Papers by Merja Myllylahti
Digital Journalism, 2021
This exploratory article maps the development of the reader revenue market, and its aim is twofol... more This exploratory article maps the development of the reader revenue market, and its aim is twofold: first, to examine how the digital reader revenue market was structured in 2010–2020; second, to investigate how the market was configured during 2020–2021. The article argues that in the past decade, large news publishers were rewarded for the attention they received from their readers in form of digital subscriptions. Their ability to monetize their audience attention gave them a dominant position in the reader revenue marketplace. In 2020–21, Google’s and Facebook’s payments to news publishers started to further strengthen dominant companies as they were reaping the monetary benefits of them. Platform payments raise a concern because news publishers revenue models may become even more ingrained in the platform ecosystem. Additionally, local news outlets are largely excluded from the large platform payments, potentially weakening their financial position in the reader revenue marketplace. However, platform payments are temporary in their nature, and long-term impacts on the market structure are hard to predict. The analysis here is based on data retrieved from three platform companies and 14 newspaper groups operating in 9 Western markets.
Trust in News in New Zealand , 2021
In 2021, fewer than half of New Zealanders trusted news in general
General trust in news declined... more In 2021, fewer than half of New Zealanders trusted news in general
General trust in news declined from 53% to 48%, and trust in the news people themselves consumed fell from 62% to 55%
Trust in news found via social media and social engines also declined, with 26% of people trusting news they found via search engines, and 14% trusting news on social media
All news brands in New Zealand experienced erosion of trust, with statistically significant declines occurring for Newshub and Newstalk ZB
As in 2020, RNZ (6.8 out of 10) and TVNZ (6.6 out of 10) were the most trusted news brands, and Newshub remained the third most trusted (6.3 out of 10) news brand.
JMAD New Zealand Media Ownership Report, 2020
The10th JMAD New Zealand media ownership report finds that in 2020, the country’s media landscape... more The10th JMAD New Zealand media ownership report finds that in 2020, the country’s media landscape changed dramatically. Stuff became an independently owned media outlet, Bauer Media was sold to a private equity firm, and MediaWorks’s television arm was acquired by Discovery. As a consequence, New Zealand had more independently and privately held media companies than at any time in the past decade.
During 2020, the Covid-19 pandemic had a major impact on New Zealand media outlets. The majority of news websites reported a strong increase in their audience numbers, but at the same time their advertising revenue declined sharply. News companies’ finances were boosted by the Government’s $50 million crisis package and wage subsidy, but some of them also gained reader revenue enabling outlets such as BusinessDesk, The Spinoff and Newsroom to expand. However, the overall picture was not as rosy. During 2020, approximately 637 jobs disappeared from the New Zealand media industry.
In 2020, it emerged that Google was more involved in the New Zealand media sphere than was previously the case. During the pandemic, the search-engine company provided financial support to 76 news organisations across the Pacific, including non-profit news outlet Crux in Queenstown. Over the years, it has trained hundreds New Zealand of journalists in technical skills.
Digital Journalism , 2019
Digital journalism has become entwined with the platform ecosystem as news companies distribute t... more Digital journalism has become entwined with the platform ecosystem as news companies distribute their news through platforms to gain audience attention and reader revenue. To understand where, how, and by whom individual user interaction is collected, measured and monetised, the concept of attention is critical. However, attention is a scarce and fluid commodity. It shifts between platforms and news sites, and is affected by new technologies and algorithmic changes. All this makes extracting monetary value from platform attention challenging. This article explores attention as a core concept to study digital journalism revenue models which are dependent on harvesting user attention on platforms. Three aspects of attention are considered as a part of the conceptual framing offered: attention as a scarce and fluid commodity; attention as a unit for measurement; attention as a source of monetisation. This framework is especially useful for understanding evolving attention patterns for news; news content monetisation opportunities, shifts in power balances between platforms and news companies, and associated risks with platform news distribution.
JMAD New Zealand media ownership , 2018
The JMAD New Zealand media ownership report observes a considerable shift in New Zealand media ow... more The JMAD New Zealand media ownership report observes a considerable shift in New Zealand media ownership. In 2018, Australian Nine Entertainment took over Stuff’s parent company Fairfax Media. The report notes that the impact of this merger on the future ownership of Stuff and its New Zealand media holdings remain unknown. In 2018, New Zealand’s print newspaper market had already shrunk considerably after Stuff closed more than 35% of its print newspapers and announced additional cuts in community papers.
During 2018, the New Zealand media market remained at least partly competitive. In September, the Court of Appeal rejected the NZME-Stuff merger, and the two companies continued their duopoly and dominance in print and online news.
In November, MediaWorks announced that it had signed a conditional merger agreement with Australian outdoor advertising company QMS. If the deal goes through, QMS will have a substantial shareholding in MediaWorks. However, its current owner Oaktree Capital Management will maintain the majority shareholding in the merged entity.
