If you’re not paying for the product, then you’re not the customer — you’re the product being sold. The year 2018 will bring this wisdom fully into focus, elevating the news industry as innovators while reducing the giant Silicon Valley technology companies to the status of change-resistant dinosaurs.
As the news industry moves away from primary reliance on advertising as its core revenue model, publishers will focus on serving their readers better instead of how best to sell them to advertisers. For the first time in decades, several large news publishers now generate more revenues from readers than from advertisers. It’s hard to overstate this business-model pivot. Advertising used to deliver 80 percent of revenues for newspapers, with subscriptions accounting for 20 percent. In terms of profit, advertising was an even higher percentage of the total in the pre-digital era because print subscriptions require the expenses of ink, newsprint, printing, and distribution. As news publishers focus on digital subscriptions, the dynamics flip, with a high profit margin on each new digital subscription sold.
The first news publishers to succeed with digital subscriptions were the largest brands such as The Wall Street Journal, The New York Times, and The Washington Post. They now have teams of data scientists mapping which investments in journalism correlate to more digital subscriptions and higher renewal rates. New York Times CEO Mark Thompson says he think the Times can eventually get to 10 million digital subscribers, several times larger than the current level.
Regional and local newspapers are focused on growing digital subscriptions. The editor of the San Jose Mercury News, Neil Chase, in 2017 bought plastic funnels for his journalists marked with reminders of the digital subscription sales funnel: “Awareness, Engagement, Registration, Subscription.” (Neil says the 69-cent funnels can also be used to hold beer). Many digital news publishers have also abandoned the original sin that all information has to be free by launching subscription or membership programs.
News publishers were the original innovators in what’s now called the subscription economy. Newspapers and magazines have sold subscriptions for hundreds of years, making them among the pioneering subscription-based businesses. We can now subscribe to Netflix for video, Spotify for music, and Dollar Shave Club for razors. But news has long been supported by readers, giving some reassurance that the pivot to high-margin digital subscriptions will make a big difference to the sustainability of news publishers.
In contrast, the platform companies continue to focus on how they can monetize their users — with their users understood as their “products to be sold.” eMarketer estimates Google and Facebook alone will account for 63 percent of the digital advertising market in 2017. The tipping point will occur in 2018, as Google and Facebook take over 100 percent of the revenue growth in digital advertising, leaving a small and shrinking pie for everyone else.
Silicon Valley now has a reputation problem with its users, who are wondering if even getting free access to services such as Google search and the Facebook News Feed is such a great bargain. People increasingly understood they “pay” as the products being sold to advertisers. “News” from fake news brands has highlighted worry that the sometimes dubious quality of the information on these platforms means they are not the safe, well-lit environments people expect. In 2018, Silicon Valley will have to do more than fund academic studies to regain the trust of their users if they want to push back against governments around the world now considering regulating them or even breaking them up.
And so a prediction for 2018: The reputation of the news industry will rise (admittedly from a lowly base) as publishers focus more on serving readers, while the reputation of Silicon Valley will continue to erode (from its still high base), at least until the technology companies find ways to improve the experience for their users and no longer focus just on the profitable experience for their advertisers.
Gordon Crovitz is former publisher of The Wall Street Journal and cofounder of the startup NewsGuard.
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David Skok Finding an information-life balance
Tanzina Vega It’s time for media companies to #PassTheMic
Julia Beizer A longer view on the pivot
Raney Aronson-Rath Transparency is the antidote to fake news
Jared Newman Venture funding and digital news don’t mix
Jarrod Dicker Honesty in advertising
Kristen Muller The year of the voter
Tanya Cordrey Finally, the seeds of radical reinvention
Tracie Powell The muting of underserved voices
Yvonne Leow The rise of video messaging
Luke O'Neil The end is already here
Rasmus Kleis Nielsen The Snapchat scenario and the risk of more closed platforms
Dannagal G. Young Stop covering politics as a game
Claire Wardle Disinformation gets worse
Errin Haines At the ballot, it’s time to count black women
José Zamora Revenue-first journalism
Corey Johnson The pro-fact resistance
C.W. Anderson The social media apocalypse
Vanessa K. DeLuca Women’s voices take center stage
Sam Sanders Shine the light on ourselves
Rachel Davis Mersey AI, with real smarts
Umbreen Bhatti The trust problem isn’t new
Cindy Royal Your journalism curriculum is obsolete
Basile Simon We need better career paths for news nerds
Andrew Haeg The year journalists become relationship builders
Mira Lowe The year of the local watchdog
Caitlin Thompson Podcasting models mature and diversify
Borja Echevarría TV goes digital, digital goes TV
Taylor Lorenz Social and media will split
Andrew Losowsky The year of resilience
Joanne Lipman Journalists inventing revenue streams
Bill Keller A growing turn to philanthropy
Sarah Marshall Loyalty as the key performance indicator
Matt Boggie The intellectual equivalent of the Dead Sea
Corey Ford The empire strikes back
Matt Thompson Here come the attention managers
Richard Tofel The platforms’ power demands more reporters’ attention
Miguel Castro The arrival of the impact producer
Millie Tran and Stine Bauer Dahlberg (Hint: It’s about your brand)
Pia Frey Address users as individuals
Jassim Ahmad Thriving on change
Will Sommer The year local media gets conservative
Charo Henríquez Training is an investment, not an expense
Pete Brown Push alerts, personalized
Jennifer Brandel and Mónica Guzmán The editorial meeting of the future
Laura E. Davis Writing answers before you know the question
Mary Walter-Brown Show a little vulnerability
Mandy Velez texting is lit rn, fam
Gordon Crovitz Serving readers over advertisers
Alastair Coote The year of self-improvement
Carrie Brown-Smith Transparency finally takes off
Alice Antheaume Are you fluent in AI?
