Smartphones and Social Media Threaten News Industry

by Matt Klassen on June 17, 2015

Most people like the news; most people want access to the news; heck, most people use the news, but as news media firms around the world have discovered during the industry’s inevitable transition to digital, most people don’t want to pay for the news, and why would they, given that there are so many free options to access the same content.

According to the Reuters Institute for the Study of Journalism (RISJ), a marked spike in the use of smartphones as the primary platform for accessing news and the growing availability of information via social media pose a significant threat to the stability of news organizations worldwide, as users are increasingly connecting with relevant news content through searches and social media rather than “the front page of a news website,” the RISJ study found.

The simple fact is that while news agencies around the world do actually have a product that consumers want; it’s becoming increasingly difficult to monetize that product in a digital age where such information is available through an almost endless variety of channels. Further, given the unfettered mobile access consumers have to this information, there is also a growing frustration with advertising and so-called sponsored content, for while they serve as a vital revenue stream for the news industry, they also serve to annoy and alienate customers.

“Most people like news and use news, but they don’t want to pay for it, don’t want to see advertising around it, and don’t want to see it mixed up with sponsored content,” said RISJ Director of Research Rasmus Kleis Nielsen.

“This means sustainable business models remain elusive even for those who succeed in building an audience,” Nielsen said in a statement as the report was released.

While the vast majority of news agencies around the world have successfully digitized their product, the problem is now the various ways consumers have to access that product, and given that there exist free, instant-access options through social media, messaging apps, email and mobile notifications, it’s really no surprise that only the most loyal news subscribers still utilize news apps from the media outlets themselves.

Part of the problem, though, is how the news industry has gone about monetizing their product, as there is an ever-growing backlash against the annoyance of pop-up ads—to the point where they’ve become more of a deterrent instead of an attraction—and growing frustration and even betrayal over news content that turns out to be sponsored content—otherwise known as an “advertorial”—interesting stories that turn out to be nothing more than thinly veiled advertising.

“Blurring the line between advertising and editorial could harm the credibility of news brands, with little lasting impact on advertisers,” said Shaun Austin, director of media research for the internet-based market research firm YouGov.

While there’s no question that the preponderance of media channels threatens the financial viability of traditional news outlets around the world, for the most part there smartphone users still have significant “reservations about the accuracy and reliability of news found in this manner,” the RISJ report found, meaning that credibility stands as the last distinguishing factor for traditional news…now how to monetize that without further alienating the news consuming public?

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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