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Why The News Crisis Gives Us Hope

The News Is Dead, Long Live The News!
Joseph Cederwall - Scoop Co-Editor

“No one experiment is going to replace what we are now losing with the demise of news on paper...But over time, the collection of new experiments that do work might give us the journalism we need.”

- Clay Shirky’s seminal essay Newspapers and Thinking the Unthinkable

Credit: Amorim / Cartoon Movement

Scoop has exciting plans ahead for 2018 and beyond. The news media industry is coming to a critical juncture point. The increasing dominance of the digital platform monopoly giants and new developments such as Artificial Intelligence are contributing to disrupt the industry, render old ad-based models unviable and reshape the way we consume news. However, in all this crisis we see opportunity to create a new, more resilient and more decentralised future for independent news media.

There are encouraging signs globally that the crisis in trust facing the media is breathing new life and impetus into the challenge of ensuring a future with serious independent news coverage - i.e. news of real ‘public interest’ and quality investigative journalism in support of robust debate and a thriving democracy. The clear failure of the digital advertising model and the breakdown of the relationship between the news and social media platforms, means more than ever, people are realising the need for a new approach and new models to fund journalism. Scoop is among a pioneering groups of global newsrooms working to solve this many faceted problem.

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A New Media is possible, in fact it is already here!

“The media crisis is producing novel thinking, ideas and priorities. The stakes are high. The future depends as much on the readers, viewers and listeners of news media, as the practitioners.”

- Vanessa Baird, A better media is possible. New Internationalist

Fortunately Scoop is already ahead of the curve on this crucial work and has been operating under a new financial model called an “Ethical Paywall” which is the central pillar of our ScoopPro product. The “Ethical” part of the paywall comes from the fact that professional use licence fees ensure the continuity of free news media for the public. Professional users of Scoop are obliged to subscribe to ScoopPro under our advertised copyright terms of use. And through doing so professional users of Scoop help to fund the provision of Scoop’s service, as a thank you for doing so Scoop now offers additional incentives to comply.

Importantly ScoopPro’s “Ethical Paywall” approach is a systemic fix. It is neither a new way to deliver content, nor a more attractive advertising format, rather its a new way at looking at the value provided by News media to society and a means to recover the cost for services rendered from those people and organisations who derive the most value from the existence of quality news. It is also a simple solution that can be universally applied through the application of existing copyright law. And finally, it is a solution that incentivises news content creators and providers to provide accurate, timely and important news, not fluff, not entertainment and not fake news.

Over the next year we aim to work with our tech partner Enspiral and our community of readers and supporters to ‘level up’ this uniquely functional model for independent news. We plan to make Scoop an even more open and participatory project to achieve this end. This will involve the most comprehensive overhaul to date of the Scoop tech infrastructure - the software stack behind the website and ScoopPro services.

It will also provide an opportunity to re-think the corporate news model. We envisage enabling Scoop community members, clients and staff to purchase, earn and own shares in Scoop, making it New Zealand’s first community owned newsroom.

With this resilient community ownership structure in place, we then plan to ‘open source’ our technology, business practices and culture and to thereby spread both the Scoop model for publishing and our ‘ethical paywall’ innovation virally, to other news organisations, starting with struggling community and local news media organisations in NZ.

Why this is necessary? The destructive dance of the digital Giants

“The news media is witnessing its business models and production processes being remade by Web publishers and search engines. Google, Apple, Facebook, and Amazon have replaced media companies as the most important information delivery mechanisms within the space of a decade. Facebook’s value is now over $360 billion, twice as much as that of The Walt Disney Co., its nearest traditional media rival.”

The tech/editorial culture class, Emily Bell in the Columbia Journalism Review, late 2016.

The situation has not improved over the two years since Bell penned these words. Facebook is now valued at $479.4 billion, before the recent Cambridge Analytica scandal it peaked at $520 billion. It is now the leading vehicle for delivery of news. Recently it has been joined in the news distribution game by other platform news aggregators such as Apple News and Google News, both of which are innovating rapidly. Google (Alphabet) and Facebook combined now attract almost half of all online advertising spend. Some estimates put it even higher.

