Why most journalism startups suck?
Deconstructing business patterns in journalism
There is this quote somewhere in the “One hundred years of solitude” by Gabriel García Márquez that doesn’t really make sense taken out of context:
“A person doesn’t die when he should but when he can.”
However, if one doesn’t concern oneself with people but concepts such as journalism, the quote is actually quite good. Meanings, processes, concepts, paradigms don’t die when they should. They only die when they can — when an alternative emerges.
The following text illustrates how the current business paradigm in journalism is shallow and deprecated and asks: why are there no disruptive alternatives? The old concepts have not died nor reborn even if the conditions for their existence have vanished.
Journalism business patterns
Similarly to stones in arches in Gothic churches that only stay in place because of the surrounding stones, successful business paradigms are based on a number of interlinking patterns that support each other. All businesses, new and old, operate based on a set of such interconnected preconceptions, dogmas or patterns.
Journalism business has several patterns. Most important ones could be called as PERIODICAL PUBLISHING, NEWS IS A NEED, DUAL PRODUCT MARKET MODEL, and NICHE/BROAD DIFFERENTIATION.
PERIODICAL PUBLISHING means that a newspaper, a magazine or a radio or TV program is published on a specific intervals (dailies, weeklies, late night shows etc.). The periodical logic is also present in online and on-platform news, where the interval of publishing is the cognitive space of the consumer instead of the physical space of a paper or broadcasting channel. But events that journalism describes do not typically happen in periodical fashion. Why then does this pattern emerge? Because PERIODICAL PUBLISHING was the only way to make property value in public information.
Information has no value in itself — only the differences in information are valuable. If I know more than you do, I have a valuable advantage. Periodical publishing utilised this feature of information by creating a need for information parity even when there was no significant events — one can only know that one is not lacking behind in relevant information after the newspaper has been read, TV broadcast watched, Facebook feed browsed.
NEWS IS A NEED means that those who produce journalism consider that people desire news. Historical and anthropological studies have confirmed that most communities have an intrinsic desire to get relevant and accurate information about their surroundings. In the NEWS IS A NEED pattern, however, the relevant is replaced with timely and accuracy with objectivity.
DUAL PRODUCT MARKET MODEL means that journalism operates in two markets. First the product was sold or given free to consumers, and then the total circulation or views within each periodical was sold to advertisers. This double model yields superb profits and creates local monopolies and duopolies that are very difficult to break down.
NICHE/BROAD DIFFERENTIATION pattern dictates that journalism products are differentiated either based on reach of based on insightful content. It’s originally based on the special spacetime characteristic of printed news, timeliness of which was strongly associated with place. It took time to deliver daily newspapers to cities far away, so newspapers focused especially on local events while weekly magazines were more about contextualising and explaining large, nation wide events and occurrences. Similarly, a daily publication only made sense if it served a large segment of the population in a specific area — leading to more general knowledge printed in these publications. On the other hand, weekly and monthly publications were able to serve niche audiences across the country but their profits were limited by smaller publication frequency.
There are other patterns as well, but the aforementioned ones are sufficient for the arguments in this text.
Pattern interaction
The aforementioned patterns support each other like voussoir stones in a stone arch.
Regarding NEWS IS A NEED pattern, timeliness is a handy way to guarantee relevancy, because new information can be relevant. But paired with PERIODICAL PUBLISHING, the timely news is often relevant information only in the negative sense: the consumer can get a guarantee that “this was once again a day when nothing relevant happened”. In other words, the combination of the aforementioned patterns create a periodical demand for irrelevant information.
DUAL PRODUCT MARKET MODEL also benefits greatly from PERIODICAL PUBLISHING, because it creates a constant spacetime for advertisements and guarantees a predictable number of eyeballs over a time period.
NICHE/BROAD DIFFERENTIATION benefits from DUAL PRODUCT MARKET MODEL by making a similar division that exists in audience segmentation to the advertisers.