Lucas Graves From algorithms to institutions
Amy Webb Listen to weak signals
Frédéric Filloux External forces
Amie Ferris-Rotman More female reporters abroad (please)
Kinsey Wilson Facebook and Google: Help out or pay up
Jamie Mottram From pageviews to t-shirts
Damon Krukowski Reviving the alt-weekly soul
Craig Newmark Working together toward sustainable solutions
Renée Kaplan The year of quiet adjustments (shhh)
Juleyka Lantigua Women of color will reclaim and monetize our time
Lanre Akinola Making noise is not a strategy
Molly de Aguiar Good journalism won’t be enough
Brian Lam Sketchy ethics around product reviews
Juliette De Maeyer A responsible press criticism
Aron Pilhofer We can’t leave the business to the business side any more
Sam Ford The year of investing in processes
AX Mina Memes and visuals come to the fore
Raju Narisetti Mirror, mirror on the wall
Emily Goligoski Looking beyond news for inspiration
Ruth Palmer Risks will grow for news subjects — especially minorities
Michelle Ferrier The year of the great reckoning
Matt Carlson Attacks on the press will get worse
Matt DeRienzo A recession, then a collapse
Vivian Schiller Pivot to tomorrow
Francesco Marconi The year of machine-to-machine journalism
S. Mitra Kalita The arc of news and audience
Felix Salmon Covering bitcoin while owning bitcoin
Tim Carmody Watch out for Spotify
Zizi Papacharissi Women come back
Eric Nuzum Beyond the narrative arc
Rodney Benson Better, less read, and less trusted
Alan Soon The rise of start of psychographic, micro-targeted media
Dheerja Kaur Fun with subscription products
Rubina Madan Fillion Unlocking the potential of AI
Nikki Usher The year of The Washington Post
Alfred Hermida Going beyond mobile-first
Hannah Cassius The year of the echo-chamber escapists
Christopher Meighan Passive partnership is in the rearview
Federica Cherubini The rise of bridge roles in news organizations
P. Kim Bui The reckoning is only beginning
Mi-Ai Parrish Blockchain and trust
Ståle Grut Reclaiming audience interaction from social networks
Rachel Schallom Better design helps differentiate opinion and news
Mary Meehan Real lives are at stake in rural areas
Helen Havlak Keywords, not publishers, power the world’s biggest feeds
Feli Sánchez The year for guerrilla user research
Rick Berke Value is the watchword
Michael Kuntz The only pivot that might work
Kyle Ellis Let’s build our way out of this
Jesse Holcomb Information disorder, coming to a congressional district near you
Mariano Blejman News games rule
Ernst-Jan Pfauth Publishing less to give readers more
Jim Brady With the people, not just of the people
Sydette Harry Listen to your corner and watch for the hook
Kawandeep Virdee Zines had it right all along
Jessica Parker Gilbert Design connects storytelling and strategy
Niketa Patel Live journalism comes of age
Daniel Trielli The rich get richer, the poor scramble
Sara M. Watson Feeds will open up to new user-determined filters
Sally Lehrman Trust comes first
Emma Carew Grovum Newsroom culture becomes a priority
Marcela Donini and Thiago Herdy Collaboration is the way forward for Brazilian journalism
Tamar Charney We get serious about algorithms
Kathleen McElroy Building a news video experience native to mobile
Jacqui Cheng Retailers move into content
Dan Shanoff You down with OTT? (Yeah, DTC)
Elizabeth Jensen Show your work
Steve Grove The midterms are an opportunity
Andrew Ramsammy The year ownership mattered
Mike Caulfield Refactoring media literacy for the networked age
Monique Judge Letting black women tell their own stories
Monika Bauerlein The firehose of falsehood
Kim Fox Audience teams diversify their approach
Nicholas Quah Stop talking trash about young people
Ray Soto VR reaches the next level
Pablo Boczkowski The rise of skeptical reading
Joanne McNeil Gatekeeping the gatekeepers
Caitria O'Neill The new court of public opinion
Carlos Martínez de la Serna The new journalism commons
Justin Kosslyn The year journalists become digital security experts
Adam Thomas Sharing is caring: The year of the mentor
Valérie Bélair-Gagnon Seeking trust in fragmented spaces
Jennifer Coogan The future is female
Trushar Barot The Jio-fication of India
Cristina Wilson The year of the Instagram Story
Mariana Moura Santos Think local, act global
Hossein Derakhshan Television has won
Jim Moroney Newspapers have to be good enough for readers to pay for
Eric Ulken The year local publishers get smart(er) about change
Jennifer Choi Standing up for us and for each other
Michelle Garcia Navigating journalistic transparency
Debra Adams Simmons And a woman shall lead them
Heather Bryant Building the ecosystems for collaboration
Evie Nagy Pivot to mobile video frustration
Joyce Barnathan It will be harder to bury the news
Julia B. Chan Looking for loyalty in all the right places
Cory Haik Suffering from realness, pivoting to impact
Nushin Rashidian Publishers seek ad dollar alternatives
Lam Thuy Vo Breaking free from the tyranny of the loudest
Nicholas Diakopoulos Fortifying social media from automated inauthenticity
Manoush Zomorodi Self-help as a publishing strategy
Marie Gilot No assholes allowed
Amy King Let’s amplify visual voice
Imaeyen Ibanga Longform video leads the way
Alexios Mantzarlis Moving fake news research out of the lab