2020 will be the year news publishers begin taking control of the platform on which their news is published.
This means publishers’ owned and operated platforms will become the main or only place for news publication at the cost of news distribution on social and distributed platforms such as Facebook and YouTube. Perhaps more importantly, it means publishers will house key parts of the tech stack that support the production, publication, and analysis of news on their own platforms.
This will enable a differentiated and better experience for their journalism.
This post outlines why news publishers are beginning to take control of their platforms, what taking control entails, and how this sets the stage for competition among publishers in the 2020s.
Why are news publishers taking back control of their platforms?
The efforts to regain control of news publishing platforms is the culmination of well-known trends that have been growing over a number of years. The most important trends are:
The breakdown of the relationship between news publishers and social media. In the past decade, the promise of reach and clicks enticed news publishers to build a massive presence on social and distributed media platforms such as Facebook and YouTube. However, in recent years, news decreased in prominence in the algorithms controlling social content feeds. Also, media companies realised social platforms offer reach with minimal revenue. Both factors caused the relationship between publishers and social giants to sour.
With no clear outlook for change, news publishers en masse are now demoting social and distributed media to marketing channels, focusing instead on their own platforms.
The turn to paid-for journalism. In recent years, most legacy news publishers changed their revenue model from purely advertising funded (aka “free”) to hybrid (freemium or metered models) to almost all paid (hard paywall). This change was fueled by the fact that digital advertising is a volume game and the realisation that users are willing to pay for digital news (albeit, as of now, significantly less than newspaper buyers were).
As a consequence, news publishers are seeking to build deeper relationships with paying subscribers, which is best done on a platform allowing publishers to own the customer relationship and control the experience of the news content.
Growing user expectations. The stars of digital media are now widely used players such as Netflix, Hulu, Spotify, and Apple Music. These offerings focus on entertainment content and, at most, compete indirectly with news publishers.
However, the content these players offer is served on increasingly polished and engaging platforms with an often highly personalised user experience that makes most news Web sites and apps pale in comparison. With growing user expectations, news publishers realise their users expect an increasingly seamless and engaging experience of their journalism, in particular when they are asked to pay. As shown by the stars of digital media mentioned above, creating such a user experience requires direct control of the platform on which content is offered.
What does taking control of the news publishing platform entail?
Medium-sized or large legacy news publishers have had in-house engineers maintaining and developing the systems that power their Web sites and apps since the 2000s. However, most legacy news publishers have sourced as much as possible from tech firms, insisting media companies do good journalism while others do good tech. This means media companies ceded control of most key assets related to their news publishing platform (including user data) to third parties.
2020 marks the year this begins to change. A part of the change will be publishers reserving news content for their own platforms while demoting social and distributed media to marketing channels containing only teasers for content and links to news stories behind paywalls. More importantly, publishers will begin housing some or all of the assets that make up their own publishing platforms.
A few ambitious frontrunners have taken this to the extreme by bringing their publishing platforms in-house (almost) end-to-end. Examples include Schibsted (Schibsted Publishing Platform) and the Washington Post Company (Arc), the latter of which began selling its platform to other publishers in 2019. Other publishers, such as Ringier and JP/Politikens Hus, aim to take control of user data by building in-house capacity for collecting and using first-party data, which is increasingly important in creating personalised and engaging news content and advertising experiences.
Yet other publishers are investing in building better journalism experiences by strengthening the relationship between news content and technology. One example is JoLab, a collaboration between Norwegian publishers, which opens January 2020 and focuses on visualisation, graphics, Augmented and Virtual Reality, and Artificial Intelligence.
The commonality among all these examples is that they involve a definition extension of what it means to be a news publisher from journalism to journalism and platform. Only a few publishers will follow in the footsteps of ambitious frontrunners such as Schibsted and The Washington Post and bring their entire publishing platform in house.
However, mainstream news publishers will seek to take control of the parts of their platforms necessary for providing a competitive journalism experience in the 2020s. With regard to news, this experience will be less social and more paid, and user expectations are now widely set due to digital entertainment offerings.
What are the strategic implications for competition among news publishers in the 2020s?
The increased focus on controlling the platform on which their news is published does not change the fundamental fact of news publishing: Content is king. However, it signals that the journalism experience publishers’ own platforms provide will become an additional value driver and source of competitive advantage.
This has several strategic implications that will shape competition among news publishers in the 2020s.
When the platform becomes an additional value driver, investing in platform improvement allows news publishers to grow their subscriber base and increase prices. This does not imply, however, that platform improvements allow news publishers to compete with Netflix or Disney+. Content is still king, and news publishers can strive to provide a seamless and engaging experience of journalism to become a leader among news publishers. Competing with the best video-streaming providers requires investing billions in entertainment content.
When news publishers take control of the key assets supporting their platform, they also regain control of lost steps in the news publishing value chain. Accordingly, developing the ability to collect and use first-party data decreases dependence on providers of third-party data, while demoting social and distributed media to marketing channels increases control over news distribution. Taking back control of steps in the value chain can be costly (i.e. investments in data scientists or lost traffic from social media) but will, if successful, allow news publishers to capture more of the value they create.
Finally, when a news publisher’s own platform becomes a source of differentiation and competitive advantage, it must be nurtured and protected to stay ahead. Accordingly, publishers who fail to take control over key platform assets will be weakened in competition with the publishers who succeed.
This is good news for global media brands owned by tech giants such as The Washington Post that have resources and access to high-quality competencies in engineering, design, and AI. It should also be good news for national leaders in smaller media markets, which have greater capacity to develop their platforms than their national competitors. However, it might be another piece of bad news for small, local news publishers who struggle to find a solid model for their digital afterlife.