The keystone of the arch, what I call NEWS MANUFACTURING, was only possible by the specific arrangement of other patterns supporting it. Events are seldom perioditical, and people don’t inherently need news, but if they do have a desire for periodical news, advertisers can tap into a constant stream of eyeballs and attention. Furthermore, the habits created by periodical publishing allowed various kinds of rituals to emerge around different news publishing genres from breakfast newspaper to nine o’clock news broadcasts.
The NEWS MANUFACTURING pattern lies firmly on top of the other patterns. It’s special feature is that it makes it almost impossible for a newcomer to gain competitive advantage by disrupting any individual patterns, even if the patterns they aim to replace are deprecated as I will demonstrate in the following chapter. Startups that don’t understand the complex arrangement of several interlocked patterns don’t meet expectations; media disruption doesn’t happen. Instead, the biggest media corporation wins in each (usually language-bound) market. This is the future of media as long as the old voussoir stones hold each other in place.
Crumbling voussoirs
The purpose of the arch metaphor is to emphasise that even if all of the internal structure of individual pattern has broken down, the overall structure still keeps them in place. And this is indeed the case. Looking at any of the aforementioned patterns more closely reveals that alone they would quickly turn to dust.
The case with PERIODICAL PUBLISHING is the most complex one and cannot be thoroughly dealt with in this text (check this one for more thorough consideration). But in short, instead of wearing out, digital products can benefit from use: journalistic products tend to have this “antirival” characteristic. In digital platform markets, superior competitive advantage comes from positive feedback loops (network effects) that derive from this product feature. However, business models that benefit from antirivalrous goods cannot be based on creating property value on irrelevant information via periodical publishing, because there is no added value in accumulating irrelevant information. Instead, the value of information parity comes from taking away accumulated information benefits from someone.
Regarding NEWS IS A NEED, replacing accuracy with objectivity made sense in the industrial era, when the economic modernity coupled with broadening scope of uniform media space created an illusion of a single, dominant discourse within which it made sense to analyse and discuss about the objectivity of different claims, arguments and point-of-views. Today it’s well known that this singular approach to objectivity is problematic in practice due to “postmodernism”. However, journalism lacks an alternative narrative to accuracy. Furthermore, clearly there are other means of providing relevant information than by providing new information. Relevant information is any information that helps one to change behaviours or ideas to fit better to one’s goals. Defining journalism based on the timeliness makes sense if that indeed is the only way to produce relevant information, but for example due to more efficient information recommendation mechanisms, this is less and less true these days. Similarly to Spotify recommending old songs that one has never heard before, some information recommendation algorithms and crowd-curated discussion forums already provide people with interesting information based on their preferences and identity and less so on how new the information is.
The DUAL PRODUCT MARKET MODEL is problematic in online journalism because online news sites don’t have a monopoly on the access to their readers anymore. Any time spent digitally can be used to push advertisements to consumers, not only the time people spend consuming journalism. Furthermore, it’s even more problematic in on-platform journalism, because of a double ad problem: the platforms are already selling the eyeballs of the platform users to advertisers, so advertisements in embedded content is always “yet another advertisement” while consuming journalistic content. These two effects cause at least a ten fold decrease in advertisement price. Only the largest companies survive the shrinking advertisement incomes.
NICHE/BROAD DIFFERENTIATION pattern broke down already due to radio and then because of television, both providing at times broad audiences for general topics without the spacetime limitations of paper based publishing. The internet, of course, made the whole discussion regarding geography and timeliness nonsensical. Still, new journalism startups tend to follow this differentiation pattern, creating either broad or niche content without realising that successful journalism in the digital era needs to be both.
Disruption in media did not happen yet
Over the last 20 years, there has been a lot of talk about the end of media and disruption of journalism. And the conditions for journalism indeed changed, but as demonstrated in the previous chapters, the underlying business paradigm did not alter.
