In a crisis, people seek trusted news brands
Latest Reuters report highlights importance of trust, user payments, shift to digital
You’re reading the My News Biz newsletter, which I send every Thursday. My goal is to help digital media entrepreneurs find viable business models.
The annual Reuters Digital News Report always has up-to-date insights on how internet users around the world are consuming news and information. The most recent version did not disappoint. It includes survey data on users in 46 countries.
I would like to highlight several issues in the Report by giving you some quotes from the executive summary, followed by my comments.
Digital News Report 2021: “This [coronavirus] crisis has also shown the value of accurate and reliable information at a time when lives are at stake. In many countries we see audiences turning to trusted brands – in addition to ascribing a greater confidence in the media in general.”
My comment: Gaining reader trust is a long game. In the short term, many people are happy to follow sports, entertainment, and gossip from whatever source elbows its way onto their news feeds. But in a crisis, they look for sources that have proven to be professional and trustworthy.
The report noted that in countries with strong independent public service media, there was greater consumption of trusted news brands. Finland had the highest levels of overall trust (65%), and the USA, with its highly polarized news media environment, has the lowest levels (29%).
Digital News Report 2021: “Facebook is seen as the main channel for spreading false information almost everywhere but messaging apps like WhatsApp are seen as a bigger problem in parts of the Global South such as Brazil and Indonesia.”
My comment: In general, social media have been super-spreaders of misinformation about the coronavirus pandemic. This creates an opportunity for media organizations that work to distinguish themselves as producing trustworthy news.
Digital News Report 2021: The coronavirus “put a nail in the coffin” of print and accelerated the transition to digital. The collapse of print advertising, in part because newsstand sales weren’t possible during coronavirus lockdowns, forced many news outlets to look for other sources of revenue, mainly from subscriptions.
My comment: The decline in print subscriptions and advertising has been under way for more than a decade, but many newspapers’ only response was to cut costs in order to protect profit margins. This led to cuts in newsroom staff, news coverage, and product quality. Readers noticed and canceled subscriptions in a vicious downward cycle.
It was only the catastrophic collapse in print advertising caused by the coronavirus crisis that led them to take action and accept the fact that the future of news is digital. And that led to the next impact: paid digital subscriptions.
More users are paying for digital news
Digital News Report 2021: “Across 20 countries where publishers have been pushing for more online payment, 17% have paid for any online news in the last year – up two percentage points. Norway continues to lead the way with 45% (+3) followed by Sweden (30%), the United States (21%), Finland (20%), the Netherlands (17%), and Switzerland (17%). There has been less progress in France (11%), Germany (9%), and the United Kingdom (8%).”
My comment: The transition to business models based on user revenue rather than mainly advertising will be painful. Some news organizations will not be able to survive. They are burdened with huge capital costs, such as printing plants, distribution warehouses, and trucks. They have to transform themselves to digital products, processes and distribution, which might mean downsizing their newsrooms and focusing on niche content.
The focus on niche content works especially well for local and hyperlocal news organizations.
Related: My colleagues at the University of Navarra in Spain have produced the Digital News Report’s in-depth analysis of that country’s news consumers (in Spanish).
This newsletter is based on a blog post I wrote on my website, Entrepreneurial Journalism.