News Media Seek Direct Relationships with Readers

Following the April shutdown of BuzzFeed News, the iconic media outlet of the 2010s, Vice Media filed for bankruptcy protection in June. Both of these media companies had been publishing free articles on social media with fresh perspectives that challenged the conventional journalistic norms, giving them the large-scale exposure and traffic needed to grow. However, according to content industry specialists, their downfall was caused by dwindling ad revenue due to social media algorithms. It is now clear that media companies need to find ways to make money on their own—or face the prospect of not existing at all.
 
The New York Times, recognizing BuzzFeed as its competitor in its 2014 Innovation Report, has been inspired to develop a more robust revenue model. To do this, they restructured their organization and practices to focus on digital content, improving monetization prospects by transitioning away from reliance on social media platforms to direct content distribution to readers.
 
As the Internet and its platforms continue to evolve, so does the environment for publishing and consuming information. As a result, media organizations face inevitable concerns about their identity and revenue structure. It is now more crucial than ever to forge a path toward a sustainable and thriving media ecosystem.
 
 
PART 1. The Media Landscape of the Open and Monopolistic Web 2.0 Era

The disconnection between journalists and readers
In the era of printed newspapers, journalists would write stories, attract readers, and advertisers would place their ads within the paper, which served as the primary source of revenue for journalists. But then came the Web 2.0 era and digital advancements, and suddenly mobile devices took over, pushing aside print newspapers. Social media platforms jumped in and became the go-to for attracting readers and earning ad revenue, with journalists now just one of many Content Providers (CP) in the mix. 1) 2) 3)

According to a 2018 study conducted by Pew Research, social media has surpassed newspapers as the primary news source for American adults. Similar surveys have been conducted in South Korea, as well. The Korea Press Foundation's Social Media User Survey in 2021 revealed that eight out of ten people consume news through social media. While media organizations have their own websites, they face challenges in directly engaging with readers as most people obtain their news from portal sites, search engines, or social media. Consequently, the open and sharing nature of Web 2.0 has resulted in a trade-off: easy access to news through social media, but limited direct communication between journalists and readers, with social media acting as an intermediary.

For instance, BuzzFeed, known for offering free news through social media, was valued at a staggering $1.6 billion—but has seen its value plummet to less than $100 million. As a result, the company ceased its news service in April 2023. 4)
 
To tackle this issue, the idea of direct communication between journalists and readers has emerged as a solution. It involves finding a distribution method that allows journalists to have more control over their content and deliver news directly to readers, focusing on meaningful content rather than just entertainment. The new approach is to develop a business model that enables journalists to connect with readers online, without intermediaries, fostering a mutually beneficial relationship.
 
 
Building direct connections with readers
Meredith Kopit Levien, CEO of The New York Times, a company well-positioned for digital transformation, has stated:
"I would agree with you that every content business I know is subject to an ecosystem they don't control. Making direct relationships to be able to do other things from your destinations that drive your business is the game."
 
In other words, media companies are striving to enhance profitability by focusing on direct relationships with their readers. They achieve this by identifying and analyzing their target audiences, enabling them to create compelling content that truly resonates with them to drive subscriptions. Notably, the New York Times has achieved remarkable success in its digital transformation, with digital subscription revenue now surpassing that of print subscriptions.
 
Transitioning to a subscription model requires a keen understanding of the audience's preferences to create content that they will love. Nowadays, there are a growing number of "news media" companies that cater to the tastes of millennials. These companies recognize the preference for video, image-rich content, concise text, and a casual tone, all in contrast to traditional written formats. By aligning their content with the preferences of their audience, they tap into the trend of understanding and reflecting the needs of their readers.
 
 
PART 2. Customization, Personalization, and the Growth of News Media in the Web 3.0 Era

As emails decline, newsletters are on the rise
"Email will be the cockroach of the Internet." These were the words of Stewart Butterfield, co-founder of Slack, at the 2015 Internet Conference in Dublin, Ireland. It seemed that the significance of emailed newsletters had dwindled to the point where they were even playfully referred to as online flyers.
 