New Zealand media outlets have argued that companies such as Google and Facebook harm their busin... more New Zealand media outlets have argued that companies such as Google and Facebook harm their businesses and their ability to sustain their newsrooms. They believe that Google and Facebook have become too dominant in the New Zealand digital media market, and this is hindering the quality and diversity of their journalism. But just how big an effect are these platform companies having on news media in New Zealand? New research from Merja Myllylahti provides important data on the relationship between web platforms and New Zealand news organisations. Her report gives an overview of Google and Facebook’s position in the New Zealand media market, media companies’ website traffic patterns, and an assessment of media companies’ dependency on traffic from search engines and social media. She also analyses some of the debates and responses to the issue of “platform power” in other countries, to help inform our debates on this issue in Aotearoa New Zealand.
Journal of Media Business Studies, 2018
Earlier studies and reports suggest that news companies have handed power over their traffic and ... more Earlier studies and reports suggest that news companies have handed power over their traffic and news distribution to Facebook, and this is harming their business. This article, based on data analysis of four media companies, evaluates to what extent this is true. The article finds that 24% of news companies total traffic came from social media with 67% of traffic coming either directly or from search to their sites. The article suggests that abandoning Facebook would cost news companies traffic, but not much revenue. For the companies studied, revenue from social media traffic made 0.03%–0.14% of their total revenue, and from social shares 0.009%–0.2% of total revenue. The article argues that because news companies rely on Facebook for the audience, they continue to be trapped in the attention economy.
The JMAD New Zealand media ownership report 2017 reveals a considerable shift in the pattern of N... more The JMAD New Zealand media ownership report 2017 reveals a considerable shift in the pattern of New Zealand media ownership. For the first time in seven years, the number of privately/independently owned media outlets exceeded the number of publicly (shareholder) and Crown owned companies.
In 2017, there were seven privately owned media companies: BusinessDesk, NBR, The Spinoff, Allied Press, Newsroom, Bauer Media and MediaWorks - five of these were locally owned. Additionally, Scoop was owned by a New Zealand based non-profit charitable trust.
The media market maintained some competition as the Commerce Commission ruled against NZME & Fairfax and Sky TV & Vodafone mergers. However, at the time of writing it was not clear how the competitive landscape will evolve. In October, NZME & Fairfax took their fight to the High Court, and that decision was pending when the report was published. In June, Sky TV and Vodafone decided to abandon their merger.
The report notes that the digital news market expanded during 2017. There was more available digital news and current affairs content for the public. Yet, at the same time the print newspaper market shrunk with regional and local newspapers reducing staff and publication dates. Commercial television broadcasting showed signs of distress.
New Zealand media ownership: key trends and events
• More privately-owned media outlets than in any previous year
• Sky TV and Vodafone merger denied and abandoned
• NZME-Fairfax merger appeal at the High Court
• Newsroom enters the digital news market
• Financial difficulties for commercial TV broadcasters
This qualitative research article explores New Zealand media convergence in an increasingly digit... more This qualitative research article explores New Zealand media convergence in an increasingly digital media environment. It considers media ownership convergence in the context of the Commerce Commission's merger rulings in 2017. However, the focus of the research is on other kind of convergences. There is a lack in New Zealand academia of research in this field, and this article aims to help fill the gap. The research maps evolving convergences within New Zealand media sector by utilising Rick Gordon's (2003) concepts of convergences as its analytical framework. It utilises document analysis method, and the primary data is collected from academic reports, corporate and government documents and news articles. The article finds that beyond ownership convergence, tactical and structural convergences are rapidly expanding in New Zealand media sector, and these arrangements may well expand as the Commerce Commission has denied major mergers. Content-sharing between media organisations has become more common because of the increasing importance of audience size and website traffic.
The JMAD New Zealand media ownership report observes that New Zealand media institutions are faci... more The JMAD New Zealand media ownership report observes that New Zealand media institutions are facing major changes in ownership, management and structures, but it is not clear what combinations will eventually emerge.
For the first time in six years, New Zealand media companies are exclusively owned by financial institutions. Media moguls and News Corp have sold all their shares in New Zealand media companies. The report also finds that the board structures of New Zealand media corporates favour further consolidation. This is not surprising, as many board directors have other directorships in financial institutions and corporate advisory businesses.
In November, the Commerce Commission declined its preliminary merger approval of NZME & Fairfax. Unexpectedly, the commission stated in strong terms that the merger would give the combined company too much editorial and commercial power in print and digital platforms. It concluded that the merger failed the public benefit test, and would not be beneficial for democracy.
However, the Commerce Commission makes its final decision about the NZME and Fairfax merger on March 2017. It is still possible that the merger will go ahead.
In October, the commission delayed its decision about Sky TV & Vodafone NZ merger as it sought answers to “unresolved issues.” The commission raised concerns about the merged company’s market power in premium content such as live sports, as well as the likely impact on consumer prices. The Commerce Commission decision about the merger is expected on December 21.
Both media merger proposals were not well received by the public and competing corporations. The Commerce Commission received 56 submissions about the NZME and Fairfax merger of which only three were supportive of it. The commission received 16 submissions about the Sky TV & Vodafone NZ merger, and they were all against.