The well-known examples of media disruption, e.g. Facebook, Twitter, Instagram and Tiktok, demonstrated different technological means for reorganising social connections and attention. These innovations are trivial: it was certain that photos triumph over text in personal connections, and that providing a very large group of people with quality video cameras, coupled with intelligent machine learning to quickly identify good content, entertainment business gets disrupted. So the technological disruption is real, and regarding journalism it led to emergence of on-platform news. But while the conditions for the industrial era information products disappeared, journalism itself didn’t really change. The same stories that used to be printed on paper or broadcasted via analog TV can now be accessed through social media channels. But the patterns behind news manufacturing remain the same: the news product is essentially the same as before.
In a beautiful essay by Daniel Dennett and Deb Roy, the authors compare one feature of the digital content, transparency, to Cambrian explosion — a time for extraordinarily quick and multisided evolution that happened half a billion years ago. They paraphrase a hypothesis explaining this weird period, which is that it was at this time when thick clouds surfacing the Earth started to dissolve and the world was suddenly flooded with light, forcing flora and fauna to rapidly evolve or die. Predators with prototypical eyes could suddenly see their prey, hiding required complex behaviors and patterns, poisonous parts could be communicated and faked, and so on. The authors claim that digital transparency has a similar effect to the current life of a man than the blinding direct light had on the Cambrian animals: “Every human institution, from marriage to the army to the government to the courts to corporations and banks, religions, every system of civilisation is now in jeopardy because of this new transparency.”
Journalism business is the business of publicity, of institutional transparency. Such features of digital content should provide massive opportunities for journalism. But concerning the journalistic product, it seems that there’s none.
It’s not about the lack of effort, either. Startups and disruptors have tried to attack each of the crumbling voussoirs individually. For example, there are many companies that try to break down the periodical publishing via Patreon style crowdfunding models, e.g. the Finnish startup Rapport. Many popular journalistic Youtube stars and many well-known TV comedians have moved beyond the traditional concept of objectivity. Some insightful subreddits offer relevant information for specific needs without the constraints of timeliness. And some news publishers have successfully detached themselves from advertisements.
Still, most of the new and old media have nothing more to offer than traditional newspaper articles or television programs. They join in to the repeating recreation of the same stories on different websites, which is easy to do, as digital content is free to copy and distribute. Their cost structures are healthy compared to the old school media conglomerates, but that’s it. Digital business models should do better.
Daniel Dennett, interviewed for the Financial Times (paywall), suggested what he would do “if given a billion dollars”: a co-operative, self-policing “truth source”. He imagines that it would be like “a combination of the Reuters news agency, the Wikipedia online encyclopedia, and the Snopes website for debunking urban myths.“ Such dreams feel corrupted these days, as one instantly starts to think how difficult it would be to manage such a community for monotonous truth. Nevertheless, it’s indeed such dreams towards which we should start rearranging the pattern of journalism business in order to create institutions that support democratic decision-making, representation and information parity in the digital world.
New construction instructions
Even though it’s clear that the conditions where the current patterns excelled have vanished, it’s not possible to create disruptive models for journalism by creating an innovative approach to only one pattern. This is what good journalism startups try to do and why they fail. In particular, most of them fail to realise that maintaining a competitive advantage in the digital platform economy requires a feedback loop business model that creates value accumulation, which is not possible to construct within the PERIODICAL PUBLISHING pattern.
Nevertheless, it’s possible to imagine a competing business paradigm for journalism. That requires changing and reorienting the patterns of the current paradigm.
I have a some complete answers for rearrangement of new journalism business patterns in a way that they support each other like stones in a stone arch. But for now, I will only provide some initial questions and starting points in the remainder of this text. If you are interested in my insights and this approach, feel free to contact me.
The arch metaphor approach has three clear benefits. The first benefit of the approach is that it makes it possible to imagine voussoirs that are only possible due to the other patterns that are present in the combination. Second, it forces one to consider the interlinkages of all the premises and to consider which stones fit to others and which don’t (while remaining flexible concerning what a voussoir is, in contradiction to more set pattern based approaches e.g. business model canvas). Third, the metaphor can include a solid stone wall of premises that one can consider safe. I call these safe premises springers according to the stone arch metaphor.
Next, before speculating on the features of the new patterns, I shall name a few springers.
