Over the past four decades, the business model for all media has been completely disrupted by the internet as established patterns of media consumption have completely changed.
Online time is now equal to TV watching time at around 14 hours per week - and roughly half that time is spent on Facebook. Here in New Zealand, advertising revenue for digital/interactive will overtake that for television for the first time this year. It overtook newspapers about two years ago and radio a year before that.
The sad fact is that this revenue isn’t going to online news publishers.
Roughly half of the global revenue goes to Facebook and Google alone. News organisations have responded by trying to build innovative revenue models based around new kinds of advertising product suites, but reality seems to have a different view. While people support a strong news media that speak truth to power, it appears they don't want to devote large amounts of their time (or money) to viewing or reading news, preferring to use their online time to pursue their niche interests within a globalised community.
Our site, Scoop, has not escaped this disruption. Our advertising revenue peaked in 2007, after which it has steadily declined. After the 2014 election advertising sales fell off a cliff, hastened by one consequence of 'Dirty Politics' - the perception that news media in general and internet media in particular were implicated in something that made us all feel bad.
Scoop then went back to the drawing board. We knew that if we wanted to survive we would need to change radically and rapidly. So last year we launched 'Operation Chrysalis.' This was an effort to secure a sustainable platform for Scoop in the future and it has three legs:
• Truth - We wanted to break the complacency and silence around the state of NZ news media as a first step towards solving the problems facing us. We needed to identify and understand the nature of these problems, so we started a public conversation about the “State of the NZ News Media.” Our timing – just before the “Save Campbell Live” controversy – was fortuitous and the conversation is now bearing fruit in sparking a debate about its future and an increased level of reporting about the challenges facing the industry.
• Trust - The loss of trust in news media has created a vicious cycle of value destruction which needs to be addressed. 'Operation Chrysalis' introduced our plan to convert Scoop into a not-for-profit organisation. We hope to create a news organisation about which people feel a sense of ownership and in which they’re able to invest a high level of trust and faith. We‘re currently working on publicly releasing the legal structure of the New Scoop for public consultation.
• Sustainability - We concluded that the advertising revenue business models for news being developed elsewhere in the world simply aren’t applicable in NZ. This is where our ethical paywall came in. Its origins are in response to a 2011 UK Court of Appeal decision, NLA vs Meltwater. Meltwater is a global media monitoring company that scrapes the web, trawling for news that’s of interest to their clients and sending them reports.
It’s one thing to figure out a new method of making a news organisation sustainable and quite another to get people to agree to it. Asking people to pay for a publicly accessible website is problematic and our experience of introducing it has been both challenging and instructive.
What we've learned is that people are more willing to accept what we’re doing once they understand not only the context of why we’re instituting the model (and how it benefits them), but also the nature of their staff's usage of Scoop for professional purposes.
Here's our argument: As collectors and curators of news content, our approach is principled and reflective. While most media select and filter the news, our approach has always been to publish it all. We estimate that at least half of the content that we publish never makes it into the mainstream media. We're committed to providing public access to our fully-faceted search engine because in doing so we're strengthening our democracy and creating the value which will sustain us.
Scoop has about a million pages in our database, all indexed by Google and freely accessible to the public. We furnish a full-text search engine which allows users to drill into the content by source, tags, and date ranges. Consequently, we're the deepest and richest source of actionable intelligence in the NZ information ecosystem.
The press releases which form most of our content are a crucial form of communication. It's immediately clear who they are from and almost certain that the person quoted will stand by what they are saying. They are usually produced by a team, often including the CEO, and are therefore expensive to produce. Anything stated in a press release has not only been signed off by the people quoted in it, but also by a range of other stakeholders involved in the announcement.
Press releases are certainly a subjective view from the perspective of a particular organisation or person, but they can be relied upon as an accurate and nuanced expression of that viewpoint. In contrast, when you read something in a news article written by a journalist there’s a transformation process involved. Facts and assertions are interpreted, supplemented, checked, and sometimes critiqued. This is also useful, but in a different way.
Our professional users consistently tell us that what they most value about Scoop is that they’re able to read all the information from the source and draw their own conclusions about what’s important and what it means. Scoop provides a voice to all comers across the political spectrum to debate a variety of issues and allows the community to respond in real time. Media commentator Russell Brown has described us as "the home of the national argument."
When people send material to Scoop they reach a highly influential audience. When we publish an item it’s instantaneously indexed by Google, which ensures that their version of what’s happening can be found alongside the interpreted views relayed via the mainstream media.
As a result, Scoop acts as a magnet to content from people who are seeking to be heard - and publication by Scoop often provides the most high profile outlet for their material. Our product is more valuable to the professionals who routinely use it precisely because it’s free: if Scoop charged for publication, we wouldn’t have a comprehensive set of all the day’s press releases; and if we charged for access to our website, we would reduce the visibility of the releases.
For many of those who have accepted our invitation to become licence-holders, ethical and legal questions have often been secondary to the question of utility. This makes perfect sense, since Copyright Law has always been about utility. In order to encourage the publication of useful and enlightening books and music there needs to be protection of the creative rights of those who create the work.
Scoop adds value to the content that it collects, curates, and makes available to everybody as a public resource. Some derive non-business benefits from that activity, whilst others obtain direct business benefits. We enable them to do their jobs more efficiently and productively, knowing that they are as well-informed about the deep background as everybody else.
When professional usage of Scoop is fully understood, our clients accept that Scoop's approach to news is useful to them. Above all else, we furnish an invaluable set of news content - and the fact that we’ve done so consistently for so long is the reason why we have such a large and loyal audience.
The depth, richness, and diversity of our database provides a yardstick for purchasers of Scoop licences to compare what we provide with other commercial products. When our consumers and contributors make this connection, we’re convinced that we will come on out on top.
Alastair Thompson is the Publisher and editor of Scoop.co.nz