Digital Journalism, 2013
ABSTRACT
Http Dx Doi Org 10 1080 14616700902812959, Sep 7, 2009
Using in-depth interviews, newsroom observation, and internal documents, this case-study presents... more Using in-depth interviews, newsroom observation, and internal documents, this case-study presents and analyses changes that have taken place at Finnish financial daily Taloussanomat since it stopped printing on 28 December 2007 to focus exclusively on digital delivery via the web, email, and mobile. It reveals the savings that can be achieved when a newspaper no longer prints and distributes a physical product; but also the revenue lost from subscriptions and print advertising. The consequences of a newspaper's decision to go online-only are examined as they relate to its business model, website traffic, and editorial practice. The findings: illustrate the extent to which the medium rather than the content it carries determines news consumption patterns, show the differing attention a newspaper and its online substitute command, and reveal the changes to working patterns journalists can expect in the online-only environment.
Pacific Journalism Review
Upcoming in 2016 The Routledge Companion to Digital Journalism Studies
Digital Journalism, Jul 22, 2013
The paper addresses the contemporary issue of newspaper paywalls. The paper aims to analyse diffe... more The paper addresses the contemporary issue of newspaper paywalls. The paper aims to analyse different paywall models and how they impact on media corporations’ revenues in the United States, the United Kingdom, Slovakia, Slovenia and Poland (Piano Media), Australia, New Zealand and Finland. The paper finds that newspaper paywalls provide roughly 10 per cent of media companies’ publishing/circulation revenues. The paper also finds that paywalls are softening and prices in some cases are decreasing as news corporations fight for new digital subscribers and revenues. The argument here is that the revenue generated by paid online news content is not substantial enough to make paywalls a viable business model in the short term. Media corporations do not disclose information about their digital subscription revenues and this lack of transparency might impact on research findings.
The New Zealand Ownership Report 2014 is the fourth published by AUT’s Centre for Journalism, Med... more The New Zealand Ownership Report 2014 is the fourth published by AUT’s Centre for Journalism, Media and Democracy (JMAD).
The report finds that the New Zealand media market has failed to produce new, innovative media outlets, and that all the efforts to establish non-profit outlets have proved unsustainable.
The report confirms the general findings of previous reports that New Zealand media space has remained highly commercial. It also confirms the financialisation of media ownership in the form of banks and fund managers.
The report also observes that in 2014 convergence between New Zealand mass media and the communications sector generally was in full swing. Companies, such as Spark (former Telecom NZ), started to compete head-to-head with the traditional broadcasters on the online on-demand video and television markets. The American online video subscription service Netflix is entering the NZ market in March 2015.
Additionally, the report notes evidence of uncomfortable alliances between citizen media, politicians, PR companies and legacy media. As Nicky Hager’s Dirty Politics book revealed, the National Party and PR practitioners used the Whale Oil blog to drive their own agendas. Also, events related to Maori TV, TVNZ and Scoop raise questions about political interference in media affairs. It is now evident that the boundaries between mainstream media, bloggers, public relations practitioners and politicians are blurring.
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Papers by Merja Myllylahti
General trust in news declined from 53% to 48%, and trust in the news people themselves consumed fell from 62% to 55%
Trust in news found via social media and social engines also declined, with 26% of people trusting news they found via search engines, and 14% trusting news on social media
All news brands in New Zealand experienced erosion of trust, with statistically significant declines occurring for Newshub and Newstalk ZB
As in 2020, RNZ (6.8 out of 10) and TVNZ (6.6 out of 10) were the most trusted news brands, and Newshub remained the third most trusted (6.3 out of 10) news brand.
During 2020, the Covid-19 pandemic had a major impact on New Zealand media outlets. The majority of news websites reported a strong increase in their audience numbers, but at the same time their advertising revenue declined sharply. News companies’ finances were boosted by the Government’s $50 million crisis package and wage subsidy, but some of them also gained reader revenue enabling outlets such as BusinessDesk, The Spinoff and Newsroom to expand. However, the overall picture was not as rosy. During 2020, approximately 637 jobs disappeared from the New Zealand media industry.
In 2020, it emerged that Google was more involved in the New Zealand media sphere than was previously the case. During the pandemic, the search-engine company provided financial support to 76 news organisations across the Pacific, including non-profit news outlet Crux in Queenstown. Over the years, it has trained hundreds New Zealand of journalists in technical skills.
During 2018, the New Zealand media market remained at least partly competitive. In September, the Court of Appeal rejected the NZME-Stuff merger, and the two companies continued their duopoly and dominance in print and online news.
In November, MediaWorks announced that it had signed a conditional merger agreement with Australian outdoor advertising company QMS. If the deal goes through, QMS will have a substantial shareholding in MediaWorks. However, its current owner Oaktree Capital Management will maintain the majority shareholding in the merged entity.
In 2017, there were seven privately owned media companies: BusinessDesk, NBR, The Spinoff, Allied Press, Newsroom, Bauer Media and MediaWorks - five of these were locally owned. Additionally, Scoop was owned by a New Zealand based non-profit charitable trust.
