PRIVATE SECTOR NEWS MEDIA EXPLORING NEW BUSINESS MODELS
Newspapers and broadcasters across Europe are investing in a wide variety of digital news initiatives to reach new audiences and build new business models, a new report from the Reuters Institute finds – but most of their revenues still come from traditional print and television operations, even after almost 20 years of investment in digital news.
The report, Private Sector Media and Digital News, by Alessio Cornia, Annika Sehl and Rasmus Kleis Nielsen, examines how 25 different private sector legacy news organisations in six European countries are adapting to an evolving media environment, especially in terms of dealing with the business of digital news, the rise of social media, the move from desktop internet to an increasingly mobile web, and the growing importance of online video.
“Newspapers and broadcasters are sometimes derided as old media and criticised for their conservatism and cautious approach to digital media. Our research suggest they are in fact investing significant resources in experimenting with new formats and platforms” Dr Rasmus Kleis Nielsen, Director of Research at the Reuters Institute and co-author of the report, says. He continues, “Experimentation is absolutely necessary, but also costly and uncertain. Since digital revenues are still limited, the resources for investments in digital generally come from cross-subsidies from legacy operations or from cost-cutting elsewhere in each organisation. This means that legacy organisations have to continue balancing exploiting traditional business models with exploring future opportunities”.
The 54 executives, senior managers and editors interviewed across Finland, France, Germany, Italy, Poland, and the United Kingdom highlight three main challenges when it comes to digital advertising, which is still the main source of digital revenues for most:
- the increasingly dominant role of large US-based technology companies, which are able to sell larger audiences, more targeted advertising, and at lower rates than those of legacy news providers;
- the low average revenues per user, especially on the mobile web;
- the growing number of people who use ad-blockers.
The mounting pressures on revenues from print and broadcast operations combined with a challenging digital advertising market underlines the importance of developing new business models to support journalism.