The digital news business is slowly falling apart across the world—because it simply doesn’t make money. In part one, we explain how the ad-supported model was destroyed. In part two, we look at why news is like oysters—and how that affects the subscription business—the remaining lifeline of digital publications. Also: the good news about a way out of this very deep hole—both for the industry and splainer:)
Editor’s note: In India, news outlets exhaustively analyse every industry—except their own. Publications mysteriously shut down or go into hiatus (See Fiftytwo.in or The Signal) but no one talks about what’s happening—or why. We decided it’s time to change that.
News, a four letter word
Over recent years, news sites have increasingly accepted the harsh reality—they are never going to pay the bills with ad revenue. Even the mighty Times Internet’s online losses widened to Rs 4.9 billion (490 crore) in 2023—from Rs 3.4 billion (341 crore) a year before. That’s why many are retreating behind paywalls—or at least hiving off “premium” content (Hello TOI Prime).
This is, of course, the rational response to the social media sinkhole. Let’s try something new or rather—return to the old: A direct monetary relationship with our audience. But there’s a slight problem. Many people don’t much like the news—and that number is increasing with each passing year.
Rise of news avoidance: Where we once talked of news fatigue, we now have a new word: “news avoidance.” It describes a growing and worrying trend: People are actively avoiding any contact with news. According to the latest Reuters report, around four in ten (39%) say they sometimes or often avoid the news. The number who say they feel overloaded by the news has jumped by 11 percentage points since 2019.
Overall, fewer people are interested in news—year on year. That means they are also less likely to pay for it:
Issues of news overload and fatigue, highlighted in our Digital News Report for more than five years, have become a major preoccupation for news executives. Research shows that despite – or perhaps because of – the political and economic upheavals of the last few years, many consumers are engaging with the news less often or not at all. ‘Information fatigue is eating away at our reader’s willingness to read and pay for our content,’ says the editor of one European membership organisation.
Or as one Danish editor puts it: “People don’t miss journalism. But journalism miss people.”
Data point to note: The 2022 Reuters survey found that 78% of 18- to 24-year-olds access news via aggregators, search engines and social media. It will be even more difficult for individual publications to forge a direct relationship with Zoomers. FYI: 36% of people under 35 say news “brings down” their mood. It’s hard to sell a product that’s a bummer.
Who pays the bill? That’s the biggest question facing the news industry around the world. Data shows that even in the wealthiest nations, the appetite to pay for news is about 17% on average—and it has not budged in the last three years. In countries like the UK, the number is as low as 8%. There don’t seem to be publicly available data for India—but presumably the appetite is even lower.
Don’t like ‘em oysters: The most depressing revelation in the Reuters report is that nothing will push people into paying for their news—if they don’t want to. Free trials don’t work—neither do large discounts:
In addition to asking news subscribers how much they paid, we also asked non-subscribers how much, if anything, they would be willing to pay monthly for an online news subscription. The headline finding is that, across the 20 markets we track, the majority (57%) would not consider paying anything… Our data document that much of the public does not believe online news is worth paying for.
In the book ‘Avoiding The News: Reluctant Audiences for Journalism’, the authors offer this apt analogy:
People who really like oysters may have strong views on oyster refuseniks and maybe a prejudice or two about what their (unreasonable) distaste says about them—and vice versa. Indeed, you might like oysters, yet “I don’t like oysters” is their opinion. They certainly have no intention of spending their hard- earned cash trying to learn to like them. There is, after all, so much else to consume and enjoy. As you can see, efforts to get them to appreciate oysters that focus only on improving standards of oyster quality (let alone serving up more oysters) probably won’t change their minds.
Substitute ‘news’ for ‘oysters’—and it explains why people who won’t pay for news often cannot be persuaded to do so.
The ‘middle’ will not hold
Some of the biggest players are still doing well—because they have the reach and muscle. More accurately, they can offer a ‘bundle’—which allows them to gobble up that small slice of the subscription pie. Example, the New York Times:
Over the last year, the New York Times has been moving as many of its customers as possible to the ‘all access’ bundle, which includes NYT Audio, The Athletic (Sport), Wirecutter (reviews), Cooking and Games. CFO Will Bardeen notes that ‘bundled subscribers retain and monetize better than news-only subscribers’ and the Times has an aim to get 50% of its 10m subscribers to take up the offer. Games like Connections, used by around 10m users a week, are designed to build habit and affinity as well as drive referrals to news.
Read that again. The Times uses recipes and games to direct traffic to its journalism. The point remains that if people want more bang for a subscription—the biggest boys are best positioned to offer it.
A crisis in the middle: Writing in the New York Times, Ezra Klein argues that the internet—or rather Substack—has been kind to the individual writer: “A small audience, well monetized, is a perfectly good revenue stream.” But the moment you need to pay for any kind of newsroom that revenue stream doesn’t scale up:
That’s where media is right now: You can thrive being very small or very big, but it’s extremely hard to even survive between those poles. That’s a disaster for journalism — and for readers.
FYI: In India, every standalone digital news site you can name is either in the middle—or aiming for it.
But, but, but: Should the publications survive? Hard-ass VCs would say that the market has spoken. If news doesn’t sell, well, we’ll just have less news. OTOH, Ryan McCarthy in Fast Company argues that the news business is, in fact, experiencing a classic case of ‘market failure’:
In a failed market, the free market produces too much or too little of a particular good, and the consequences of that mismatch hurt society. The incentives in a failed market tend to make the world worse. Think of a market that makes it profitable to pollute, for example. Or a digital platform that incentivizes clickbait.