The media market maintained some competition as the Commerce Commission ruled against NZME & Fairfax and Sky TV & Vodafone mergers. However, at the time of writing it was not clear how the competitive landscape will evolve. In October, NZME & Fairfax took their fight to the High Court, and that decision was pending when the report was published. In June, Sky TV and Vodafone decided to abandon their merger.
The report notes that the digital news market expanded during 2017. There was more available digital news and current affairs content for the public. Yet, at the same time the print newspaper market shrunk with regional and local newspapers reducing staff and publication dates. Commercial television broadcasting showed signs of distress.
New Zealand media ownership: key trends and events
• More privately-owned media outlets than in any previous year
• Sky TV and Vodafone merger denied and abandoned
• NZME-Fairfax merger appeal at the High Court
• Newsroom enters the digital news market
• Financial difficulties for commercial TV broadcasters
For the first time in six years, New Zealand media companies are exclusively owned by financial institutions. Media moguls and News Corp have sold all their shares in New Zealand media companies. The report also finds that the board structures of New Zealand media corporates favour further consolidation. This is not surprising, as many board directors have other directorships in financial institutions and corporate advisory businesses.
In November, the Commerce Commission declined its preliminary merger approval of NZME & Fairfax. Unexpectedly, the commission stated in strong terms that the merger would give the combined company too much editorial and commercial power in print and digital platforms. It concluded that the merger failed the public benefit test, and would not be beneficial for democracy.
However, the Commerce Commission makes its final decision about the NZME and Fairfax merger on March 2017. It is still possible that the merger will go ahead.
In October, the commission delayed its decision about Sky TV & Vodafone NZ merger as it sought answers to “unresolved issues.” The commission raised concerns about the merged company’s market power in premium content such as live sports, as well as the likely impact on consumer prices. The Commerce Commission decision about the merger is expected on December 21.
Both media merger proposals were not well received by the public and competing corporations. The Commerce Commission received 56 submissions about the NZME and Fairfax merger of which only three were supportive of it. The commission received 16 submissions about the Sky TV & Vodafone NZ merger, and they were all against.
The report finds that the New Zealand media market has failed to produce new, innovative media outlets, and that all the efforts to establish non-profit outlets have proved unsustainable.
The report confirms the general findings of previous reports that New Zealand media space has remained highly commercial. It also confirms the financialisation of media ownership in the form of banks and fund managers.
The report also observes that in 2014 convergence between New Zealand mass media and the communications sector generally was in full swing. Companies, such as Spark (former Telecom NZ), started to compete head-to-head with the traditional broadcasters on the online on-demand video and television markets. The American online video subscription service Netflix is entering the NZ market in March 2015.
Additionally, the report notes evidence of uncomfortable alliances between citizen media, politicians, PR companies and legacy media. As Nicky Hager’s Dirty Politics book revealed, the National Party and PR practitioners used the Whale Oil blog to drive their own agendas. Also, events related to Maori TV, TVNZ and Scoop raise questions about political interference in media affairs. It is now evident that the boundaries between mainstream media, bloggers, public relations practitioners and politicians are blurring.
General trust in news declined from 53% to 48%, and trust in the news people themselves consumed fell from 62% to 55%
Trust in news found via social media and social engines also declined, with 26% of people trusting news they found via search engines, and 14% trusting news on social media
All news brands in New Zealand experienced erosion of trust, with statistically significant declines occurring for Newshub and Newstalk ZB
As in 2020, RNZ (6.8 out of 10) and TVNZ (6.6 out of 10) were the most trusted news brands, and Newshub remained the third most trusted (6.3 out of 10) news brand.
During 2020, the Covid-19 pandemic had a major impact on New Zealand media outlets. The majority of news websites reported a strong increase in their audience numbers, but at the same time their advertising revenue declined sharply. News companies’ finances were boosted by the Government’s $50 million crisis package and wage subsidy, but some of them also gained reader revenue enabling outlets such as BusinessDesk, The Spinoff and Newsroom to expand. However, the overall picture was not as rosy. During 2020, approximately 637 jobs disappeared from the New Zealand media industry.
In 2020, it emerged that Google was more involved in the New Zealand media sphere than was previously the case. During the pandemic, the search-engine company provided financial support to 76 news organisations across the Pacific, including non-profit news outlet Crux in Queenstown. Over the years, it has trained hundreds New Zealand of journalists in technical skills.
During 2018, the New Zealand media market remained at least partly competitive. In September, the Court of Appeal rejected the NZME-Stuff merger, and the two companies continued their duopoly and dominance in print and online news.
In November, MediaWorks announced that it had signed a conditional merger agreement with Australian outdoor advertising company QMS. If the deal goes through, QMS will have a substantial shareholding in MediaWorks. However, its current owner Oaktree Capital Management will maintain the majority shareholding in the merged entity.
In 2017, there were seven privately owned media companies: BusinessDesk, NBR, The Spinoff, Allied Press, Newsroom, Bauer Media and MediaWorks - five of these were locally owned. Additionally, Scoop was owned by a New Zealand based non-profit charitable trust.
