News publishers should rebalance their business model in face of generative AI search
Readers First Initiative Blog | 27 June 2023
Don’t loathe news consumers for choosing AI-generated search summaries over articles on news sites. We all are struggling with information overload. How to respond strategically?
In 2022, Oxford’s Reuters Institute surveyed 93,000 news consumers in 46 markets — 38% said they avoided the news, often or sometimes.
The proportion has increased sharply across countries. For example, it doubled in Brazil and the U.K. over the last five years, with many respondents saying they are worn out by the amount of news.
Across the world, avoidance was up 31% since 2019. But is it any news?
Information overload: Since the invention of the printing press in the 15th century, people welcomed more access to knowledge but complained about drowning in it.
“The Internet accelerated the information overload,” said Professor Dominik Batorski, a sociologist from Warsaw University, when we met over Ukrainian dumplings this spring.
I was intrigued by his perspective on the history of the Internet’s adoption as the history of solutions to the ever increasing overload, which he published with the Polish Academy of Sciences.
In the 1990s, when the World Wide Web exploded, people navigated Web sites via directories, such as Yahoo!
Soon the directories became too large to be useful. Search engines, such as Google, offered a hand.
In the 2000s, people were overwhelmed by the number of search results, so they figured they could ask friends for help. Facebook, anybody?
In the 2010s, everyone had hundreds of friends on social media, so they sought a respite among the close friends — on WhatsApp and other messengers.
In the meantime, content aggregators popped up, curating content algorithmically and tailoring to our interests. Predictive AI helped us survive in this ocean of blogs, newsletters, books, songs, movies.
Here we are in 2023. Professor Batorski sees the primary use case of ChatGPT, Bard and other AI bots as synthesising tools rather than content generation tools: “Nobody wants more content!”
He explains: “The easier it is to produce content, the more is available. The more content there is, the less attention any piece gets. Consumers’ demand for solutions inspires and drives the supply.”
Consumer-driven disruption: In the 2019 book Unlocking the Customer Value Chain, Harvard professor Thales Teixeira and I analysed patterns of decoupling-driven disruption across industries.
We looked at how Airbnb took over business from hotels, how Amazon competed with retailers, or how Uber stirred taxis. The big idea of the book is that it’s customers who really disrupt businesses and not technology alone.
We saw broadly two ways the incumbents responded to the challenge:
Some tried to recouple the activities in the value chain that consumers decoupled with new technologies, e.g., with product tweaks, new distribution channels, protective measures by lobbying, lawsuits, patents, contracts.
Others adapted to disruption by rebalancing their business models, e.g., capturing value at different stages of the value chain or charging a different party.
If the search companies scale AI-generated answers, and consumers accept them, news publishers will face a similar dilemma — how to respond strategically. Let us consider both paths.
Recoupling path: Firstly, how could media firms reassemble decoupled activities: news discovery and access?
Consent, registration, and paywalls: Protect content from scraping or summarising by challenging these practices legally. Unlock content for logged-in users only.
Direct and alternative channels: Refocus on driving direct traffic. Invest in apps. Deliver content directly to inboxes with e-mail newsletters or to phones with notifications. Reassess social media platforms.
Differentiation: Invest in your brand awareness so people can find you when at need. Offer more in-depth or opinionated journalism. Engage users in conversations around content.
Non-text content: Expand audio, video, and interactive content, e.g., quizzes and games, which are harder for AI to synthesise.
Rebalancing path: Secondly, how could media firms adapt their business model to the looming disruption?
Reader revenue: Double down on subscriptions, shifting the revenue mix from advertising to the model less dependent on reach and casual users referred by search.
User experience: Leverage AI yourself to better serve consumers by personalising recommendations, summarising, and explaining information.
Collaborations: Consider alliances with other publishers to create a combined offering that’s more attractive to readers and harder for AI to decouple.
Big Tech payments: Demand fair payments from AI companies for the value your journalism creates but they monetise.
News publishers might pursue both avenues, although we found the rebalancing path usually more sustainable in the long term.
Interested in applying AI to news marketing and sales? Read my INMA report from January, AI Guide and ChatGPT Promptbook for News Marketers.
Greg’s Readers First newsletter is a public face of a revenue and media subscriptions initiative by INMA, outlined here. Subscribe here.