This is the second of a two-part series looking at the growing variety of journalism startups and the business models that are powering them. The first, which you can read here, examined several news startups employing nonprofit, hybrid and cooperative business models.
It’s early January and in a newsroom tucked away above Manhattan’s garment district a few blocks from Times Square, the staff of NowThis News comb the Web for their next big video hit. The 26 staffers responsible for news out of an operation of 28 start the day by pitching the news of the moment.
On this day the young, energized staff — comprised largely of Millennials — contemplates a report from the CDC that will ultimately become a two-minute video on women who binge drink. The Razzie nominations are forthcoming and Lance Armstrong will soon give his now-infamous confession to Oprah. A close eye is being kept on Venezuelan President Hugo Chavez’s deteriorating condition in a Cuban hospital. “We have our obit ready,” Editor-in-Chief Ed O’Keefe tells the room.
It’s a scene that has unfolded in any number of broadcast newsrooms, except that the stories told here are bound for a much smaller screen than the one in your living room. Less than a year old, NowThis News makes videos formatted for Android devices and for iOS, the operating system that powers every iPad and iPhone. They bill themselves as the first video news service targeted specifically to mobile devices.
NowThis videos often clock in at a single minute and rarely go longer than two. The intended audience: members of the Millennial generation who have a smartphone and a taste for social news in the palm of their hand. And social news means sharable news. When shooting or editing video, one of the first editorial questions for NowThis is always “Can it go viral?” News may be the product, but getting eyeballs — and lots of them — is the game.
NowThis News is one of many journalism startups promising even more creative disruption in an industry already upended by advances in digital technology. Today, that disruption is originating in the social space and on mobile devices and in small newsrooms like the one that belongs to NowThis.
What will become of NowThis News or similar ventures in the long run, no one can say. Their model is one of many attempts at finding a sustainable path for profit-based journalism outlets young and old. But among those efforts, NowThis News is aiming high.
Eric Hippeau, former CEO of the Huffington Post and currently a managing director of Lerer Ventures, the venture capital firm that founded NowThis News, wants it to be no less than “the brand that defines video news on mobile devices,” he says. Lerer was founded by Kenneth Lerer, himself a co-founder of the Huffington Post.
The videos that NowThis News produces don’t look or sound like your typical newscast. Videos can at times be snarky and in-your-face, comfortable with humor and feelings. It’s about “not having any distance from the emotion of a story,” says O’Keefe, former executive producer for ABC News Digital.
That is not to say that NowThis doesn’t give the news, regularly conveying important information in a few seconds of video. “We try to earn the right to be funny by being smart,” says social editor Drake Martinet.
As the startup has matured, so too have its videos, with an increasing emphasis on seriousness in reporting and a distinct separation of news categories, putting distance between the viral and the important. “We’re honing,” says Managing Editor Katharine Zaleski. “We’ve definitely changed our style a little bit. We’re much more focused on hard news.”
One video that stands out is a brisk profile of Chuck Hagel made during his nomination process. In less than two minutes, NowThis explains who Hagel is and where he comes from in a manner that is memorable and analytical: “He’s bipartisan, has military experience, he’s committed to vets and wants to modernize Pentagon bureaucracy,” the video says, going on to explain some of the controversies surrounding Hagel.
“I like it when we take complex subjects and we break them down into the simple,” O’Keefe says.
Without the resources of a large broadcast operation, O’Keefe envisions news that features the big details from major feeds but also sometimes goes where others do not. For President Obama’s second inauguration, the NowThis team that travelled to D.C. in late January went in search of stories off the beaten path, capturing the anti-Obama performance of rapper Lupe Fiasco. The video of the performance, complete with NowThis News’ logo, is still featured on the website of The Washington Post.
Video Journalists, or VJs, are also unafraid to express their opinions, particularly on issues that NowThis News editors think boil down to common sense. On gun control, NowThis featured a harshly skeptical take on assault weapons. The news startup has “an activist tone to it at times,” says Eason Jordan, general manager. He describes NowThis News as “post-partisan,” meaning it will take on “the cause of righteousness, not really a right or left stance.”
