Steve Dempsey: Tech blogger highlights threat to traditional news business model
It looks like more people are turning to social media for the news. Hardly breaking news, but a new report from the Pew Research Centre reveals just how compelling social channels are becoming.
The study found that 67pc of Americans report that they now get some of their news on social media. And not only are more news-hounds using social media. They're using more social media services to get news than ever before. Twenty-six percent of US adults now get news from two or more social networks. That's up from 18pc in 2016.
The demographics are also changing: Facebook and Co aren't just fads for the youth - 55pc of respondents over 50 are now getting news on social media.
The newsiest network is, of course, Facebook. Pew found that 45pc of US adults get news from Facebook. YouTube is the next biggest network for news with 18pc of US adults getting news on Google's video channel.
Interestingly, only three of the social networks measured saw an increase in their audience that gets news on the site: Twitter, YouTube and Snapchat.
But all this growth in social channels isn't necessarily bad news for news outlets. Many social media users still consume news from traditional channels. As ever, there are some variations. Twitter news users, for example, are more likely to also often get news via news websites and apps than Facebook news users. Facebook news users are more likely to often get news from local TV than those on YouTube, Twitter and Snapchat. LinkedIn users are most likely to rely on the good ole printed paper for their news. Snapchat news users are the least likely to read the newspaper.
So what does all this mean for traditional news outlets? And what does it mean for the news itself?
Well, first, it's worth recognising that the research is specific to America. There may be regional variances; there may be differences in the performance of certain networks; but the trends are probably similar for many developed countries where mobile penetration is high.
The ink-absorbed traditionalists will no doubt read this research as further proof of the death of in-depth analysis and quality journalism. But perhaps this is overly pessimistic. Social channels offer huge opportunities for news outlets to reach huge audiences with both breaking news stories and longer reads.
But there are challenges. Specifically in relation to ensuring brand recognition and creating a reading environment where audiences will value the content.
But there is an existential crisis here for news brands. Social media, like the internet overall, has exploded the barriers to entry for anyone that wants to build an audience. It escalates the unbundling of a daily newspaper, TV channel or nightly news broadcast.
Plus it puts the power in the hands of the user to electively select their news sources.
Now individuals can reach the same size of audience as large news outlets. And the audience can often have a closer relationship with these authentic individuals. And economically, it can be a lot more attractive to run a commercially successful social media channel than a large news organisation, where the news itself traditionally subsidises the content that makes the money.
Take Marques Brownlee a 23-year-old tech blogger, with over five million subscribers on YouTube. That's five times more YouTube subscribers that the New York Times. Brownlee, in contrast can expect to earn at least $300,000 from YouTube ads alone based on the size of his audience. Smart cookie that he is, he doubtlessly generates revenue on other social sites and probably has a host of other sponsorship deals.
The New York Times wanted to get into this technology space. It bought the tech review website Wirecutter last year for an estimated $30m. The Wirecutter now reportedly has over 100 staff. Its revenue was somewhere between $10m and $20m a year before selling to the Times, according to Politico. Assuming that its 100 employees are now hitting the $20m mark, Marques Brownlee can generate far more just on YouTube than any of Wirecutter's employees, and without any of the huge overheads a news organisation faces.
Admittedly, this isn't pure news content. But it illustrates that the continued rise of social media undermines the business model for news organisations.
And perhaps this is the real threat that social media brings may not be the rise of fake news and the creation of echo chambers, but how it is undermining the traditional news business model.
Sunday Indo Business