How did this happen? The Mainstream Media let it happen, that’s how.

The Media fell for the allure of Facebook as a delivery mechanism and played right into the classic disruption strategy of the platform monopoly. As bookstores succumbed to Amazon, so too the Media is falling to facebook. As Josh Constine of TechCrunch puts it:

“‘Big news outlets stupidly sold their soul to Facebook. Desperate for the referral traffic Facebook dangled, they spent the past few years jumping through its hoops only to be cut out of the equation...”

For example, Facebook encouraged new content types like live video, only to suddenly change course and withdraw or change monetisation opportunities. In some countries, Facebook suddenly, without warning, withdrew publisher posted content from reader news feeds altogether.

The ‘Stories’ format on Facebook is highly limited and restricts journalistic innovation. Prior to the rise and rise of Facebook, the possibilities of technology meant journalism was entering a period of innovation never seen before. Stories such as the legendary award winning New York Times piece Snowfall covering a tragic avalanche were experimenting an innovative mix of print, video and in depth data journalism. Such formats hardly mesh well with the Social media space with its one size fits all and clickbait approach which favours misleading headlines, listicles and evergreen content (most of which are for news purposes, useless).

Additionally, not many newsrooms have the resources to put into such detailed coverage when forced to compete with the self same syndicated clickbait, listicles and videos of piglets eating vegan sushi.

Here is a piglet eating vegan sushi video to lighten the mood:

The Crisis - driven by data surveillance

Vanessa Baird, co-editor of New Internationalist outlines how this saga unfolded in her excellent essay A better media is possible. She cites British academic Angela Phillips as saying that research shows that Facebook and Google “thrive on division and abuse rather than research and debate.” Their “success” depends on an emotional reaction and, “what makes people share more than anything is anger”. In this divisive environment accuracy falls by the wayside, as sensationalist or outrageous fake news gets many more clicks than nuanced considered reasoning and facts.

The Independent reported in December that the chair of the Home Affairs Committee warned representatives from Facebook, Twitter and YouTube that they are aiding terrorist groups by letting their own algorithms radicalise people and draw them into a “bubble of hate”.

The Cambridge Analytica scandal highlighted the use of personal data “scraped” from an estimated 87 million Facebook users for the purpose of covert, micro-targeted political advertising attempting to swing elections. Baird states this has “shone a spotlight on a system that has been operating for years: collecting and hoarding personal data, to sell on to third parties.”

In many ways this is a colossal understatement. These companies - and the myriad of new digital advertising services built on these mountains of data - consider that the source of their commercial power and wealth is not the content, but the information on who reads what, i.e. your data.

Content, in this paradigm, is close to worthless, eye candy around which one can display adverts. Media companies have even been sucked into this way of thinking and many private equity owned news media companies publicly talk about their being in the business of selling eyeballs rather than news.

In other words both Facebook and Google (which owns YouTube) have used their “free” navigation services, in Facebook’s case entirely populated by us users, to extract information from their users on an unprecedented scale. This plundering of privacy is the fundamental ingredient of this surveillance capitalism.

Facebook is now in the process of hiring "news credibility specialists" to help them “begin to build out a process for verifying different news organizations.” However, even as Facebook tries to solve the problem of lack of transparency about the ads it runs on the platform, it seems to have created another one by yet again confusing the function of news.

Facebook pushes news ads & political ads through the same sausage machine

As this is published, news publishers are up in arms over the fact that the social network plans to treat certain promoted news stories as though they are political ads. The News Media Alliance and seven other media organisations including the American Society of News Editors, the European Publishers Council, and the Society of Professional Journalists have sent a letter to Facebook saying the move could lead to a (further) loss of trust in the press:

"Placing news ads in an archive designed to capture political advertising [is] another step toward furthering a false and dangerous narrative that blurs the lines between real reporting from the professional media and propaganda."