NowThis typically produces 20 to 25 videos a day, each one a new lesson under the belt of a site that posted its first video in September of last year. “This is very much a running launch,” says Jordan, a former head of newsgathering at CNN. The mobile app went live Nov. 2 and Jordan expects the startup to double in size in the coming months, with 34 newsroom staffers in New York and two more in Washington, D.C. at last count.
NowThis has a growing audience that in April contributed to nearly 20 million page views, traffic driven in large part by partnerships that include Mashable and The Atlantic.
“The content is working,” says Eric Hippeau.
Two minutes of video is generally only enough time to give the highlights and not the details. But NowThis News never talks down to its audience, says social editor Martinet, confident that their viewers will use Google or another search engine for anything they don’t understand.
The company started with an initial $5 million investment and recently raised an additional $4.8 million. Today, it generates four basic kinds of editorial content. The first is to simply post unedited video, or at least a clip, on the site and app. These videos range from the newsy to the viral, from politicians and pundits making self-explanatory announcements to a cheerleader making an incredible shot on a basketball court.
The second kind is video with some introduction but not the full editorial flair — a VJ introducing a video of a NASCAR pileup or a clip from Jimmy Kimmel’s late night talk show. Rather than lecture, VJs phrase their stories “as if they were trying to tell their friends about it,” O’Keefe says.
Other pieces get the full treatment, with voiceover narration and editing to tell the story of the day, from the merger of American Airlines and US Airways to the death of California gunman Christopher Dorner.
The fourth kind of content leverages the purely social aspect of NowThis News. Instead of video, these are tweets, Facebook posts and the like “purely for the social experience and nothing else,” says O’Keefe. Images of license plates were used in tweets on Election Day to mark if a state was won by Barack Obama or Mitt Romney.
Still in its infancy, the venture has only recently hired a senior vice president for business development and is looking to build a sales team. No ads have appeared yet but NowThis is talking to many would-be advertisers, according to managing editor Zaleski.
NowThis has so far been content to build its brand, secure in its financial backing. For now, it is more interested in building audience than selling ads. But it will have to start doing so eventually.
Advertising has been and in many ways remains the primary means for news organizations young and old to pay their bills. For NowThis News, that probably won’t mean advertising in the sense to which we have become accustomed — those little banners hocking products from the corner of the page. Nor is the advertising likely to take the form of pre-roll, the videos that play before selected content on sites like YouTube. “[Pre-roll] kind of breaks the experience,” says social editor Martinet.
Paid subscribership is unlikely, although NowThis may also syndicate its content for other news outlets to purchase.
More likely, advertising will appear in NowThis’s many social feeds along with video ads called native or sponsored content. Those videos will likely be made by outside groups to fit in with NowThis’s original content but still labeled as coming from a commercial advertiser. Think promoted tweets or cute cat photos posted on Buzzfeed as an example. O’Keefe envisioned a video whose themes match the movie that sponsored it, perhaps a list of history’s greatest manhunts to be sponsored by “Zero Dark Thirty.”
Sponsored content has proven controversial though. Some worry that audiences could confuse native advertising for original editorial content. The Atlantic experienced extensive backlash against a sponsored article about The Church of Scientology. Some Atlantic users thought it was an original piece praising Scientology and the content was quickly taken down.
“We now realize that as we explored new forms of digital advertising, we failed to update the policies that must govern the decisions we make along the way,” reads a statement from The Atlantic posted online. “We remain committed to and enthusiastic about innovation in digital advertising, but acknowledge — sheepishly — that we got ahead of ourselves.”
Still, NowThis News is confident that viewers will be able to tell the difference between sponsored and original content. “We believe our audience, our users, are smart. Really smart,” Martinet says. “As long as we’re above board, they’re smart enough to know what’s in front of them.”
Ad revenue as a business model is not as promising as it once was. The five largest online technology companies — including Google, Facebook and Yahoo! — garnered 68 percent of all digital advertising revenue in 2011, according to the Pew Research Center’s annual report on American Journalism for 2012. For news outlets, that dominance means they frequently make pennies on the dollar for advertising. Ads on mobile devices are even less profitable.
