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Short Term Pain, But Change Brings Long Term Gain

How can news media make money from online content? How can professional journalism ‘compete’ with UGC?

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Ed Hadfield

Proof 2010: Journalists Defending Journalism
Set 1, January 2010 The Scale and Origins of the Threat to Journalism

Introduction: No Place For Nostalgia

Traditional print media are in trouble and many have gone on record saying the newspaper industry in its current form is unsustainable. In countries where internet access is good, it is not hard to see why this is. Commuters who pick up a newspaper at the station before their hour-long journey to work, will find that once they have reached their office much of what is in their newspaper will already be out of date. Why, in the age of emails, blackberries, iphones and css feeds would anyone buy a newspaper other than for nostalgic reasons?

There is more: the internet is not like the newspaper which comes to the consumer as a finished product. The internet offers a level of interaction between the consumer and product which can increase the value of that product, and additionally the consumer can create their own products which, though separate from commercial media outlets, may enjoy almost equal status in the search engines’ results list (the newsstand of the virtual world). Furthermore, user-generated content (UGC) in the form of ‘citizen journalism’ offers a cheaper and more cost-effective alternative to professional journalism for editors looking to save money.

A combination of these factors and a dose of recession have combined to put pressure on the journalism industry, which as yet has been unable to come up with an alternative model. At the heart of this issue lie two problems:

i) How can news media make money from online content?

ii) How can professional journalism ‘compete’ with UGC?

Advertising May Pay Its Own Way…..

Theoretically the first problem should be less of a challenge. Newspapers make their main income through the sale of advertising space, and they may continue to do so on their online platforms. Indeed, the internet offers exciting opportunities for advertisers to create more effective marketing strategies. For example, news outlets could incorporate Web 2.0 into their sites allowing consumers to create their own ‘front page’ to suit personal preferences and interests. A more user-friendly and aesthetically imaginative version of Google News is not beyond the realms of possibility.

With increased participation and the capacity to build a platform to suit the individual, consumers reveal more personal information about themselves, albeit sometimes unknowingly. This information (as Facebook has shown) can be used to target advertising at consumers in a more effective way. The email updates and the feeds (which consumers subscribe to) give the advertiser another opportunity to target the consumer. This could act as a large incentive to create more original content: the larger the number of updates, the more opportunities there are for advertisers to make contact with consumers.

…Or It May Not

Of course commercial projections like this depend on a healthy advertising industry, and whilst advertisers are still spending money on new campaigns, they are not immune to the current recession. Like the journalism industry, they need to come up with a sustainable business model to fit the new paradigm; and it’s not yet clear that they will succeed in doing this.

In a recent blog (http://tinyurl.com/d87q2e) on TechCrunch, Professor Eric Clemmons argued that advertising simply will not work in this new medium which ‘is not replacing advertising but shattering it.’ Clemmons sited three main reasons for this: ‘Consumers do not trust advertising. Consumers do not want to view advertising, and Consumers do not need advertising’. His research shows that internet platforms where consumers (who are considered more objective then advertisers) can review products and services, make adverts redundant and unwelcome. Apart from their hostility to advertising, it is important to take into consideration the availability of software which enables consumers to avoid adverts altogether.

Whether this is an accurate prediction of things to come, or simply an apocalyptic exaggeration of the effects of the worst economic crisis since the 1930s, remains to be seen. Nevertheless, Clemons does raise some interesting points and it is hard to deny that, for news media to be successful on the internet, they must find another way to generate revenue besides advertising.

Adapt & Survive

Charging consumers for content is the most obvious way of doing this, and worth considering, especially since the idea was recently mooted by Rupert Murdoch (http://tinyurl.com/co2xqv). For the Financial Times, Lionel Barber also predicted that newspapers will start charging for online content with in a year (http://tinyurl.com/nk8sj7). The new problem therefore, can be summarised as follows:

Is it possible to make people pay for access to something that is currently free of charge, easy to re-produce (albeit illegally), and available from rivals such as the BBC who may have other sources of funding?

