“Newspapers are in trouble, Journalism is not”

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Chapel Hill/Austin/Karachi

When digital disruption hit newspaper businesses in the United States, most publications rushed to launch their Internet versions, some even tried paid walls. But, revenues from digital didn’t grow as expected, leading to speculations that print journalism was dying.

Even today, academics, entrepreneurs and publishers are worried about what could be a sustainable business model for the newspaper industry — and they have a reason to. In the last decade, the business from print ads, which was once 80% of newspapers’ revenue, has dropped from $62 billion a year to $12 billion, but earnings from digital have remained almost flat.

“Since 2007, half of the reporting jobs in America have been lost. As a result, local communities lost reporting resources,” said Ryan Thornburg, Executive Director of Reese News Lab, an initiative of the University of North Carolina at Chapel Hill that is teaching students to become entrepreneurs and look for new business models in the media to create jobs.

“We are teaching students to come up with innovative ideas, pitch them and fail fast so they can start over and repeat till they succeed,” Thornburg told a group of 18 international journalists during a visit of UNC, which was part of the Foreign Press Center Tours 2017.

The lab teaches entrepreneurship in media as a tool to tackle the creative destruction facing journalism. Moreover, UNC has made it compulsory for everyone to take the audiovisual course so they could learn the vocabulary of digital.

“We [the journalists] need to believe we can reinvent,” said Susan King, Dean School of Media and Journalism at UNC Chapel Hill. “We are producing students who will create journalism tomorrow. We make them learn economics of journalism.”

The culture at Reese News Lab, an example of which is hard to find in any journalism school across Pakistan, is very similar to what one can experience at a technology incubator: students come up with startup ideas, pitch them before their mentors who critically assess their commercial viability.

Journalism schools may not have thought about teaching entrepreneurship to students a decade ago, but it was inevitable — according to a report by PEW Research Center, the number of daily newspapers have reduced by 100 since 2004.

The academia seems to have responded to the changing times but statistics for the past decade aren’t very impressive. With an average 10 newspapers closing every year (between 2004 and 2014), the sad state of affairs certainly begs one question: is Journalism in danger?

  

“Newspapers are in trouble, journalism is not,” says Prof. Rosental Alves, who is Director of Knight Center for Journalism in the Americas. “It [Journalism] may be different today than what it was a decade ago,” the Brazilian acknowledged while speaking to the same group of journalists who also toured Journalism School, University of Texas at Austin.

Giving an example of Fernando Rodrigues, a senior political reporter and his former colleague from Brazil, Alves said the former was fired in 2014 by Folha de S. Paulo, Sao Paulo’s largest newspaper, but started his own news business.

Rodrigues launched Poder360 Jornalismo, a paid newsletter for corporate subscribers. It covers important policy news of Brazilian government and offers analysis on the same. “He made a lot of money from his newsletter because he was the finest political reporter there,” Alves said of Rodrigues who later hired 20 people and launched a full-scale news website, which now attracts 1 million unique visitors per month and is seen as a successful digital publication.

 

“Journalists and newspaper owners need to think beyond the basic ad and subscription model,” Alves said adding they have to find other ways of making money. Though he gave examples of  digital publications like Vox, Politico and BuzzFeed as success stories, the professor enthusiastically discussed the success of The Texas Tribune — an Austin-based digital-only newspaper, which, earned $1.4 million in profit within three days from a single event.

The Texas Tribune: a case study for aspiring entrepreneurs and newspapers in Pakistan

If current numbers are any indicator, newspapers in Pakistan are likely to face digital disruption very soon, if it has not started already — courtesy a significant rise in the number of the country’s Internet users and double-digit growth in the digital ad spend.

Since the April-2014 auction of licences for 3G and 4G technology, telecom operators have been adding more than 1 million new Internet users per month to the country’s broadband base, which currently stands at 40 million. As a result more people are using social media, resulting in digital ad market’s growth.

The digital ad spend of Pakistan is expected to grow by at least 40% in 2018 from the current $20 million. As per market estimates, it can reach to 30% of the total ad market by 2020, up from the current 15%, Profit has already covered this in a previous report.

With brands diverting more money towards digital, newspapers’ print business is likely to bear the brunt and will eventually lead to more layoffs in an already tight job market. In fact, this may have already begun: a top-tier newspaper and New York Times’ Pakistani affiliate The Express Tribune fired more than two dozen staffers last year because of what media reports say was low circulation numbers, which forced the company to cut costs. With plans to increase focus on the digital side, the publication merged web and print desks resulting in a few more staffers to leave earlier this year.

However, unlike Politico and Poder360, which were founded by out-of-job or retired journalists, some of those who were laid off from or left The Express Tribune struggled to find jobs that matched their qualifications. A few even switched careers to development sector. On the digital front, publications like ProPakistani have done well, but they are narrow in scope of their coverage.

As print media in Pakistan braces itself for a creative destruction that stormed the journalism industry in the United States, the innovative business model of The Texas Tribune can be an interesting case study for aspiring entrepreneurs and publishers struggling to make money from the outdated ad and subscription model.