We have trust issues!

Not surprisingly, all of this has not exactly done much for the trustworthiness of the Media. Former NZ Herald Editor Gavin Ellis labels this a crisis in his essay The Media We Want By 2020:

“There is one issue, however, that the industry and its journalists must not ignore: they face a crisis of trust. There is an urgent need for society’s trust in professional journalism and media institutions in New Zealand to be significantly raised.”

According to the 2018 Edelman Trust Barometer, global confidence in the media has fallen to an all time low. In 22 of the 28 markets surveyed it is now the most distrusted institution.

In NZ, a survey conducted in 2016 by Colmar Brunton for Victoria University’s Institute for Governance and Policy Studies showed that less than 10 percent of the population resided the same levels of trust in news media and our politicians to do the right thing. (Figure 3).

As Ellis puts it: “In other words, citizens have a low regard for the politically powerful and a similar view of the group that society once saw as holding the powerful to account.”

Perhaps this is because the majority of us clearly see the reality that this former role of the Press has broken down. The Mainstream Media has become entirely too close to Government and corporations and is far too seldom willing to stand up to them on issues that really matter.

The societal ramifications of the disappearance of a trusted and impartial source of news media are, however, arguably far more serious than the disappearance of bookstores or taxi companies. We rely on the media to inform our democratic choices and let us understand the complex world and break down barriers. However, this social media crisis has seemed to make our differences more pronounced and polarise us as a society more than ever.

AI - Disruption coming to a news network near you

On top of this, AI will soon reshape and disrupt the news industry. Drones, virtual reality, automated storytelling, data journalism, analytics, robotics and social media are all aspects of this impending technology wave. The technologies in themselves are positive, or at least neutral, and in most cases can do much to provide better or more cost-effective ways of doing the job journalists now do.

A recent RNZ mediawatch story covered the profound effects the influence of AI will have on the news industry in New Zealand. This story featured the now famous machine that writes Mike Hosking opinion pieces. Some might argue that doesn’t exactly signify ‘intelligence’, but the point remains that overseas newsrooms are already increasingly using AI for real tasks such as:

Automated news writing (The Washington Post uses 'smart software' called Heliograf to crunch data and write basic political coverage.)

Scanning social media for scoops (Reuters News Tracer project detected the bombing of hospitals in Aleppo and the terror attacks in Nice and Brussels. On average it was 8-60 minutes ahead of other media giving Reuters a huge jump on competition.)

Comment Moderation (The New York Times is using AI to moderate comments and eliminate harassment and abuse without taking up valuable human time.)

Combating fake news (UK project Full Fact automatically analyses media to catch the entire life cycle of every falsehood and counter them with facts.)

This new avenue of innovation will only become busier over coming years. While the position of skilled journalists will not be redundant any time soon, it is clear that organisations adopting AI will be at a significant advantage over their competitors.

However, it is crucial that we do not lose the human element in journalism and that there is still a place for skilled humans to ensure human values of freedom, human rights, humour and compassion form part of the media of the future. Getting the structure of news organisations right now is a crucial step in ensuring these crucial elements are not lost in the face of a tech and AI onslaught.

The grim reality for News Organisations

As a result of this digital platform takeover, paid jobs in journalism are ever harder to find and poorly paid. Newsrooms have been eviscerated worldwide and New Zealand is no exception. Half of all newspaper jobs in the US have been lost in the past 15 years. In Britain more than 200 local papers have closed and the number of regional journalists has halved. An estimated 58 per cent of the UK has no daily or regional title. Even the new digital media is suffering: Buzzfeed recently cut a third of its UK staff with further job losses in the US.

The plight of independent and local community level media has further accelerated the consolidation of media ownership globally. In the US, pro-Trump conglomerate Sinclair, the second-largest television station operator in the United States, is taking over Tribune to create a new, super-dominant TV-station group in the United States with 200 television stations nationwide. You may have seen this video about Sinclair’s dystopian coverage of ‘the dangers of fake news to our democracy’:

Sinclair makes no bones about its political intentions in building a conservative media empire. And any observer of U.S. Politics would understand that right leaning political discourse is aggressively militant, militancy that is spreading out around the world even here to New Zealand.