A parallel can be drawn with the music industry, which has been facing a similar threat from illegal file sharing but was (eventually) able to adapt to change. Music providers introduced their own legal download services which gave more choice to consumers, who can now download tracks individually rather then having to buy whole albums. Spotify and other streaming services allow users to listen to music for free, while charging a small fee that enables listeners to avoid interruptions from adverts.

In this newly emerging context, instead of the music biz going out of business, classic bands have reformed and recorded new material, and live music is increasingly in demand. There is certainly no lack of new music; if anything it is a lot easier for new bands to promote their own material without the backing of a major record label. New research cited in a recent Guardian article ( http://tinyurl.com/m4f44w) suggested that although it remains a problem, the number of illegal downloads is declining, with more consumers turning to legal services and streaming.

It seems that music consumers are prepared to pay for products and services if they believe the quality is a worthwhile investment. The same is true for journalism, as titles such as the Economist have shown with their growing readership ( http://tinyurl.com/ktk4cp). As long as an equilibrium can be found between what people can afford and the cost of production, there is little reason why journalism of a high standard should be at less of a premium than any other quality product or service.

Breadth Of Coverage, Depth of Quality

The question of quality brings us conveniently to the next issue: how professional journalism can ‘compete’ with user-generated content (UGC). Citizen journalism is often criticised on the grounds of quality, bias, and an inability to provide viewers and readers with a complete picture. Whilst one must recognise the limits of citizen journalism, it is certainly unfair to be so dismissive, since many citizen journalists produce work of a good standard. These charges also fail to acknowledge the collaborative nature of citizen journalism. It is often supported by sites such as Demotix which actively encourage collaborative reports made up entirely of UGC (http://www.demotix.com/page/hubs). This in turn allows for community regulation as well as the pooling of limited resources.

It is important to note that citizen journalism has made its biggest impact when professional reporters have faced practical difficulties preventing them from covering particular events. The terrorist attacks on Mumbai in 2008 prompted the use of Twitter by residents of the city who uploaded eye witness reports as events took place. Meanwhile mainly for safety reasons, professional journalists were unable to get so close to the fighting.

In the wake of recent protests surrounding the G20 summit in London, coverage by citizen journalists made a large impact, specifically with regard to the death of innocent bystander Ian Tomlinson. In this and other controversial situations, police statements were contradicted by footage taken by citizen reporters. Another good example of the positive effect of citizen journalism is the aftermath of the elections in Iran, when the authorities effectively banned foreign media and subjected Iranian journalists to intimidation. It is important to note that in both these cases reports from citizen journalists did not replace the work of professionals, but for whatever reason the key events were not captured by professional reporters. On the other hand, the limitations of citizen journalism must also be recognised: the footage which did emerge from the G20 and Iran was predominantly the work of activists, and thus questions of objectivity have arisen in relation to it. However, whilst citizen journalism might have limits in both these cases, user-generated reports did complement the work of professionals: the latter provided a valuable context in which to place the relatively raw data originated by the former.

Another interesting development is the recent unrest in China’s Xinjiang province, where the authorities uncharacteristically accommodated the international media by giving tours and holding press conferences (albeit with some restrictions), whilst at the same time blocking the tools commonly used by citizen journalists (internet and mobile phone networks). One wonders if one of the effects of UGC is that it has shown that restrictions on the press can be futile; also that it is in the interests of the state to accommodate respected journalists rather than unknown citizen reporters.

Of course, this could be an exaggeration and time will tell what the true effect of citizen journalism will be on authoritarian regimes. Nevertheless, as the above examples have shown, citizen journalism does have a valuable role to play in reporting the news, and regardless of some people’s low opinions, it is hard to see it disappearing. However, it is worth remembering that consumers are unlikely to pay for UGC in the same way that they might for the work of professionals, and it is this that might ensure the limit of its appeal to editors.

Ed Hadfield is a member of the editorial team at Demotix www.demotix.com, a user-generated news outlet and photo-agency. Ed is also preparing to take the MA in Journalism and Society at the University of East London.

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