The media market maintained some competition as the Commerce Commission ruled against NZME & Fairfax and Sky TV & Vodafone mergers. However, at the time of writing it was not clear how the competitive landscape will evolve. In October, NZME & Fairfax took their fight to the High Court, and that decision was pending when the report was published. In June, Sky TV and Vodafone decided to abandon their merger.
The report notes that the digital news market expanded during 2017. There was more available digital news and current affairs content for the public. Yet, at the same time the print newspaper market shrunk with regional and local newspapers reducing staff and publication dates. Commercial television broadcasting showed signs of distress.
New Zealand media ownership: key trends and events
• More privately-owned media outlets than in any previous year
• Sky TV and Vodafone merger denied and abandoned
• NZME-Fairfax merger appeal at the High Court
• Newsroom enters the digital news market
• Financial difficulties for commercial TV broadcasters
For the first time in six years, New Zealand media companies are exclusively owned by financial institutions. Media moguls and News Corp have sold all their shares in New Zealand media companies. The report also finds that the board structures of New Zealand media corporates favour further consolidation. This is not surprising, as many board directors have other directorships in financial institutions and corporate advisory businesses.
In November, the Commerce Commission declined its preliminary merger approval of NZME & Fairfax. Unexpectedly, the commission stated in strong terms that the merger would give the combined company too much editorial and commercial power in print and digital platforms. It concluded that the merger failed the public benefit test, and would not be beneficial for democracy.
However, the Commerce Commission makes its final decision about the NZME and Fairfax merger on March 2017. It is still possible that the merger will go ahead.
In October, the commission delayed its decision about Sky TV & Vodafone NZ merger as it sought answers to “unresolved issues.” The commission raised concerns about the merged company’s market power in premium content such as live sports, as well as the likely impact on consumer prices. The Commerce Commission decision about the merger is expected on December 21.
Both media merger proposals were not well received by the public and competing corporations. The Commerce Commission received 56 submissions about the NZME and Fairfax merger of which only three were supportive of it. The commission received 16 submissions about the Sky TV & Vodafone NZ merger, and they were all against.
The report finds that the New Zealand media market has failed to produce new, innovative media outlets, and that all the efforts to establish non-profit outlets have proved unsustainable.
The report confirms the general findings of previous reports that New Zealand media space has remained highly commercial. It also confirms the financialisation of media ownership in the form of banks and fund managers.
The report also observes that in 2014 convergence between New Zealand mass media and the communications sector generally was in full swing. Companies, such as Spark (former Telecom NZ), started to compete head-to-head with the traditional broadcasters on the online on-demand video and television markets. The American online video subscription service Netflix is entering the NZ market in March 2015.
Additionally, the report notes evidence of uncomfortable alliances between citizen media, politicians, PR companies and legacy media. As Nicky Hager’s Dirty Politics book revealed, the National Party and PR practitioners used the Whale Oil blog to drive their own agendas. Also, events related to Maori TV, TVNZ and Scoop raise questions about political interference in media affairs. It is now evident that the boundaries between mainstream media, bloggers, public relations practitioners and politicians are blurring.
The paper is based on data and document analysis of the Australian Competition and Consumer Commission’s (ACCC) Digital Platform Inquiry (Australia), The Cairncross Review (UK) and the New Zealand Commerce Commission’s ruling of NZME/Fairfax merger (New Zealand). The data is also gathered from media companies submissions to the ACCC and Cairncross reviews.
The paper aims to critically analyse how governmental agencies define Facebook’s and Google’s power in the local media markets, and what remedies they suggest for addressing their power. It also assesses to what extent views of governmental inquiries and reviews align with the media industry. Additionally, the paper investigates whether the Australian and the UK reviews regard Facebook and Google as media companies, and where the boundaries between media companies and platforms are drawn. Carlson observes that “the struggle of journalism are often struggles of boundaries - who counts as a journalist, what counts as journalism” (2015, p.2). This struggle of boundaries can also be applied to media institutions as they are contesting the boundaries with other actors, such as platforms, over the control who counts as a media corporation.
Some earlier academic studies argue that Facebook has substantial ‘power’ over media companies as it has a vast number of users and user data of which news companies have increasingly become dependent on (Myllylahti, 2018a; Nielsen & Ganter, 2018; Srnicek, 2017). Additionally, academics have warned news media about this dependency and ‘monopolistic power’ of platforms (Bell & Owen, 2017; Pickard, 2017; Nielsen & Ganter, 2018; Myllylahti, 2018a). However, the author of this paper has observed that “platforms and news companies are mutually dependent, but what makes this relationship problematic is that news companies are failing to monetise the traffic and attention they gain on platforms” (Myllylahti, 2018b, p.6).
