How might European news agencies survive in the face of risks ranging from fake news to decreasing advertising revenue? Technology plays a role in the potential opportunities of the current media landscape, but news agencies can also innovate through their business models.
As part of a larger study of the future of news agencies in Europe, researcher Atte Jääskeläinen has been looking into ways that news agencies might yet survive and even thrive in the current media landscape. Here are some of his findings in more detail:
Finding #1: News agencies can create their own platforms to distribute content
One of the greatest reported challenges facing news agencies is a significant shift in how news is sold in the marketplace, especially as content has become free. Jääskeläinen’s research shows that the most successful news agencies are those that responded to this change by adapting their business models. Sweden's TT, Austria's APA and the UK's PA were selected as case studies for the project because they have particularly successful models: All three are media-owned, and, as Jääskeläinen explains, had leadership “visionary enough to be able to organise a mandate with the owners” to explore new business leads when this became necessary:
“Some of the most successful [news agencies] are using a so-called ‘platform model’ used by the likes of Facebook and Google. It was only really talked about for the first time by academics in the early 2000s. What this meant was that the news agencies started not only selling news to news media but they took news media content and sold it to corporate clients, acting as a platform in that exchange.”
News agencies can no longer rely on only providing their output to their traditional news media clients. Instead, Jääskeläinen and his research team found that these successful news agencies had diversified their customer base, with “the media content… gathered on a news agency platform and sold to corporate and PR customers.”
The “platform model” works by establishing a technical platform that acts, in Jääskeläinen’s words, as “a marketplace for interactions between different sides of the platform, with the news agency setting the rules and pricing.”
Finding #2: The newswire should remain a core offering, even if it has to be subsidised
A platform model does raise the question: Why should agencies still run a general news service if it’s no longer profitable? Jääskeläinen explains: “One element of the platform model is that you have to subsidize the platform to be able to bring in customers and create the network effect. In the same way as with traditional operations of producing news, it’s a requirement for the successful running of the platform to create a strong brand with a high level of trust.”
In other words, agencies like TT, PA and APA are profitable because they’ve diversified their businesses by building on the strengths of their traditional operations: the newswire as a core offering, and the editorial and brand equity built up by a news service over time.
Finding #3: Technology can help news agencies work smarter instead of harder
Jääskeläinen noted that technology was a key factor contributing to, or detracting from, the success of a news agency. Perhaps as expected, those who explored the possibilities of technology were faring better than those who stuck to the traditional ways of doing things:
“Successful agencies have a very high technological capability. The technology is not something that, by traditional learnings, you should outsource if it is a strategic resource of competitive advantage. Those agencies that are positive about the future, they see that news agencies have a special role in developing their operations into something which could be called ‘super efficiency’: doing something for most of the news media in an effective way and using news tech like AI, robo journalism [and] distribution platforms to make it as easy as possible for news media to publish content without touching them at all.”
Agencies that are the most successful, then, are those driving innovation. We’ve seen this ourselves wtih news agency customers like AAP and NTB who not only use Superdesk as a CMS but also take advantage of its workflow capabilities to automate tasks and streamline the operation of their newsrooms.
By using technology to help their news media clients cut costs and improve their offerings, news agencies can benefit the whole news ecosystem. What Jääskeläinen’s research has shown is that this also includes the news agencies themselves, with the most successful following this model.
Want to know more about the competitive advantages of technology for news agencies? Take a look at Superdesk, our open-source CMS developed in partnership with the Australian Associated Press.