For NowThis News and many of its cohorts, the quest for profitability keeps them looking to supply journalism in the niche markets that arise with advances in technology. Right now, that means developing independent apps and content specifically for mobile devices. It also means maintaining a strong presence on social platforms like Facebook and Twitter. In the most recent news consumption survey from the Pew Research Center for the People and the Press, 20 percent of respondents identified social media as a regular news source.
Still, in many ways NowThis and similar outlets represent what could be a paradigm shift — and not just a fad — in how and where people get their video news. The Pew Center’s Excellence in Journalism report highlights a reality CBS, ABC and NBC have known for years — their viewership is declining, down 28.4 million people, or more than half, from 1980. Much of that decline owes to the rise of cable networks like CNN and Fox. But even cable news may soon find itself struggling, having lost revenue in 2009 and ratings in 2010.
The reasons for the decline in television news viewership vary. “We don’t think it’s because they hate video,” NowThis News social editor Martinet says. With an average age of 28, NowThis users are also significantly younger than the typical television viewer. The Pew news consumption survey showed that one out of every three individuals between 18 and 29 watched television news the day before. That’s compared to 52 percent of 30- to 49-year-olds and 65 percent of those between 50 and 64. NowThis News hopes to fill in those gaps in audience with an engaging product that lives not on the television but on the social feed and mobile app.
Some startups live more on mobile devices than they do in social outlets. Unlike NowThis News, the content of California-based Circa can be found only on mobile devices, and so far only on iPhones. Apps for Android devices and the iPad are expected sometime in the spring or early summer.
Launched in March 2012, Circa produces written news designed to be viewed on mobile devices. News bites are divided into points and kept to a few short sentences. “We depart from the traditional article model,” says CEO Matt Galligan.
The idea is that mobile users want original news that hasn’t been adapted from other mediums — news designed specifically for touchscreens and swiping fingers. The numbers pan out. According to the Pew consumption survey, 17 percent of respondents got their news from a mobile device. According to Galligan, the app fills a need in the lives of its users for “news on the go and in a clear and concise manner that makes it easy to consume.”
Like NowThis News, Circa has yet to monetize its product. Galligan hopes that will happen around the same time that the Android and iPad versions are available. Circa is toying with several options for revenue, including advertising that is better targeted to mobile users, as well as subscriptions and partnerships.
Not all profit-based startups have as much disruptive potential as NowThis News or Circa. Some feel they can carve out a sustainable niche through a paid subscription, such as the one being pursued by Symbolia. Based in Chicago, Symbolia is a tablet-centered news startup that tells originally reported stories using art alongside words in the format of a nonfiction comic book, sometimes called illustrated journalism. “Comics make it possible to show all forms of emotional minutiae,” says publisher Erin Polgreen.
Launched in December 2012, Symbolia’s style enables a different kind of literacy, featuring visual stories about the impact of immigration policy, third-party politics in the United States and rollerbladers in Northern Iraq. Modeled after similar illustrated journalism endeavors but the first to be digital-only, Symbolia comes out every other month but will eventually become a monthly magazine. “We’re definitely going for quality over quantity,” says Polgreen. The same is true for audience size, with 1,500 subscribers enough to support Polgreen and one other fulltime staffer. Most content comes from freelancers.
Symbolia will probably have ads eventually, but the product is one that audiences will be willing to pay for, Polgreen says. She sees her readers as a very different kind of small, niche audience, one comfortable with “helping write a paycheck for people that are innovating the news,” she says.
Few for-profit online news startups are looking at anything resembling a pay wall, whether the ironclad one on the Wall Street Journal’s website or the metered version of 10 free articles a month from The New York Times. “That seems to be a pretty much newspaper approach,” says Steve Buttry, digital editor for Digital First Media, a media management company in lower Manhattan.
Whatever their individual fates may be, NowThis News and other startups represent a new concept in journalism, one that’s dependent on an engaged social audience and powered by a staff that lives and breathes innovative storytelling geared to the latest technology and meant to be shared person-to-person, platform-to-platform. Whatever the model, in the mobile sphere, on social media and on the website, they will keep telling stories — and doing it in new ways.