Other academics have raised concerns that competition regulators tend to protect interests of industries, not of the general public, and therefore they may not address problems raising outside their remit (Parker et al., 2016; Lynskey, 2018). Parker et al. (2016) argue that when [news] companies call for stronger regulation, these calls “should be taken with a grain of salt” as the companies are protecting their own commercial interests (p.231). They also argue that as government agencies (such as ACCC) ask business leaders for advice to guide their regulatory rulings, and this “means that the rules end up benefiting companies – or certain highly influential companies – rather than the public at large” (Parker et al., 2016, p.235). Lynskey argues that platforms have other power than just ‘market power’ which can lead to dominance and abuse of their dominant position, and therefore some effects of their power “are not captured by competition law” (Lynskey, 2018,p.176).
Some academic reports have observed that government agencies don’t regard Facebook and Google as competitors for news companies in the reader side of the market, only in digital advertising (Myllylahti, 2018b). In the context of all above, before we can understand regulatory regimes and suggested remedies, we need to understand what power we are referring to, what market that power is attached, whose interest governmental agencies are promoting, and where the boundaries of media corporations and platforms lie.
The dominance of Google and Facebook in the major Western digital advertising markets has forced news companies to increase their investments on audience monetisation (ACCC, 2019; Hindman, 2018; Author, 2018a; Winseck, 2018). In the context of the political economy of attention, this paper investigates whether news publishers income models have been revolutionised from advertising to reader-supported model. Houston believes that “the reader-revenue revolution is a reality” and suggests that readers have aided news companies to overthrow “tyranny of old ad-only business models” (Houston, 2018). Similarly, the International News Media Association (INMA) observes that disruption in the digital advertising markets has changed the “revenue mix in our industry from its historical equilibrium to one where audience revenue plays a larger role” (Lindsay, 2017, p.9). Additionally, Newman reports that focus on reader revenue means “a huge change of focus for the industry” (Newman, 2019, p.5). However, some recent studies contradict the reader-revenue revolution rhetoric by showing that advertising has remained a “critical part of online revenue” (Nicholls et al., 2018).
This paper examines to which extent reader-revenue revolution is happening. In political science, revolution proposes a sudden change from one constitution to another and this paper investigates to which extent the claim of reader-revenue revolution is valid (Houston, 2018). The paper utilises quantitative data from media companies financial documents and announcements as well as from the relevant previous studies (Author, 2014). First, the paper compares digital subscriptions numbers of the Wall Street Journal, The New York Times, the Financial Times, The Times and The Australian in a six year period from 2012 to 2018 to assess revenue from implemented reader payments as well as digital advertising. Secondly, the paper examines voluntary reader memberships and donations to explore if these are aiding news publishers such as The Guardian to move into audience-supported model.
Preliminary findings of the paper propose that newspapers digital subscriptions have substantially increased in a six-year period from 2012 to 2018, and their digital earnings have grown accordingly. The paper offers some evidence that news publishers are moving away from advertising based to reader based revenue model, but it contests the view of the emergence of the reader-revenue revolution.
News companies reliance of monetisation of readers attention has benefits and pitfalls. Benson believes that the “upside” of digital subscriptions is that readers pay money “for something they really want or need”, but the downside is that “subscriber funded news caters to relatively high-income, high-education elites” (2019, p.146). Newman agrees that “the rise of paywalls is shutting more people off from quality news and making the internet harder to navigate” which can lead to news avoidance (Newman, 2019, p.6). As Hindman asserts in his book “the digital attention economy increasingly shapes public life… and ultimately which news and democratic information citizens see” (Hindman, 2018, p.5). Earlier academic studies have found that digital subscriptions, paywalls, may restrict the public’s access to certain news and information whereas voluntary reader payments are normally supporting non-profit or digital media outlets which offer content for free to the public (Author, 2018b). Increases in reader payments, both in involuntary or voluntary, have societal consequences which require further investigation.
The paper examines digital subscription models offered by Google, Facebook, Apple and Amazon, and attempts to assess what kind of monetary benefits these models deliver for news publishers. The paper is based on a document analysis method and utilises corporate documents, academic articles, industry and media reports to map the field and to investigate the issue. The paper aims to identify core issues related to platform subscriptions and to offer some findings related to news publishers revenues from platform subscription acquisition. The author notes that research in this field is challenging as the platform subscriptions are currently being developed and tested. Additionally, news companies don’t disclose any specific data about their digital subscriptions from platforms and related revenue. These are limiting the scope of the study affecting its findings.
Earlier academic studies have warned about news publishers increasing dependency on platform companies as well as of their monopolistic powers (Bell & Owen, 2017; Pickard, 2017; Nielsen & Ganter, 2018; Author, 2018a). Srnicek suggests that in the platform capitalism the companies such as Facebook hold all the power over audience, data and monetisation making subscription acquisitions from the platforms problematic (Srnicek, 2017). In his book The Internet Trap, Matthew Hindman cautions that news companies have not been able to move to ‘post-industrial era’ because they depend “critically on the industrial plants” of platform companies for their audience attention (Hindman, 2018, p.179). He also argues that Facebook’s and Apple’s subscription platforms “are particularly damaging to the autonomy of news outlets” because they only work within these platforms, making monetising outside the platforms problematic (Hindman, 2018, p.179). Some of the news companies have abandoned distribution on social media platforms to avoid this problem and because of poor monetisation opportunities. To exemplify, in 2017 the Guardian pulled out of Facebook’s Instant Articles and Apple News stating its desire to build deeper relations with its readers to grow its memberships (Davies, 2017).