Meanwhile, had the NZME/Fairfax merger been allowed (or if it is allowed) New Zealand would have the second most consolidated print media ownership market in the world, after China, which essentially only has one Media organisation - the Government:

The Journalism Media and Democracy (JMAD) New Zealand media ownership report 2017 outlines that in 2017, commercial newspaper publishers, NZME and Fairfax, continue to dominate in print and online news markets. The report estimates their combined online audience, measured by the total visits for Stuff and, was almost five times larger than the largest four competitors. Despite this 16 Stuff community and rural titles, closed in 2018 as the company "pursues a stronger digital publishing strategy."

NZME and MediaWorks continue to have a duopoly in the radio market, and commercial television broadcasting is still in the hands of TVNZ, MediaWorks and Sky TV. The JMAD 2017 report cautions:

“These companies have substantial market power, and it is important to remember, that they and other major media companies are owned by their financial shareholders whose primary interest is to get the best return on their investment.”

The JMAD report also outlines the ongoing difficulties facing NZ’s commercial broadcasters . In 2017, MediaWorks was loss making and previously, in 2013, it was placed into receivership. TVNZ’s revenue and profit are falling, and Sky TV is losing customers and revenue. Similarly, in 2017, the Australian Ten Network went into voluntary administration, and was bought by CBS. Such outcomes could also occur in New Zealand leading to further consolidation as large media conglomerates seek to expand their reach to our shores.

According to Gavin Ellis, the Media faces an additional structural impediment in NZ due to the fact that the major media companies – apart from state-owned media (Television New Zealand, Radio New Zealand and Māori Television) and the Otago Daily Times’ publisher Allied Press – are foreign-owned (and mostly financial investor owned). This means extended chains of command and differing priorities contribute to inertia and risk averse attitudes. Mergers between companies such as the proposed Stuff/ME merger would do nothing to increase innovation. Ellis points out that the merger approach is essentially adopted as an unimaginative alternative to innovating.

For decades of decline the owners of news companies in New Zealand and elsewhere have been focussed resolutely on extracting the maximum return they can whilst cannibalising the businesses. You could call this hyena capitalism, but in the case of news companies, hyena capitalism which also contains opportunities for messing with politics.

A Failing Financial Model - Information wants to be free

“Information Wants To Be Free. Information also wants to be expensive...That tension will not go away.”

- Stewart Brand in an address in 1984

The financial model of the news industry cannot continue as it has been in the face of the above-mentioned disruption. Those news organisations still entirely reliant on advertising will no longer be viable as these revenues continue to dwindle.

The direction of travel for print advertising revenue is steady and inexorable in a downwards fashion. Meanwhile revenue increases on the digital side are a stop, start and backslide affair.

However, some commentators now predict online advertising may be about to implode altogether. Major global corporations have already lost hundreds of millions of dollars to advertising fraud – whereby robots rather than humans generate page views and video play. Growing numbers of people are using digital ad-blockers to avoid intrusive ads anyway, so the pay for eyeballs model is increasingly no longer viable.

The fall out from the Fake News and Cambridge Analytica scandal has led to a significant increase in reader wariness about privacy issues, a rise in the use of ad-blockers, and spurred on by the European Union’s General Directive on Privacy, the advent of an increasing variety of systems to protect users from advertising.

A glimmer of hope in the crisis

“.let’s not forget the media minnows. Fuelled by idealism and journalistic ethics rather than the profit motive, they are developing new ways of working and organizing, of funding and governance.”

- Vanessa Baird, A better media is possible

This is not the end, however. Inventor of the Web, Tim Berners-Lee in the Guardian refutes the notion that ‘advertising is the only possible business model for online companies, and that it’s too late to change the way platforms operate’. He believes we need to be more creative, “I want the web to reflect our hopes and fulfil our dreams, rather than magnify our fears and deepen our divisions.’

