How journalism can be seriously profitable

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The market has dropped out from under journalism. Revenues are plunging, along with staff counts and salaries.

But the death of journalism is by no means assured. There are proven, profitable models that are bucking the trend.

The trends in media are little different from the trends in most other industries disrupted by technology: products are becoming unbundled, and the middle of the market – which has historically provided a broad menu of content – is being hollowed out. What remains is either high-end, expensive, high-quality content (think the Financial Times or the New York Review of Books) or mass market, high-volume, cheaply produced content consisting of a mix of free user-produced work, clickbait, and data-scraped content on a variety of platforms, from TikTok or Facebook to any number of the proliferating websites staffed by hordes of interns frantically publishing press releases.

If your content is not highly specialised, then you find yourself competing with some of the most powerful influencers or news organisations in the world – not a position where you’re likely to gain much traction unless your content is exceptionally brilliant, original and viral.

With falling revenues and ever-shrinking newsdesks, quality is naturally falling as overworked and underpaid journalists are increasingly called on to do more with less, assailed by readers and managers alike.

Traditional news houses are therefore losing their main asset: credibility. A May 2020 Market Facts & Opinions survey ranked local newspapers second to last for trustworthiness out of a range of news media.

The “full service” model of many traditional media houses, unless they are vast international outfits with stellar brand names like the New York Times, is becoming untenable.

How can good-quality journalism be competitive and profitable in a market like this?

The answer is trust, and depth. If the quality of journalism inspires trust, and provides a level of depth that viewers cannot get from their cousin’s social media post, or from an online data-scraping site, then journalism will gain a comparative edge. That’s why highly trusted international organisations like the Economist have actually gained market share.

That means that in order to make money, journalism as a business needs to be highly specialised, highly localised (in some cases), and use targeted data in order to drive high levels of engagement from consumers. That also means the types of advertisers it should target are equally low-volume, high-margin firms or companies, particularly those whose customers are other businesses and for whom engagement matters more than reach.

In order to sell to those companies, sales team must use data – or they will be roundly ignored by advertisers accustomed to their analytics dashboards. Any news site must incorporate targeted advertising that ensures that viewers are seeing advertisements related to what they are viewing (I was gratified to be targeted by an advertisement for an energy drink on my article last week on sports innovation, so at least this paper seems to be doing that).

Types of advertising must also adapt as consumers become increasingly immune to traditional advertising. Sponsored content must be part of the revenue model – once it is transparent and engaging.

Sales teams must deeply understand the product they are selling. That’s why some of the most profitable recent companies like France’s Mediapart or Spain’s Eldiario are both run and owned by highly paid investigative journalists, freed from the demands of producing news stories that compete with algorithms and press releases.

Too much of the debate has focused on whether to throw up a paywall or not, and not on what actually goes behind the paywall. Nobody will pay for anything unless it is obvious the product behind the paywall is an order of magnitude better than what the company is giving away for free.

The new journalism is blurring the lines with market intelligence and expert network consultancies. That’s because someone needs to pay for it, and people and companies are far more willing to pay for content that makes them money. The most famous example of this model is the Economist Intelligence Unit (an old favourite of many an investment banking analyst wielding their copy-paste buttons). Bloomberg and Reuters are doubling down on this model. There is a significant local gap here – and an opportunity for journalists to partner with data scientists.

Investing in quality and specialisation is the only route to profitability. Journalists and investors must fight back. The very fate of democracy and a free press are at stake.

Kiran Mathur Mohammed is a social entrepreneur, economist and businessman. He is a former banker, and a graduate of the University of Edinburgh