, says Professor Nicco Mele on a recent podcast of the Schorenstein Center, the media and politics research institute run by the Harvard Kennedy School. This has been forcing the journalism industry, specially newspapers, to undertake an unavoidable transformation of their business models. In the report Post-Industrial Journalism, Anderson, Bell and Shirky, explain that the transformation of the traditional business model of news companies is guided by the inability to keep subsidizing the news room with advertising dollars. This shift on the revenue sources is not only demanding reduction of costs but also the restructuring of organizational models and processes. Additionally, news organizations are no longer in control of the news, as they have normally understood, and the ecosystem in which they operate is in constant flux.
Not everybody has succeeded in this transformation. For instance, Rocky Mountain News – Colorado´s oldest newspaper- closed in 2009 after their attempts to adapt to the digital era. Reading about the different strategies that several news companies have been implementing, reveals that news firms have been focusing on reduced scopes of the challenges they have been facing. For instance, for the President of The Associated Press Tom Curley, content was the most crucial aspect that journalist needed improve to guarantee survival in the digital era. For Robert Murdoch, CEO of News Corps, the separation of publishing and entertaining business was the key for success. And for Bill Keller, Executive Director of the New York Times, the worldwide corps of trained and skilled reporters and the rigorous standards for accuracy would be barriers for an expansion and acceptance of the new digital newcomers.
The challenges of the news industry are also affecting Ecuador. In 2014, Diario El Hoy also closed its operations, part of the reasons was how hard it was to raise revenues in an industry with a progressive deterioration of audiences for printing press. Yet new local start ups are redefining the dynamics and roles among the different actors in the news ecosystem. For instance, Gkillcity.com is combining the ideas of bringing together a big pool of contributors like the Huffington Post does, plus the tone and perspective that Vice uses and the internet blogging model of Vox.
How can news firms redesign their business models, or how can new entrepreneurs design financially viable models that are able to make technology an ally instead of a barrier? Here is a list of considerations that have been highlighted by some of the most well-known open web advocates, digital media experts and journalists, including Jeff Jarvis, Dan Gilmor, Emily Bell, C.W. Anderson and Clay Shirky, that could facilitate the adaptation to the digital era of news firms.
- News firms can take advantage of the new opportunities and integrate them in the business model. Journalists have now access to far more information and they have new tools for creating visual and interactive content, they have new massive channels to reach audiences (Twitter, Facebook).
- Diversify the income sources. Think beyond advertisement, and consider sponsors, users, donors and philanthropists as revenue sources.
- Printing presses are terrifically expensive to set up and to run. To run away from this high cost model, news firms can start reducing costs through collaboration with other partners, outsourcing, crowdsourcing and automation.
- Use the power of peer-production since it lowers costs of organizing, communicating and sharing. News firms need to be open to collaboration with the increasing number of amateurs, part-time practitioners and volunteers who engage in news production.