Welcome back to the newsletter. Today I have two interesting things for you. First, my 'start of the year' trend report is ready, and secondly, let's talk about paywalls, rich people vs the poor.
Every start of a new year (nearly) I write a report about what the most important focus areas should be for publishers in the year(s) ahead. These articles are historically the most popular articles I publish. This is not a 'prediction' type article. Instead, it's what I have found through my media analysis to be the most important things for us to focus on.
This article is also much more narrow than other trend articles because the focus is on the present, as in, what should you do right now, in 2022, to create a better future for your publication.
This year, I'm also focusing much more on the newsroom side than what I usually do. The reason is that some of the most important trends we see right now, and some of the biggest problems and obstacles we face, are about how we define our journalism. These are things that cannot be solved by just doing something 'on the business side'.
So take a look at: What are the trends that publishers should focus on in 2022?
One of the biggest trends we see at the moment is the rapid increase and focus on paid-for media. In fact, according to Reuters Institute, 79% of the media that they surveyed says that paid-for media "will be one of their most important revenue priorities, ahead of both display and native advertising."
This is not surprising. Paid-for media, with subscription, memberships or donations is literally saving the industry. If it wasn't for this focus, we would still have all the problems we had after the financial crisis, and many times more publishers would have gone bankrupt during this pandemic. Refocusing on 'pay' is the single most important thing we have done in the past 10 years.
But, because this focus is so dominating and only a small percentage of the public are willing to pay for news, a growing group of people have started to push back on this. As Reuter's also put it:
Many respondents (47%) worry that subscription models may be pushing journalism towards super-serving richer and more educated audiences and leaving others behind.
And then Sara Fischer from Axios put together a good article interviewing a group of media experts who were very negative in their future outlook of paid-for media.
As Rodney Benson, chair of NYU's Department of Media said:
In this commercial environment, quality is being supported by paying audiences. Obviously, long-term, this is going to have tremendously negative civic effects.
And in another post, Mike Masnick from TechDirt said:
Established media has been putting lots of important news behind a paywall. The disinformation peddlers don't. The paywalls are a big part of the problem.
This does sound like a problem, and both Mike and many of the other experts that Sara interviewed are people that I both respect and follow for their insights. But, long time readers of Baekdal Plus will know that I do not share this concern.
I do not think this is actually a problem. In fact, I see the exact opposite. I believe that it's the shift to paid media that is saving news society. It's enabling things that were never possible before, including the ability to better inform and serve marginalized communities, and I believe it's instrumental in reducing the problem with misinformation.
Let me explain in a bit more detail.
One of the first things I would like to debunk is the idea that with paid-for media, poor people would somehow be cut off from the news. There is absolutely no evidence of this. In fact, even if every newspaper went paid, the public would still have much greater access to news than at any time in the past.
There is no scarcity of news. Instead, we have so much news that, in the US, 71% feel so overburdened by it that they feel they need to take a break from it. At the same time, we see publishers partner with Facebook News and Google News Showcase to give people even more news.
So, I don't understand why so many think that people will have problems with accessing news in the future. It's just not a concern, neither today, nor in the future.
There is no shortage of access to news.
Another thing I want to debunk is about what misinformation is. Most people in the media (it seems), have the mindset that we are the good guys, and we always exclusively do good, while misinformation peddlers on Facebook are the bad guys, who always do bad.
Obviously, this is not true, and we know it's not true.
The first problem with misinformation is that there are three segments.
There are the deliberate misinformation peddlers, who willingly and knowingly try to misinform the public, either for political gains, profit, or just because they think it's fun.
These people are truly horrible. But, they also do not really have that big an impact. In fact, I have seen many studies that prove that they have almost no impact at all.
The second segment is with what I call mainstream media misinformation, which has a much bigger impact. One simple example of this is Fox News, which is a mainstream broadcaster that people pay for either via their cable TV package, or directly via the Fox Nation streaming platform.
We see this also with other mainstream publishers who are known to directly mislead the public. They are not free newspapers. They are paid-for newspapers just like everyone else.
So the idea that the paywall is what is causing the problem with people getting misinformed is just not true. Whether we have a paywall or not doesn't change this problem in any way.
Think about it like this. Would the New York Times be able to fix the problem with misinformation from Fox News if it dropped their paywall? No, of course not.
But the biggest concern I have is with the third segment. This is a segment I call 'normal mainstream news unintentionally misinforming the public'. This is such a frustrating problem, let me give you an example of this.
As I was writing this article, I was looking at the front page of one of the largest news sites in my country. And the top headlines were these:
First, we learn that the public focus on COVID is falling and that it is getting harder and harder to effectively deal with the virus. Okay, that's bad.
But then you see the two articles right beneath it. The first saying that we should just look at COVID like the flu (so don't worry), and the other that there is apparently no longer a need for restrictions (again, don't worry).
I find this to be astonishing. First they tell people that it's a problem that we don't maintain our focus, and then they tell people "don't focus". Didn't anyone at this news site stop and think about what is happening here?
The problem is with what I call "just reporting". In journalism, we have created a culture where we "just report" the news, not taking any responsibility for how it impacts the public.
Here is another example, from August 2021:
I mean, look at this. We have the headline (which is what most people see) claiming this as a fact. Then when you read the article (which much fewer people do), we see that it might not even be the vaccine causing this ... oh, and BTW we do not even know the official cause of death yet.
This was from August 2021 during a time where it was critically important to get more of the public vaccinated.
What the actual f...?!?!
Pfizer vaccine is the single most widely tested vaccine ever made, it's extraordinarily safe. But then, just because one person in one part of the world may or may not have died due to it (we don't know) ... it was put on the front pages.