That’s exactly what we are all experiencing: News pollution. We are choking on fake news, copy/paste journalism, hot takes, angry rants—all of it dictated by what the algorithm favours.
What’s next: The tricky road ahead
The news environment is dire now. It will not remain dire forever. In the end, news is a basic need—whether people realise it or not. But until the larger context changes, the minnows will have to figure out how to survive.
Yet another video pivot? The Reuters report shows a steady and significant rise in the popularity of video news—across the world: YouTube is used for news by almost a third (31%) of those surveyed. In India that number is around 50%. Also this: Short news videos are viewed by two-thirds (66%) each week—while longer formats account for 51%. In India, 81% watch a short-form news video at least once a week. And YouTube is the number one online source for news (54%)—beating even WhatsApp (48%).
Point to remember: YouTube’s largest audience is in India—with 476 million users.
Rise of news influencers: YouTube’s popularity has also changed who shapes the conversations around news. Unlike Twitter (X), it is a “range of so-called online influencers, creators, and assorted personalities, as well as smaller, alternative news outlets and ordinary people.” In India, people are more likely to watch a Dhruv Rathee or a Ravish Kumar—than the India Today channel.
Rethinking value: In his analysis of the Reuters data, Dr Craig T Robertson writes:
Whatever the monetisation approach adopted by news brands, however, it is incumbent on news organisations to showcase their value to audiences, demonstrating why they are worth paying for. The industry has many different techniques to encourage people to pay, but they will only do so if it enriches their lives.
But how do people define value? As we noted before, the New York Times has found one answer—to broaden the value it offers beyond news—including product reviews, cooking, games etc. Publications that remain on their high horse—insisting news is and must be valuable in itself—may not survive. Not unless they too can become a part of a valuable bundle—perhaps with other media subscriptions.
What’s next for splainer?
A good founder is humble, agile—and listens to data. What I hear—loud and clear—is a clarion call for new thinking and a new strategy—if splainer is to survive the slings and arrows of this news environment. I started first by thinking about splainer’s value.
Defining value: In my mind, there has never been any doubt as to the value of curation—a word greatly degraded by the internet. As author Kyle Chayka told Ezra Klein:
The value of curation… is “not just telling you what to consume. It’s giving you this holistic education and insight into how things work, into the context of objects or ideas. It involves vast amounts of labour and time and work to present objects or ideas or songs or whatever in the context that they deserve. And I feel like that’s been lost on the contemporary internet.”
That is perhaps the best and most precise definition of what we do in splainer. We will never stop doing it. But if subscriptions are always going to be an uphill battle, how else can we leverage our core competency to pay the bills?
Answer #1: A high-value YouTube channel that leans in on splainer’s unique ability to explain the world. Until now, we’ve been doing low-stakes, low-key experiments just to test the waters. We will be soon throwing time, energy and resources into creating an entirely new video product—which is way more than just a rehash of our text edition. Wish us luck!!
Answer #2: We can hardly match the mighty New York Times—and acquire entirely new verticals. But unlike other publications, splainer has a strong foundation to build strengths beyond news. The Advisory has been a modest but significant start. It helped us extend our greatest talent—discovery—into new areas. Many of our subscribers rely on our recommendations to figure out what to watch, buy etc. (As do we, by the way. Thank god for the Amsterdam guide!) But again, the quality has been erratic. Some stuff is great, some middling.
Over the coming months, I’ll be working hard at building a high-value recommendations platform for our subscribers. As with news, we find it harder and harder to find trustworthy, useful advice on music, entertainment, books, travel and more. There is so much garbage out there that most of us have returned to relying on family and friends. Maybe splainer can help fix that—with the same diligence, integrity and quality we bring to news.
The coming tradeoff: We are a small and mighty team. We can’t exactly throw money at our problems. But we can be smarter and more efficient in how we use our time and resources. So here’s what splainer will be doing starting next week:
- We will drop a single big news edition every Monday. It will have everything you love—our Big Story, list of good reads, the quiz and those intriguing/curious lists.
- Monday through Friday, we will send out a separate newsletter with an expanded version of our Headlines That Matter. By popular demand, you can read them in your email—or on the app.
- The Advisory will remain the same—while we work on a more valuable avatar.
- The bad news: We will only do a single Big Story each week—to give us time and energy to work on the YouTube show and more.
- But, but, but: Our top headlines will be more detailed—more like mini-big stories. So you will always know what’s up with the world:)
About your subscription: You must wonder, why am I then paying for less content? Fair question. That’s why we are adding three months (worth Rs 1000) to all annual subs—and one month (worth Rs 299) to all quarterly subscriptions. And we are reducing the price of our subs accordingly. We’re confident that you will find the new and improved splainer full paisa vasool:)
The bottomline: We’re doing what we can to do what we do best. If you have more questions, complaints and suggestions, I am always available at lakshmi@splainer.in.
Reading list
Reuters Institute’s digital report is worth a read—as are its recommendations on how to respond to news avoidance (which basically sums up splainer). This part of the report looks specifically at India. Nieman Lab looks at the new pivot to video. Ezra Klein on the collapsing middle in the New York Times (splainer gift link) is a must-read. As is Ryan McCarthy in Fast Company on market failure.