▲(Image) The New York Times has a total of 83 newsletters as of June 2023.

But the newsletter is making a comeback. "Email is the best way to connect with readers, and it's nearly the only channel that can direct them to a journalist's website," says Jay Lauf, publisher of the global media company Quartz, viewing email newsletters as a bridge connecting journalists with their readers.
 
Several news organizations and media startups are jumping on the newsletter trend to better connect with their readers. In South Korea, both established media outlets like Chosun Ilbo, JoongAng Ilbo, The Korea Economic Daily, Maeil Business, and The Korea Times, and media startups like Newneek and Careet are actively publishing newsletters. They aim to deliver customized news to their readers and gather their opinions for direct communication. This trend isn't limited to Korea alone. Overseas media giants like The New York Times, The Washington Post, Bloomberg, The Guardian, and more also offer newsletters. With a digital transformation led by Mark Thompson since 2012, The New York Times has exceeded 10 million digital subscribers (with 800,000 print readers) by 2022, with an aim of targeting 15 million readers by 2027. Not to be left behind, media startups like Morning Brew and theSKIMM have entered the scene, focusing on building subscription models with newsletters at the core.
 

The benefits of newsletters
01 They enable direct connections with readers
In an era dominated by portal sites and social media as primary channels for digital news distribution, embracing newsletters provides a way to regain control over your content. Not only does it offer the opportunity to gather valuable data on reader preferences, but it also enables media organizations to tailor future content based on these insights, which helps build a loyal readership. In this way, the newsletter acts as a direct link between the media organization and its audience, nurturing a stronger connection.
 
02 They help with the transition from ad revenue to subscription revenue
Media organizations have come to the realization that relying solely on advertising is no longer sufficient, prompting them to explore alternative revenue sources. Newsletters have emerged as part of the recent shift towards a subscription-based model, rather than relying solely on advertising. Alongside regular newsletters, the concept of "premium newsletters" has gained traction, catering specifically to paid subscribers and offering a dependable source of digital revenue. This shift has made in-depth content more available to readers, while fostering a culture where readers are willing to pay for the content they value.
 
03 They have a "news curation" effect
Newsletters are incredibly valuable because they allow you to focus on a particular topic and deliver in-depth content that caters specifically to your target audience's interests. While creating a newsletter may require some extra effort, the benefits are clear: you can attract new readers with tailored topics and deepen relationships with existing ones. From the reader's point of view, they have the freedom to curate topics that interest them and receive regular updates on those subjects.
 
This way, newsletters create a direct connection with readers by delivering specific and focused news content. They help media organizations boost their revenue by shifting from ads to subscriptions. Additionally, the ability to connect with subscribers through email and explore other business models expands their reach, making newsletters an essential tool for media companies.


What if media companies could build their own platforms?
Imagine if news companies could have their own platforms—a space for journalists and readers to connect directly, free from the constraints of a specific portal or search engine.
 
With their own platform, media companies have the opportunity to establish their brand and showcase news within their chosen category. It enables them to publish the news content that resonates with their target readers, fostering a shared digital space to can interact and receive direct feedback through emoticons and comments. By owning the data generated on their platform, they gain valuable insights into their readers' demographics, preferences, and how they discover the content. This not only deepens their understanding of their audience but also empowers them to incorporate their opinions into their content planning, ensuring they can create the content they desire and need. Ultimately, this approach helps foster reader loyalty and strengthens their connection with them.
 
Once they have their own platform, they can venture into different monetization ventures within the same space. This can involve sponsorships to support the platform, providing both paid and free access to content, incorporating commerce using news branding, offering subscriptions and memberships with added perks, and more. These diverse revenue streams make media companies more self-reliant and sustainable in the long term.