This is the real problem with misinformation. It's the culture of 'just reporting', which is causing people to get so confused about what those facts are that they end up just believing whatever they want to believe. I have a friend who believes that Pfizer isn't safe. And to prove that belief, they are sending me articles like the one above.
Again, whether a newspaper is paid for or not doesn't change this problem. Misinformation cannot be used as an argument for why news should be free.
Let's forget the problem with misinformation and talk about the other argument that paid-for news only serves the rich.
It is true that many publishers struggle to get people to pay, and it's also true that when we segment the audience by income, you see that the people who pay have a higher average income level than people who don't. And so, yes, that is a concern.
However, it's not a concern the way you might think.
The fundamental problem with news is about the cost vs relevance. Let me give you an example.
I was talking to a friend who was thinking about getting Disney+. The problem was that she is already subscribing to both Netflix and HBO Nordic, so adding a third streaming channel is a bit expensive.
But then we started to talk about other expenses, and one example is newspapers. The cost of a newspaper subscription in my country is about 4.5 times that of a Disney+ subscription. Meaning, if she cut the news subscription, she could more than afford both Netflix, HBO Nordic, Disney+ .... and still have money left over.
Just think about that for a second.
This is the reality that many people face. They don't have an endless budget for media, so it's about the choice. And, today, newspapers demand a proportionally high price compared to all other forms of media. But, they are also considered to be some of the least valuable, so, if faced with that choice, many stop paying for the news, and suddenly they can do all the other things they want to do.
If you are a rich person you have more than enough money to pay for both the news and all the streaming channels. So they don't have to make that choice, which also means that their demand for relevance is lower. If a media channel isn't 100% what you need, it doesn't matter because you can afford that cost regardless.
Poor people can't do that.
And then we have the problem with relevance. News, generally speaking, has an extremely low level of relevancy to the individual. COVID is an exception to this, but what we consider to be news is not really something that impacts most people. However, this is not true for executives (a rich person).
Take an article like this one:
If you are an executive, this article might be very relevant because the relationship between the West and Russia might influence your business. In other words, this news (or circumstances related to it) might affect your job, your strategies, and your focus.
But then consider a person like the one below. This is a worker who spends his day on a market organizing products, stacking boxes, etc. Here is a simple question for you. How many times per day do you think this person is thinking, "OMG, I'm worried about Kazakhstan!"?
This is a really simple question to answer because it's zero. For this worker, he never thinks or worries about this. It has zero impact on him or his family, zero relevance to his work. It's not that he doesn't care. Most people care about the state of the world. But if you ask this person whether he would want to spend 4.5 times the cost of Disney+ to read about Putin in Kazakhstan, or ... you know ... get Disney+, Netflix, HBO, he will choose to spend it on more streaming channels.
This is the reality today. The things that we define as news simply aren't relevant to the ordinary person. It's nice to know, but not something you are going to spend that much money to pay for each month.
So yes, if we just add a paywall to every news site today, then it will be dominated mostly by rich people. But, that's not a paywall problem. It's a relevancy vs cost problem. And you can't fix that by just making news free. That might get news to be seen by more people, but it wouldn't make people want more news.
Which leads us to this final point:
As I said in the beginning, not only do I not see the paywall being a problem, instead, I see it as the very thing that is helping create more media than ever before, especially for marginalized communities.
The simple reality is this. Advertising only works at scale, meaning that in order for you to get enough revenue to be profitable from advertising, you need a lot of volume (which requires a lot of people), and a mass-market focus (to get enough random traffic). As a result, marginalized media does not work with advertising, and so, in the first 10 years of the internet, we couldn't make that work. In the past, it was either free or big publishers.
But the shift towards 'paid-for'' has dramatically changed this. Today, very small publishers focusing on very specific groups or niches can focus on paid, and get enough direct supporters to turn that into a living.
In fact, just as I was writing this, I saw a tweet from an independent journalist in Sweden who wrote this:
This is only possible because, over the past 10 years, we have slowly but surely changed the public culture to accept paying for content online.
And we see this across the media spectrum. YouTube is another perfect example. There are a few super-popular YouTubers who are able to make enough money from YouTube advertising alone to make that work but most creators can't. But thanks to several different forms of direct payments, we now see thousands of small extremely niche creators who can do this for a living, covering topics and interests that big newspapers would never even consider.
So for instance, when Rodney Benson said that paid-for media "is going to have tremendously negative civic effects" ... this is wrong. It's exactly the other way around. Paid-for media is going to create a tremendously positive civic effect.
But the key to all of this is culture. Specifically the culture that people accept and acknowledge that good journalism is what you pay for. Without this culture, we can't do any of this.
So when I see media experts proclaim that paying is a problem and that news should be free, not only is that wrong but it undermines all the work we did over the past decade.
Paid-for media is not a problem. It does not undermine society, and it does not foster misinformation. Instead, it enables niche media, it allows marginalized societies to have news representation, it helps create new forms of media, and more people are served in more ways than ever.
Paid-for media is the single most important thing we have ever focused on. It is saving us and it's saving our society.
Don't forget to check out the paywall report in my new 'known to work' series, where we explore strategies that we have clear evidence for.
And also, remember the article about niches I mentioned above:
Also, remember that while this newsletter is free for anyone to read, it's paid for by my subscribers to Baekdal Plus. So if you want to support this type of analysis and advice, subscribe to Baekdal Plus, which will also give you access to all my Plus reports (more than 300), and all the new ones (about 25 reports per year).
Founder, media analyst, author, and publisher. Follow on Twitter
"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made himself known for his analysis of how digitization has changed the way we consume media."
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