Local News Companies Need to Fight Back

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By Brett Levy


For months, I’ve struggled with a question I’ve been wanting to ask the news media: Isn’t it time that our industry band together and form a true challenge to Google, Facebook, Apple and all the other online sites that use content for free or nearly so while making billions and billions of dollars at our expense?

Each time I began writing, though, something would change. News Corp, for example, announced that it might launch a news aggregation site called Knewz that may or may not challenge Facebook and Google. But can Knewz really compete with the big boys? It doesn’t seem likely.

Worse, one of the primary reasons News Corp is creating this product is to boost exposure to conservative publications rather than work for the industry as a whole. While it may be true that Knewz might benefit many news companies that participate, will the product really be anything more than another version of fast-growing news aggregator SmartNews? It is possible that News Corp has the grand vision needed to save the industry, but history has shown that newspaper companies have trouble executing competitive online projects and generally fail to win over the technology-consuming masses.

In another fast-evolving story, Facebook has been revealing plans to create a dedicated news tab and even pay $2-3 million a year to news organizations that sign on to a 3-year deal. While a news tab and payouts sound like a great idea, we know so little about what that really means. How visible will this tab be? How many companies, and which ones will receive payments? Will any of the promised funds benefit struggling local news company owners like Gannett or McClatchy? What about smaller companies? What is stopping Facebook from changing its mind as soon as antitrust pressures – New York has launched an investigation into Mark Zuckerberg’s company – ease?

Google recently announced that it has changed its algorithm to highlight “original reporting,” but how does the company even determine what is “original reporting,” and again, does it even include small local news publications? And like the promises made by Facebook, how long will they last? Did Google make a permanent algorithm change, or will search tools revert to favoring other content after multiple threats of antitrust investigations pass?

In the meantime, Facebook, Google, Amazon and Microsoft-owned LinkedIn will soak up 74.8% of the expected $129.24 billion worth of national online advertising in 2019, according to emarketer. It’s that overwhelming market share that puts the news industry in such a weak position, and it’s that very massive concentration of wealth that should inform us. Historically, massive markets are the most ripe for innovative and well-differentiated products.

Look, I’m not suggesting some half-baked concept that will become a gooey mess with poorly thought out features and barely functioning technology. What our industry needs is a truly competitive online platform that offers premium content, strong social media appeal and a safe space from the craziness of Facebook, Google and even the less-profitable Twitter. We don’t need to attract every social media user out there to be successful. In fact, a new social media platform would make about $15.5 billion a year if it could attract about 12% of the overall online advertising market.

That’s a similar amount recommended by a team of academics who proposed giving every American adult a $50 income tax credit to donate to their favorite news organization. While the tax credit is a fine idea, getting it through today’s divided Washington does not seem likely. Even if such a credit passed, history has shown that changes in government often result in cuts to public broadcasting and the arts.

The academics’ proposal also will favor older and larger news organizations that have strong brand identity. Seriously, what is the likelihood of The Nome Nugget in Alaska getting much of that funding? It seems to me that if we can resolve the business model ourselves, we will have a bigger say in our destiny while benefiting democracy.

So what might a competitive social media platform look like? Well, that would take some serious teamwork among the various news companies and potential investors out there, but here are some concepts to consider:

  1. The industry could form a cooperative similar to the Associated Press, only instead of it being a story-sharing platform, this new organization would create a fair revenue-sharing model.
  2. The platform would allow members to try a wide variety of additional funding options, such as subscriptions, free content to draw traffic to websites, or donations.
  3. The platform would need to be more than just a weak duplicate of existing social media platforms. One way this platform could distinguish itself is by promising transparency about the data collected for and shared with advertisers while providing an ethical alternative to established social media options.
  4. Strict content quality standards and more aggressive moderation will help attract those who seek a safer haven than Facebook or Twitter. Sites that repeatedly rely on #fakenews, run questionable content or encourage hate would be banned. The creation of a certification process may increase trust in the new platform.
  5. Advertising dollars must flow fairly not only to existing large news organizations and smaller community newspapers, but also to individual journalists who may cover a niche topic or a small portion of their community. Providing monetary rewards for small organizations or even individuals will not only result in broader news coverage for neglected areas of our society, but serve as an incubator for new, agile media organizations. This kind of content can be used to attract readers who want to know more about their communities while increasing the breadth and depth of local news.
  6. The platform must be agile enough to evolve with changing technology and the habits of social media users.

As this new platform’s user base grows, news organizations may want to consider removing their content from abusive online and social media sites or to at least use their newfound power to negotiate better ad revenue-sharing deals. By exclusively putting content on this new social media site, there is a greater likelihood of users switching to the new platform. If nothing else, Facebook, Google, Twitter and Apple would treat the news industry more respectfully once they realized the free-ride days are over.

Funding for the project might come from the news companies themselves or nonprofits looking to fund more enduring solutions. It’s possible that other forward-thinking investors might be interested in donating to the cause to help save America’s most critical democratic institution.

Regardless of the funding source, control needs to remain in the hands of an independent board free to adapt the platform as needed, and to protect it from corporate or individual stakeholders seeking to co-opt the agenda.

Many of the finer details can be worked out later, but speed is critical as the financial circumstances of most media companies continue to decline. Another immediate advantage to acting quickly is that there is a lot of anger still being directed at existing social media companies that have failed to live up to public expectations and responsible behavior. But beyond all those other concerns, the most critical factors in why a shared, news media-owned platform is needed: Journalists need to regain control of their content and destiny.

Brett Levy is a media technology consultant, the editor and publisher of the McDowell Mountain Ranch Real Estate News and the administrator of the L.A. Times Line Facebook group. Twitter: @brettdl