The Texas Tribune is all about entrepreneurship, innovation and creativity, but ad-and-subscription based model it is not.

“Since the beginning, we have had a three-pronged approach: news, data, and events,” the newspaper’s Chief Product Officer Rodney Gibbs told FPC Tours 2017 reporting team during a visit of their office in Austin — and this model has worked for them.

The 2009-startup, which was launched with $4 million in seed capital and a staff of 17 people, now boosts an employee headcount of 60 (half of them journalists) with $44 million in all-time (seven years) revenue. It attracts 1.5 million unique monthly visitors of whom 25% come from social media where it has a fan base of nearly 250,000 fans.

Only seven years into launch, The Texas Tribune has the largest team of reporters covering state legislature in Texas and is giving old and popular newspapers, the likes of Dallas Morning News and Houston Chronicle, a run for their money — the former was growing significantly when these established newspapers were cutting jobs in their Austin bureaus.

So how did it achieve all this success, was it quality journalism or display of excellent business skills? It was a combination of both with innovation and creativity at the core of their model.

We do more than 50 live events every year and this is our biggest source of revenue,” the CPO said.

These events are the major financial strength of The Texas Tribune. All these events are free with the exception of Tribune Festival, which is their biggest annual event. Last year, the newspaper earned $1.4 million in profit through ticket sales and sponsors from this single event over a weekend — about 4,000 people attended the paid event with tickets ranging between $150 and $300 and as many as 60 brands sponsored it.

However, the benefits of Tribune Fest are not limited to revenues.

“It has many benefits. It makes us a lot of money, secondly it often gives us news when some speaker, a legislator for example, says he is going to introduce som new bill that can affect people,” Gibbs said adding, “Very often our news content from that event is picked up by leading national news organizations like CNN.”

Tribune Fest has become quite a brand of its own, for it serves as a major platform to connect people with important personalities including state legislators, offering locals networking opportunity where they can interact with their elected representatives and ask questions. It invites keynote speakers, holds panel discussions and opens up question-answer sessions with audience, all of it anchored by a Tribunian, usually Evan Smith, the CEO himself.

“This is engagement with the community, brings people together who agree and disagree on political issues. We bring politicians and public together,” Gibbs said of their events all of which they live stream through their Youtube channel.

The newspaper never had a print version and was in profit in its third year. It describes itself as non-profit, non-partisan digital newspaper publishing up to 15 stories a day. To ensure transparency, they publish a full list of their donors, from individuals contributing as little as $20 to corporate donors with gifts running in millions.

“The CEO and one of the co-founders thought there was a need to cover state-wide politics and other important stories on health-care, education, immigration, energy and environment,” Gibbs told the touring journalists, explaining the need to fill the gap as major policy issues were not given due coverage.

Since day one, news has been one of the three major focus areas for The Texas Tribune. “If legislative session is going on, that’s the main focus, if not, we focus on issues like criminal justice, and health-care,” the CPO said.

The newspapers coverage of important news and some top-quality journalism complements the other two components of its core business model. It works on a combination of breaking news and investigative journalism. Their investigative cell — a dedicated team of three reporters and an editor — carries out in-depth reports every now and then on important topics, such as guns on campus.

“Our investigative work has won us awards and helped influence legislation,” Gibbs said.

The newspaper has some of the best reporters covering policy beats, but they didn’t restrict themselves to the traditional style of reporting. Their data service is, perhaps, the most innovative aspect of journalism they produce.

“We are heavy on data visualization,” Gibbs said as he took the visitors to a newsroom tour, pointing towards a dedicated space that accommodates a four-person team for data visualization. The Texas Tribune data app is the largest source for traffic on their website, accounting for 40% of the total visits.

They make interactive infographics to engage readers. For example, their data graphics on employees salaries throughout the State of Texas is a big hit. However, it is a bit of effort to obtain that data and visualize it for the ease general public.

“It is the data that is often buried in government documents or websites and is hard to understand. We visualize it and make it easy for our readers to understand,” Gibbs said adding they often use Freedom of Information Act to obtain this data. “We maintain a whole database on topics like education, schools, salaries of state employees and prisoners for example,” he said of their data project, which is very popular but often puts more pressure on their staff who have to update it very often.

The Texas Tribune offers a great case study for journalism students aspiring to be entrepreneurs and even for the publishers of traditional print newspapers, but it still heavily depends on gifts and sponsors, which account for two-thirds of its all-time revenue.

Gibbs, however, don’t see it as a weakness. “Our events have been the key to our earnings, but we try to keep all revenue buckets equal as opposed to depending on one,” he says — the revenue from Tribune Fest increased 17% in 2016 compared with that of the preceding year.

When asked how they sell it to the sponsors, the CPO said, “We don’t tell sponsors that their message will reach out to millions of people, we just tell them it will reach the right people.”        

                                                                                                                                       Image Credits: Deena Mostafa, Nemanja Milutinovic and Google.