Former Dow Jones chief executive Will Lewis has set out what he believes are the must-haves for news business models going forward, saying no one will put capital into the industry as it stands “unless they’re slightly bonkers”.
Lewis described advertising-based models as “gone”, warned against subscription fatigue although he said these will remain an important revenue stream, and said charity donations were interesting but that “the begging bowl doesn’t seem a long term plan”.
Although he said there was no silver bullet, Lewis said the industry needs to move from fixed to low variable cost bases and “go back to basics and put the reader, the viewers and the listeners’ needs at the heart of the model and build from there”.
Speaking at the FT’s Future of News online conference on Wednesday, Lewis (pictured) warned: “We seem to be the one industry left where it seems acceptable to serve up the content in the same way to the same people regardless of what people actually want.”
Lewis, who left Dow Jones and his role as publisher of the Wall Street Journal earlier this year after six years, went on: “I do still think there is a producer interest mentality in the industry which is how do we justify what we have here and make it work for a bit longer and that’s why it’s been such a difficult period of time.
“Any new model, and it is going to require a new model or new models to attract new capital because no one’s going to put new capital into the industry with the existing models unless they’re slightly bonkers… at its heart has to have a consistent flow of high-quality impactful journalism that tells you really what’s going on in business, politics, culture and doesn’t just regurgitate Government and company press releases. That’s number one.
“That’s hard, it takes resource, but that is absolutely critical.”
Lewis added that despite the recent shift to subscription and reader revenues, continued strong growth in that area should not be presumed as many people cannot or will not pay $40 a month for a product in which they are only interested in a small part.
The former Daily Telegraph editor said: “You’re going to have to dis-aggregate the products,” he said.
“In a world where I have to take out a subscription to get a razor to shave I suspect subscription fatigue is going to set in and you will not be able to pin all your hopes on that,” Lewis added.
Kristin Skogen Lund, chief executive of Scandinavian media group Schibsted, agreed: “I do agree that we need to become much better in how we bundle, how we personalise and how we enable readers to pay for just what they want to pay for.
“I really think you’re onto something there and we need to find smart and friction-less models to cater to that.”
Lewis also said that although direct relationships with readers are ideal, publishers have to be willing to reach them whatever platforms they are on with whatever type of content they want.
He said: “If you think that doubling down on project development and engagement is the right route I would question that because for all of the hours you will spend agonising over what goes where on your homepage and a few bells and whistles on your app, in my mind these are largely wasted in terms of a growth strategy.
“It may prop up and make your 65-year-old subscriber less likely to cancel but all the while that you are committing resource and focus to a homepage makeover you’re allowing state publishers, commercially corrupted bloggers, amateur journalists to steal a march on you reaching a bigger younger audience which is hanging out on social media.
“So if your editor declares 2021 is the year of the homepage makeover, get yourself a new editor I would say.”
Financial Times chief executive John Ridding confessed his title is preparing for a homepage makeover but said he is feeling more optimistic.
“I think that reader revenue models and engagement models done right can and will work. I’m a believer that quality journalism can be a quality and indeed a growth business.
“I think quite often there’s a dichotomy drawn between advertising and reader revenue and subscription models…the starting point has to be the reader, it has to be reader engagement.”
In 2018, the latest available figures, the FT increased its revenue by more than £2m to £323.6m in the UK and put the growth down to success in digital subscriptions.
Ridding said the current news cycle and increased trust in the media means people are willing to engage and subscribe, giving an understanding of readers that wasn’t available a decade ago, which is a “powerful advertising proposition”.
In addition the FT’s September figures showed print and digital advertising “neck and neck… which would have been unthinkable a couple of years ago,” Ridding said.
“There are these opportunities for growth which do connect,” he added.
“There’s a lot of execution to get right, it’s tough because there’s a lot of technology to bring to bear, but I just think the fundamental importance of news, the fact people have clocked that plus the fact we have now have the mindset and technology to engage with readers that we didn’t have before does present a path to growth.”
Picture: Dow Jones