Turn news industry disruptions to your advantage

The 2012 State of the News Media report by Pew Research Center’s Project for Excellence in Journalism is out, and it includes some eye-opening numbers on who’s making money from news these days.

Here’s a hint. It’s not newspaper companies. From the report:

In the last year a small number of technology giants began rapidly moving to consolidate their power by becoming makers of “everything” in our digital lives. Google, Amazon, Facebook, Apple and a few others are maneuvering to make the hardware people use, the operating systems that run those devices, the browsers on which people navigate, the e-mail services on which they communicate, the social networks on which they share and the web platforms on which they shop and play. And all of this will provide these companies with detailed personal data about each consumer.

Already in 2011, five technology companies [Google, Yahoo, Facebook, Microsoft and AOL] accounted for 68% of all online ad revenue, and that list does not include Amazon and Apple, which get most of their dollars from transactions, downloads and devices. By 2015, Facebook is expected to account for one out of every five digital display ads sold.

A year ago, we wrote here: “The news industry, late to adapt and culturally more tied to content creation than engineering, finds itself more a follower than leader shaping its business.” In 2012, that phenomenon has grown.

“Our analysis suggests that news is becoming a more important and pervasive part of people’s lives,” PEJ Director Tom Rosenstiel said in a press release. “But it remains unclear who will benefit economically from this growing appetite for news.”

Well, a first read of the Pew report suggests that it’s Google, Yahoo, Facebook, Microsoft and AOL who are benefitting economically from the public’s appetite for news online. :^) But let’s not forget that quite a bit of that 68% market share that Pew reports for these five businesses is passing through to uncounted numbers of affiliates and partners, too. For example, a large chunk of Google’s market-leading advertising income flows to its AdSense partners. (Full disclosure: I’m one of them.)

In my reading of the Pew report, I found an implicit concern that more and more online ad revenue was flowing to these tech company intermediaries, rather than directly to news companies as they presumably had done in the past. But I don’t have a problem with that. Why? I don’t believe in equating newspaper, broadcast and cable companies with the “news” industry.

I’ve never believed that newspaper companies are the originators of journalism. To me, the true originators of journalism are reporters and sources. Newspapers were yesterday’s middlemen, bringing together reporters, an audience, and the advertisers who were willing to pay to reach the audience that journalists’ reports would attract. Sure, newspaper companies played a vital role, but calling them the originators of content is akin to giving credit to an talent agent for an actor’s performance.

Today, tech companies have disrupted these arrangements. As a journalist, I can use Google’s Blogger to create my own publication and Google’s AdSense will pay me for the advertising revenue that my work attracts. And let’s not forget those downloads from Amazon and Apple, either, which provide an even more direct route for today’s writers to earn income from an audience. I don’t need a job with a newspaper a make living as a journalist now. Tech companies have become the new middlemen, through which sources and writers can reach an audience and customers, instead of having to rely on newspaper and broadcast companies to make that match, as they did so often in the past.

In this view, Pew’s report is not a depiction of a news industry losing control of its revenue future to the tech industry. It is instead a map of how tech companies are disrupting publishing monopolies, creating new avenues for journalists to travel in their careers.

Some of these new avenues are yet uncharted. Others won’t lead to any reasonable income. Others still will turn out to offer immense profit. All my work writing over the past few years on OJR about entrepreneurial journalism has been to help you find the best new avenue for you. But just because newspaper companies are getting squeezed doesn’t mean that you have to lose your future in the journalism business.

Unfortunately, you also can’t make the assumption that any profitable new avenue you find will be around permanently, either. Remember when Netscape dominated the browser market, when everyone was rushing to make deals with AltaVista, or when it seemed that Microsoft had a monopoly over computer software? It’s quite possible that 15 years from now, future writers will make the same types of cracks about Google’s advertising market share or the amount of time everyone spent on Facebook.

This is where you won’t find answers from Pew, or from me, or from any other pundit out there. You’ll find them only from yourself. This is why I stress the importance of living in the community you cover, or being a fan of the niche you cover. This is why you need to build and maintain relationships with your audience and with your customers. “Objective” separation is career suicide.

Because you need these relationships so that you can function fully as a consumer within the space you cover. That’s vital because it is as a consumer that you’ll get your first signs of any disruptions coming ahead. I remember people I had contact with in the music industry 10-plus years ago who’d spend their workdays developing market campaigns for CD sales, then go home and listen to music they’d download from the Internet to their MP3 players. They never allowed their experience as consumers to inform their work in the publishing industry, and many of them lost their jobs in the disruption that followed.

You’ve got to be an engaged consumer in your market, and you’ve got to apply that experience to your work as a journalist. Use it to anticipate disruptions, so that you can be ready to take advantage when they happen. Fifteen years ago journalists who were getting their news from websites instead of printed papers should have realized where their future was heading and moved before they were pushed. Today, writers who are reading eBooks ought to be making the jump to writing and publishing eBooks.

I don’t know yet where tomorrow’s disruption will come. But here’s a hint: Anywhere high barriers to entry – cost, equipment, etc. – are keeping people from producing and selling content, that’s an industry ready for disruption. Anywhere people are making money solely by controlling access to information is a place where people are going to be losing their jobs in the future.

Tech companies are taking money from old-school news companies, sure. But don’t look at that as a problem. Look at it is the opportunity it provides you.

About Robert Niles

Robert Niles is the former editor of OJR, and no longer associated with the site. You may find him now at http://www.sensibletalk.com.


  1. Right on! Great post. My mantra: If you can’t change the organization you’re in, go out and create one of your own.