Yesterday afternoon, Saturday 9 September, I attended a Brisbane Writers Festival panel discussion “The Media in Dangerous Times” at the State Library of Queensland. The topic was “how news organisations are responding to the threat of Fake News and the formation of filter bubbles through social media algorithms and knowledge curation.” Griffith Review editor Julianne Schultz chaired the panel, which comprised Guardian Australia Editor Lenore Taylor, UQ academic Daniel Angus, and Griffith academic Susan Forde.
Guardian Australia editor Lenore Taylor providing great insight into media trends at the Brisbane Writers Festival
Based on the discussion in the session, in my view it will be difficult to reverse the trend of fake news and filter bubbles, of people getting a highly curated news feed consistent with their existing world views. Also, for me, the session reinforced the dismal economic outlook for many traditional media providers. Even though established news providers, such as the Guardian and the Australian, have a very large readership online, there is such competition for online advertising revenue that such revenue is insufficient for news organisations to be profitable, given the high cost of gathering and reporting the news.
It is well known that both Fairfax and News Corporation are struggling. News Corporation recently reported a yearly loss of over $800 million, after having written down the value of its UK and Australian newspapers by $1 billion (see this ABC News report). Both Fairfax and News Corporation’s Australian division are highly dependent on their online real estate advertising arms, domain.com.au and real.estate.com.au, meaning both companies would be vulnerable to a future property market slump.
Unfortunately for the traditional media providers, online ad revenue is increasingly being lost to Google and Facebook, which benefit from the news articles generated by the media providers, as people either search for them via Google or view them via Facebook. Also, click bait and fake news are taking away readers and ad revenue from quality journalism. So many media providers, including News Corporation, the New York Times and Financial Times (FT) among others, have embraced paywalls.
In the panel discussion, Guardian editor Lenore Taylor said she does not favour a paywall model, as there is a public benefit in news being publicly available. The Guardian has instead opted for a voluntary supporter model, with contributions of $10 per month, and it also encourages donations. Guardian Australia desperately needs this new model to work. In late 2015, the Australian reported that the Guardian Australia had two years to prove its worth. Ms Taylor mentioned the need to grow the Guardian’s revenue often kept her awake at night. Of course, the need to grow revenue is a concern for many businesses. But it appears especially difficult in the media industry, given the trends that were discussed by the panel.
Best of luck to Ms Taylor in making the Guardian Australia financially viable, but I fear it may be in trouble. Its voluntary supporter model runs up against the classic free rider problem. It appears unlikely sufficient people would sign up as supporters, paying $10 per month, when the vast majority of people can continue to read the site’s contents for free. For this reason, I also suspect Jimmy Wales’s new crowd-sourced news organisation, Wiki Tribune, which will also rely on a voluntary supporter model, will struggle.
In my view, although we all hate being blocked from reading articles on pay-walled news sites, such as the Courier-Mail or New York Times, the pay wall may ultimately be the best model for traditional journalism. But, as noted above, many media organisations are still struggling even though they have adopted this model. The problem is, of course, they are competing with (a) a whole lot of free content, including content from public broadcasters such as the ABC, and (b) the tendency for basic news to spread quickly via many channels, so, if media companies are not offering deep insights and analysis, few people will be willing to sign up.
Media organisations also may have to expand their geographic reach, meaning the better known brands such as the New York Times may end up in dominant positions, but those which focus on specific geographic regions may continue to struggle and fail. Griffith’s Susan Forde noted that the key to the New York Times’s recent success in signing up international readers has been to focus more on international issues, and much less on NYC-specific issues.
So across the world we may see less reporting by traditional media of local issues, and we may be more reliant on bloggers and citizen journalists such as David Marler in Queensland. Lenore Taylor has noted that the Guardian Australia has only one Brisbane-based reporter, and we know economic necessity has forced the Courier-Mail to cut its workforce over the years.
Clearly, the trend is toward fewer major news organisations and fewer journalists employed in traditional roles, and that is even before considering the potential impact of artificial intelligence. If they wish to remain in the media game, redundant journalists will either have to work as media advisers in government or industry, work as contractors for digital media agencies such as Newsmodo, or establish their own niche online media businesses (e.g. Gavin King’s Tropic Now).
As suggested above, those media organisations that survive will be those offering deep insights and valuable information, and charging for it via paywall subscription models. To illustrate, my two favourite publications, the Economist and the FT, are thriving. The Economist has recently moved out of its brutalist office building in St James’s, London to new headquarters in the Adelphi Building on Victoria Embankment by the Thames. And the FT has reported “sustained healthy profits” in 2016 (see this FT announcement). Its subscription numbers were certainly boosted by Brexit and Trump, but I expect very high quality news organisations such as the Economist and FT will continue to thrive. Of course, both these newspapers are focused on business, economics and finance, and publications in some other fields may struggle to prove their value to readers.
“The Media in Dangerous Times” panel discussion was the best panel discussion I have ever attended at the Brisbane Writers Festival over the years. Well done to the Chair and the panelists, and to the Writers Festival for organising such an excellent panel.
Queensland Economy Watch 