How can news organisations survive at a time of increasing reader needs and digital disruption?

How newsrooms adapt to the changing tide of the digital landscape as well as the preferences of young news audiences will be crucial to their survival, according to a panel at a Westminster Media Forum event today (12 November 2019).

"[Digital and online news] is clearly something people prefer - especially young people," said Dame Frances Cairncross, author of the Cairncross Review into the sustainability of journalism.

"This is in many ways a superior product, it’s what people want rather than a physical product. It’s what they call ‘revealed preference’."

It signals an increasing move to news which is personalised and convenient. This year's Digital News Report by the Reuters Institute for the Study of Journalism (RISJ) explores this trend further, with audiences relying less on editor judgement for news and getting news content through a range of platforms more suitable for them.

Nic Newman, senior research associate, RISJ said that 50 per cent of UK audiences are consuming news through ‘a side door’ - be that search, social media, mobile alerts, news aggregators and emails.

This raises the question how to make these forms of consumption profitable. For now, it has the potential to build relationships with readers and that can be treated as a stepping stone for monetisation.

"There is a correlation between direct relationships and willingness to pay," said Newman. "That’s a proxy for engagement and loyalty which every publisher wants."

However, the disappearance of local news titles and the administration of Johnston Press in 2018 is a symptom that digital has been disruptive for local titles and heritage titles, after inheriting costly print operating models.

"We are yet to find a model that is proven to be truly sustainable," said David Elms, UK head of media, KPMG.

"When people read news online, it is digital pennies versus old analogue pounds because advertising revenue is simply not sufficient to sustain digital news providers."

Jimmy Leach, editor-in-chief, HuffPost UK agreed: “We’re building reach and loyalty, but sustainable revenue remains our biggest challenge.”

The situation is different for the digital-only publisher HuffPost. Its biggest demographic is in its 30s - and 80 per cent of those readers consume news via their mobile phones.

The publisher remains committed to ad-supported news, rather than subscription, as to not price out any demographic of readers. But it makes monetisation of content harder as it serves less ads on mobile for the sake of user experience.

Its headache is around dependency of third-party referral traffic - which gatekeepers like Google and Facebook hold too much influence.

As such, Leach backs one of the Cairncross recommendations around a code of conduct. This would create a ‘whitelist’ of publishers who would receive targeted, ’preferential treatment online’.

"Those platforms hold the tap to news distributors, we’d like more certainty including more dialogue, real progress and monetisation of news."

Who regulates this would be the key ongoing question. A couple of alternatives in the review revolve around funding innovation to search for a fresh-take on business models and the removal of VAT for online news outlets to match the arrangement for physical newspapers.

But both of these would require the co-operation of the Government; what is clear, however, is that you cannot expect legislation to come running to the rescue.

"The government is not going to provide the solution to the woes of high-quality journalism, certainly there would be reservation towards grants and subsidies or forms of direct funding for news production, given the risk to editorial freedom," concluded Mark Bunting, partner for media consultancy firm Communications Chambers.

Save the date: our Newsrewired conference takes place on 27 November at Reuters, London. Head to newsrewired.com for the full agenda and tickets

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