Platform companies are increasingly pressured by governments, politicians, news industry and regulators to share their revenue with news media. To compact this increasing pressure from the regulators in the US, Australia and Europe, they have launched digital subscription services which are aimed to aid publishers content monetisation. Google’s head of partnerships, Luca Forlin, comments that “the context behind our subscription initiative is that we do care… we care about news” (“Google, Facebook: different platforms, different acquisition and retention strategies”, 2018). He says that its digital subscription service helps publishers to convert users attention into subscription and works as a retention tool as well. Facebook has stated that it will “continue investing in new ways to enable publishers’ subscriptions business, and improving our marketing tools to make them better suited for publishers needs” (Brown et al., 2017).
Based on the preliminary analysis of platform subscription models offered by Facebook, Google, Apple and Amazon, the paper finds that the monetary benefits of digital subscription services offered via platforms are still unproven, and there is not enough empirical evidence to draw any far-reaching conclusions about these benefits. Platforms have promised to share 70-100 percent of the subscription revenue news publishers make via their platforms, but there is currently no data to assess how much revenue news companies make from platform subscriptions.
Some of the earlier industry and academic reports offer some guidance related to platform revenue. A 2017 report by the World Association of Newspapers and News Publishers suggests that Facebook made only seven percent of the news publishers digital revenue with most of the revenue coming from advertising (WAN-IFRA, 2017, p.48). Recent academic studies suggest that news publishers rely heavily on Facebook for traffic and user attention as they attempt to turn ‘eyeballs’ into subscription revenue (Author, 2018a; Cornia et al., 2018). A 2018 study found that Facebook offers news publishers insignificant revenue: for the companies studies, less than one percent of their total revenue came from Facebook traffic and social shares (Author, 2018b). Additionally, a report by Cornia et al. (2018) observed that news organisations continue to invest in social media distribution despite the fact that monetisation on these platforms remains challenging.
Preliminary investigations for this paper suggest that Facebook drives news publishers traffic, brings more people to their ‘conversation tunnel’, and in some cases converts audiences to subscribers. Additionally, Google subscriptions have been found beneficial because it “simplifies subscription processes” (McClatchy, 2018). However, converting users’ attention from platforms may come with an additional cost. Polish Gazeta Wyborcza, for example, has admitted that it using paid campaigns on Facebook for acquisitions, denting its revenue from platform subscriptions (Cornia et al., 2018). Other problems reported by news companies include lower conversion rates.
Social media has become a popular research topic in academia, and the field of research is expanding. Researchers such as Christian Fuchs have extensively analysed social media companies in terms of audience commodification, monetisation and exploitation of digital labour. The Tow Center for Digital Journalism has also examined the power relations between Facebook and news publishers. However, this relationship requires in-depth empirical investigation especially in regard to social sharing and the monetisation of news content on Facebook.
To aid the analysis of relations between Facebook and news companies the concept of platform capitalism is utilised. Platforms make a profit by extraditing large amounts of data from their users and by operating as an intermediary between different user groups, and this business model allows them to control users and set rules for other participants on the platform. With the evidence gathered from the five case studies, the paper will consider the usefulness of the platform capitalism concept in understanding the monetary and power relations between news companies and Facebook.
Whatever the outcome of these mergers, media companies are facing more job cuts and in the worst-case scenario closing. In 2016, Fairfax’s chief executive officer Greg Hywood warned that if the commission doesn’t approve NZME-Fairfax merger, “it becomes endgame” for its New Zealand media (Smellie, 2016). The JMAD New Zealand media ownership report 2016 also observed that the convergence and consolidation of the New Zealand media and telecommunication sectors are likely to continue. All the commercial news corporations in New Zealand are now exclusively owned by financial institutions, and it is in their interest to push through structural changes and savings (Myllylahti, 2016).
Similarly, in the United States newspaper ownership is concentrated in the hands of financial owners and media barons, and as a consequence many newspapers have been closed down or have faced serious savings (Abernathy, 2016). Abernathy points out that “as a result of these dynamics, many smaller cities and towns could lose their local newspapers.” She adds that the “prospect of such “news deserts’’ across entire regions of the country would have significant long-term political, social and economic consequences (Abernathy, 2016, p.7).
There is a danger that New Zealand will face similar “news deserts” and democratic deficit when NZME and Fairfax start to streamline their businesses either as a separate unit of as a merged company. The diversity of the news media is likely to suffer, but new entrants may well emerge. However, it is unlikely that the newcomers will have a similar reach and news coverage as Fairfax and NZME.
The research is based on document analysis, and the publishers included are The NYT Co., Gannett, Fairfax Media and Postmedia Network. The paper concludes that, in general, news publishers are still print reliant in terms of their revenue, and moving digital-only would not be a viable option for them without substantial structural changes and cost cutting. The paper finds - somewhat surprisingly - that The NYT Co. continues to be greatly reliant on print revenue even when the news organisation is heralded as a leader in digital content and subscriptions.