Springers
A springer is the lowest voussoir in the arch formation. In the business patterns metaphor, it’s the immovable fact that can be relied upon even if the other patterns are no longer relevant. There are several springers that I consider safe and solid, for example RELEVANT AND ACCURATE INFORMATION, INFORMATION PARITY HAS VALUE, and THINGS MATTER.
RELEVANT AND ACCURATE INFORMATION is a springer that is based on a large trove of historical and anthropological evidence: groups of people have always been interested in information that is relevant to them, and they have a motivation to make sure it’s accurate. Even if stating this might sound obvious (very few animals would survive if they wouldn’t care about relevant and accurate facts about their environment, including presence of predators and food in the nearby), the information infrastructure these days is so bizarre that one starts to wonder if this trust block is still relevant concerning all human communities… Nevertheless, there are signs that people indeed are interested in crucial information regarding their own well-being. For example, the readership in the so called fake news sites has reduced during the corona pandemic and increased in the sites of the more established media.
INFORMATION PARITY HAS VALUE springer dictates that people find value in levelling the playing field regarding information. Information disparity causes power hierarchies, and removing such hierarchies is considered valuable both concerning individuals and groups at large. While the case regarding the individual is perhaps more easy to swallow, there are solid arguments also regarding the fact that it’s beneficial for groups to maintain information parity.
THINGS MATTER springer simply dictates that people have topics that they are interested in, be they basketball teams, wood product prices or kindergarten opening hours. If these things change, people would like to know about it. They might even get angry or excited about these things changing.
New patterns?
A set of new patterns could include for example following patterns: UNDERSTANDING CHANGE, SOCIAL OBJECTS, ANTIRIVAL ACCUMULATION and PLATFORM PROFIT MODEL.
UNDERSTANDING CHANGE pattern is the value proposition that journalism could make: to illustrate change regarding the things that people consider important. Currently, this function is served only by accident, as news considers things that matter to people often only indirectly. Many study the economy segment in a newspaper from the perspective of their own investments or housing loans, but a major part of this contextualisation work has so far been left to the consumer.
SOCIAL OBJECTS is a pattern that builds on the THINGS MATTER springer and claims that these things that matter are or can be made social. Communities and discussions are formed around these important things. Everything that matters is a source for discussion and debate. Journalism can use this feature by reorganising the content production around these objects. There are initial signs of such gestures in dedicated discussion forums and subreddits, Facebook groups, in evolution of hashtags and mechanisms of personalisation. But how well has the broad audience identified their interest as a topic of social interaction?
ANTIRIVAL ACCUMULATION refers to the antirivalrous features of the information goods, and points out that any business model that aims to benefit from this peculiar feature needs to accumulate some value using multi-market business models and information storages.
PLATFORM PROFIT MODEL is a pattern that emphasises value capture only after value creation and value translation mechanisms are functional. In other words, it concentrates the efforts of the entrepreneur to first create incentives for collaboration between different groups, and maintains that when such collaboration happens under governance of the platform, profit model can be set up in a way that it doesn’t hurt the antirival value accumulation or collaboration preferences.
A person doesn’t die when he should but when he can. Journalism can be reincarnated when the business paradigm of journalism helps people to understand how the topics they care about are changing.
However, people do not need news. Instead, people do need accurate, relevant and timely information about change regarding specific topics (such as housing loans, basketball teams or local streets). These are the social objects that people talk about. Events (that news tell about) are external to them.
Further, the value of journalism is not in informing people. Journalism makes information public, but only private information has value. Nevertheless, journalism can create information parity, which is valuable to many.
Currently, a newcomer cannot gain a competitive advantage in journalism where value added is based on periodical publishing. The biggest media corporation is winning in each market. But in digital and platform markets, superior competitive advantage comes from positive feedback loops (accumulation of value). This is impossible if the content production is based on property value gained via periodical publishing (as is the case with journalism). Successful journalism platforms in the future are not periodical.
And finally, it’s possible to come up with alternative configurations for the journalism business paradigm. This requires massive reconsideration of current premises, but once the old stones have been removed, there is a limited number of ways to build a new arch that carries the weight of societies.
