AI, bundling, and Big Tech platforms are key disruptors news publishers face

By Paula Felps


Nashville, Tennessee, United States


As news media companies look at ways to improve their value proposition in the digital era, they must move away from their traditional business models and look at where they fit in this tech-driven world.

During this week’s Webinar, INMA members heard from Benedict Evans, an independent technology analyst, who looked at some of the ways the industry is being disrupted and what it means for the future.

The Webinar, News media and technology: what we need to learn fast, presented by INMA’s Newsroom Initiative, looked at some of the biggest trends in technology and how publishers are affected by them.

The bundling and unbundling of newspapers

When Craigslist was founded in 1995, software engineer Craig Newmark essentially moved the classified section of the newspaper to an online format. But as technology progressed, other companies further unbundled Craigslist, and Evans shared a chart to drive that point home.

Bundling and unbundling products may give publishers the opportunity to see how things work together in different ways.
Bundling and unbundling products may give publishers the opportunity to see how things work together in different ways.

The 2010 image of a Craigslist homepage, overlaid with logos of companies that had unbundled a category of listings and created a separate industry, showed how different today’s world looks.

“This is of course long before Twitter, before Tinder, but all of those companies were unbundling some aspect of what Craigslist was doing and doing it with something that didn’t look like Craigslist,” he said.

Names like Airbnb, StubHub, Etsy, and Indeed served as examples of companies that sprung out of what used to be a classified advertising category in the back of the newspaper.

“They peeled something out of that and made it into some different thing that sold that underlying individual need in a different way — maybe with a different business model entirely — certainly with a different user experience,” Evans said. “This, of course, is also what Craigslist had done to American newspapers 10 years earlier: peeled off classified, which was one-half to a third of newspaper revenue, and unbundled it into something that looked completely different.”

He referenced a 1995 quote from former Netscape CEO Jim Barksdale, who famously said there are only two ways to make money in business: “One is to bundle, the other is unbundle.”

News media companies can start looking at how they can “break things apart or combine them in different ways,” Evans said. In a rapidly changing landscape, there could be many opportunities to rethink how products are packaged and sold.

Moving into the future with AI

Any conversation about the future today will include the effect that AI is having on, well, everything. Evans noted that the most recent wave of machine learning began in 2013, when computers were taught how to recognize certain things — such as a cat.

“The breakthrough of machine learning was that instead of telling the computer how to recognise a cat, you give the computer a million pictures of cat, and the computer works out what the rules are and how it would recognise the cat,” Evans said.

Fast-forward a decade, and ChatGPT has entered the game — although it has not entirely lived up to its hype.

“The thesis of ChatGPT is that you give it all the text that was ever created and that will constitute a proxy for understanding that will give it patterns of understanding and reasoning,” he said. “That will allow it to understand things in the way that people understand things.”

While it can answer many questions, it doesn’t always do so factually.

“It does not always produce correct answers, but the prose is so good that it misleads you as to how accurate the model underneath might be,” he said, adding that users need to be careful in evaluating any new technology “because new technologies tend to come in S-curves to begin with.”

Every tech innovation, from the Internet to mobile phones and beyond, have faced bumps in the road that had to be worked out, he said: “This new wave of generative learning is at the beginning of that process.”

The proliferation of platforms

One of the new challenges facing publishers is that platforms like YouTube, Instagram, and TikTok all have a complete system in place for content sharing.

“They have the publishing, content creation, editing, publishing, the viewing and the recommendation systems, and the metrics and the monetisation all built into one integrated system,” Evans said. “They’re a vertically integrated content system [with] content coming from third parties. You can publish stuff on YouTube and get paid.”

Users can also turn to ChatGPT to ask for the day’s headlines instead of following a specific news brand.

“That’s a fairly fundamental change in how the Internet works because this isn’t really the Web anymore. These are not links,” he said. “This is something that is synthesising and explaining stuff that’s on the Internet, but it’s not sending people to that site anymore in the same way.”

The advertising freefall

Of course, the changes in how users consume news are also felt on the advertising side, and Evans said many of the questions about newspapers and news are the same ones that were being asked in 2010 — or even in 2000.

Back then, he said, publishers “had an oligopoly of a certain kind of attention as the result of own printing presses. And that oligopoly of attention has gone away and the oligo of advertising and the option that you could offer to advertising has also gone away.”

Newspapers' share of advertising has been declining for nearly 100 years; not just since the dawn of the Internet.
Newspapers' share of advertising has been declining for nearly 100 years; not just since the dawn of the Internet.

Today’s readers and advertisers have many more choices and those just continue proliferating. But the conversation is one that is much older than the Internet. He shared a chart showing that newspaper advertising shares have been declining for decades.

“This is what happens when advertisers get new options, he said. They got radio, and then they got TV, and that money has been moving away in a straight line ever since.”

About Paula Felps

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