Business models of news publishers are a critical research area for academia, as they affect newsrooms; how they are funded; and how journalism is conducted. In order to evaluate how digital news publishers are in terms of their revenues, this paper examines digital earnings of some of the largest news publishers in the Western economies. The paper also considers the nature of their revenue sources.
The case studies presented in this paper include Gannett, The New York Times Company, News Corporation, Fairfax Media, Schibsted, Axel Springer, Sanoma, and Pearson. These corporations were chosen as case studies as they are some of the largest news publishers globally, or in their regional areas; they have implemented digital subscriptions and have innovated in digital advertising; and operate in different continents and countries including the United States, Australia, Europe, and more specifically in Germany, Norway, Sweden and Finland.
The paper utilises document analysis as its method. The research data is gathered from 2014 and 2015 corporate documents including annual reports, financial reports, market announcements and investor presentations. There are considerable differences between the news publishers in their disclosure, and some of the publishers do not reveal detailed information about their digital subscription and digital advertising income. As a result, some data between the chosen media corporations is not directly comparable. The structure of the companies chosen for this study varies, and this had to be taken into account when comparing the data.
Additionally, the paper considers how patterns of news delivery are changing as the news publishers collaborate more closely with social media corporations, such as Facebook, and technology companies such as Apple. Some leading news publishers, such as The New York Times and BuzzFeed, are collaborating with Facebook’s Instant Articles service in news delivery, while The Guardian, The Economist, and the Financial Times are using Apple News service in their news delivery.
The paper also proposes that journalism scholars need to update business model frameworks identified in the earlier academic research. Current models identified do not fully reflect the complex nature of the contemporary news publishers’ income streams and structures. As the revenue sources of newspaper companies diversify, more sophisticated tools are required to evaluate viability of these models. This paper provides a contemporary revenue model to evaluate news publishers’ income sources, including print and digital advertising, and print and digital subscriptions.
Let’s put this into a context. In 2017, the Pew Research Center estimated the advertising revenue of U.S. newspapers was US$16.5 billion. So, in a single quarter, these three platform companies made 2.5 times more in advertising revenue than the U.S. newspaper companies in a year.
decades of investment in digital distribution, many newspapers still have a larger number of readers for their print products than for their online editions via PCs (see,
e.g., NRS, 2017a). The effects of these undersized online audiences are exacerbated by the fact that readers of digital editions are an order of magnitude or two less attentive than their print counterparts (Thurman, 2017). The result is that newspapers receive by far the greater part of their audience attention from their print channels (ibid.). This distribution of attention is an explanation for why print continues to deliver high proportions of newspaper revenue (Pew Research Center, 2016: 14).
This chapter examines some of the symptoms and causes of the crisis facing newspapers via analyses of their finances and of audience measures. The consequences of the crisis, and whether there are any realistic remedies, are also considered, both in
relation to journalism as a product and to the institutions, such as newspapers, that have traditionally produced it.
We start with an analysis of the financial performance of multiplatform news publishers in Australia, Europe and the USA, which leads us to conclude that digital distribution is not reversing newspapers’ decline, and raises questions about the support for journalism in the long term. Next, some of the consequences of the declines that have already taken place are discussed. Moving from consequences to possible remedies, the
chapter focuses on two areas. Firstly, media policy, and secondly, journalism as a product: what news should be produced and how it should be delivered. Another strand
of the chapter concerns audience measures. They are used to help explain newspapers’ continuing dependency on print revenues, and are understood, depending on their
constitution and use, as both a party to the crisis and as an able assistant in its alleviation.
The traditional barriers between newsrooms and management have blurred because news organizations continue to battle against shrinking revenues. In this environment, it is hard for editors and journalists to ignore information about their audience behaviour and ratings. Previous academic studies argue that the business models of Western news publishers are in trouble, and not a single new model has emerged to replace the old business model based on advertising and subscription revenue (Picard 2011; Rosenstiel, Jurkowitz and Hong 2012; Chyi and Tenenboim 2016; Myllylahti 2016a). As news publishers are trying to build up digital and other revenue streams, monetising on their audiences has become a matter of urgency. While pursuing larger audiences, publishers have shifted news delivery to social media platforms. In his report, Piechota (2016) found that 81 percent of American and European news publishers are now delivering news content via Facebook. This is done “to increase reach and engagement with publishers’ content and to acquire traffic from Facebook to publishers’ own channels” (Piechota 2016, 48). Publishers growing dependency on Facebook–once more–enhances the need to monitor their audiences. Paradoxically, in 2016 news publishers were still dependent on print readership and revenue. A study of eight large news publishers found that The New York Times (USA), which is heralded as one of the most digitally advanced news corporations in the world, made only 25 percent of its total revenue from digital sources. The same figure for Gannett (USA) was 35 percent, and for Postmedia (Canada) eight percent (Myllylahti 2016a).