As Vanessa Baird outlines in New Internationalist, globally, independent news organisations are showing signs of resurgence and finally fighting back against the fake news and clickbait problems. She postulates that this means we could be entering an era of enhanced media education and critical thinking. Media commentator James Breiner also believes credibility is set to become the ‘new currency of journalism’.

Long-form investigative journalism appears to be back in fashion and increasingly, people seem to want public-service journalism that holds authorities to account. Independent investigative outfits such as the ICIJ are collaborating internationally to great effect as in the Panama papers and Paradise Papers investigations.

In this area New Zealand has also seen a flowering of innovation, after nearly a decade and a half as the undisputed heavyweight of independent online news in NZ, in 2015 was overtaken by The Spinoff in reader numbers, and then in 2017 Newsroom exploded onto the scene winning plaudits and traffic alike. And for nearly a decade NBR has also been pioneering new methods of revenue-raising with its paywall and digital radio products. In fact, according to The Journalism Media and Democracy (JMAD) New Zealand media ownership report 2017, 2017 was the first year in which the number of private news organisations in New Zealand outnumbered the public ones. (TVNZ, RNZ, Maori TV).

[NOTE: In a later article in this series we will go into more detail about the business models being employed by these news startups, how well they are working and our plans to further innovate in this space.]

In addition, the potential of new technologies such as the blockchain and AI will enable innovation in the space of verification, transparency and combating fake news. In fact just today, the company behind AdBlock Plus has announced a blockchain-based chrome extension to combat fake news called Trusted News.

Scoop is actively pursuing innovations in this area in order to play our part in solving the issues of trust in the media.

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Scoop has a working solution to this challenge

Thankfully for Scoop, we have already been in the process of transitioning to our ScoopPro model. Our innovative ‘ethical paywall’ licensing approach now generates the majority of our revenue and reduces or susceptibility to the vagaries of the advertising market.

This approach ensures both the freedom of this vital information for the public, as well as ensuring Scoop is compensated for its role in distributing this information. In a sense it resolves or at least ‘elegantly sidesteps around’ the very tension Brand was talking about back in 1984.

Hard paywalls are in our view, neither an ethically sound or good business idea as they limit readership and public access to information. The ScoopPro model on the other hand, ensures we receive money from commercial users of Scoop and are able to stay afloat without charging the general public for reading Scoop.

Scoop is currently the only New Zealand Media company owned by a non-profit charitable trust, The Scoop Foundation for Public Interest Journalism. Gavin Ellis’s recent book Trust Ownership and the Future of News - Media Moguls and White Knights explores the past and present use of newspaper trusts – drawing on international case studies such as the Guardian, the Irish Times and the Pulitzer Prize winning Tampa Bay Times. In his book he strongly makes the case for this form of ownership dedicated to sustaining high quality journalism.

However, as mentioned above, we are not stopping there, and seek to further decentralise the Scoop Publishing Company by opening it up to community ownership. An exciting precedent for this approach is New Internationalist which last year launched the largest media community share offer to date raising GBP 700,000 and as a result is now cooperatively co-owned by more than 3,000 of its readers and supporters.

Scoop is tantalisingly close now to self-sufficiency through the ScoopPro model, but just need a few more clients to join ScoopPro and a few tech changes to reduce overheads in order to get there.

In a coming article we will talk in greater detail about how the numbers stack up and where we are on the path to full sustainability, but suffice to say for now that the generous support of readers in fundraising campaigns is the only reason that we have managed to get this far in transitioning to the new model.

As Scoop continues this transition to an exciting new technological approach and upgrades the media tools we offer, these Professional organisations using Scoop will get even better value. This value will continue to be passed on to the public by ensuring continued free access for all to the Scoop archives and breaking news.

We have a range of ScoopPro packages suitable for Organisations of every size and type starting from as low as $25+GST monthly

Click here to register your organisation to receive the benefits of ScoopPro

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