Australian Financial Review editor-in-chief MICHAEL STUTCHBURY evaluates the role of fake news in the increasing success of subscription models in the UK and Australia and why readers are becoming more open to paying for quality news products.
Fake news can make old media great again. Amid the growing crisis of trust, it can at least help provide a viable business model for credible, newsroom-based journalism that some fear is dying.
Surprisingly strong gains in paid subscriptions for traditional news mastheads – including The New York Times, The Wall Street Journal, The Economist and The Financial Times – suggest that digital disruption of the media marketplace has entered a new less-dire phase for journalism. Rewind to peak disruption of half a decade or so ago, when conventional wisdom insisted there was “no such thing as brand”. Information demanded to be free. No one would pay for commoditised news that could be easily copied. So it could not pay for the newsrooms that reported it. Even homepages would die, perhaps even before the printing presses, as readers searched for news and information in the ether rather than rely on favoured “destination” news sites.
Yet I’ve just returned from London, getting inside the Financial Times newsroom and business model, which has driven print and digital paid audience from 740,000 in 2015 to nearly 930,000 today. The digital growth is consistent with The Australian Financial Review‘s experience of a 40 per cent increase in digital retail subscriptions over the same period. For the FT, two-thirds of revenue now comes from content, as opposed to advertising, says chief executive John Ridding. Digital subscribers make up 80 per cent of the FT‘s paid audience. Yet the decline in print circulation has slowed and the pink FT newspaper remains in the black.
When I last visited the FT, in October 2016, editor Lionel Barber and the newsroom were in a state of shock over the Brexit vote, which they didn’t pick. But Brexit and the even bigger populist shock of Donald Trump’s presidential win a month later have since generated a surge in paid subscriptions. Brexit and Trump are simply massive stories for an FT-style readership. And, as Ridding says, they also have accelerated the rush to trust amid a “corrupted and mistrusted media ecosystem”.
Social media has polarised the political and media spectrum as self-centred readers seek to validate their own world views. But Ridding says that shortchanges decision-making readers – such as business readers – who need impartial and credible information on which to base their decisions. Many traditional mastheads responded to digital disruption by trying to quickly build scale on the back of the big social media platforms on which to run an advertising-based business model, Ridding says. Instead, they found that the big platforms fragmented and sucked away the advertising dollars. So the FT’s model is based on the quality and integrity of its journalism as it seeks to recreate the traditional habit of print readers by deeply engaging its readers in the digital world. “We have to remain true to mission,” says Ridding.
The editorial newsroom itself is helping drive this business model, such as how to better engage female readers or to build a deals-based franchise such as the Financial Review‘s Street Talk. But it also includes big news scoops that boost audience and subscriptions – such as the FT‘s expose of the sexist and predatory London Presidents Club early this year.
At the same time, the scandal of fake news in the US presidential election, and now Facebook’s role in it, is returning a trust premium to journalism. This shows up in the widely cited Edelman Trust Barometer. Amid collapsing trust in institutions, Edelman reports that Australians’ trust in traditional and online-only media journalism has increased from last year’s 41 index points to 52 this year. At the same time, trust in search engines and social media platforms as a source of news and information has fallen from 43 to 38.
Readers are becoming more willing to pay for credible news, just as they pay for Netflix, Spotify and other news and information services. And, rather than being trapped in a world of promiscuous search, publishers such as the Financial Times continue to be encouraged by the popularity of digital newsletters. These “linear” curated newsletters – such as the Financial Review‘s Before the Bell and Market Wrap 5pm – help busy readers find the most important news of the day. They’re like a more timely cut-down version of the daily newspaper.
This article first appeared in the Australian Financial Review and has been republished with permission of Fairfax Media.