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Nov 9 2019
Facebook News & the current wave of news aggregators
Reading Time Estimate
29 min
What’s Happening
In the latest in a spate of news aggregator activity, Facebook just launched a limited US test of a dedicated news tab called Facebook News with 200 news publishers and 200K users. Facebook News will be a tab in the Facebook app, separate from the main activity/news feed which will continue to show news articles as well. Facebook, which currently has 2.5B monthly active users, expects the new tab to have 10-20% of the audience of the main feed (20-30M users in the US).
Facebook News offers a feed of aggregated headlines from partner publishers, with many of the most prominent publications on-board – e.g. The New York Times (NYTimes), Washington Post, and The Wall Street Journal (WSJ). The tab will be organized by algorithms that personalize much of the topic-based feed using user profile, activity and preferences (e.g. topics and publishers users can opt to “hide”, a local news section). Facebook also hired a small team of journalists (up to 25) to curate the approx. 10 national stories placed at the top of the feed (“Today’s Stories”). The team will be separate from the group signing up publishers and will have a measure of editorial independence.
Facebook will pay about a quarter of the news publishers involved to participate and provide their headlines and previews for 2-3 years. The publishers to be compensated are selected based on whether Facebook wants more of their content and/or if there is a paywall. The deals are individually negotiated under NDA, with upfront guaranteed fees ranging from “hundreds of thousands” per year for smaller publishers to $1-3M for larger publishers, and even higher for the largest (e.g. WSJ). Collectively, Facebook could pay as much as $100M to publishers.
Publishers will also have some control over the experience and likely get more data about the readers coming to their site from Facebook News. Subscribers can connect their digital subscription (through a Your Subscriptions section), while nonsubscribers may see the full article or a paywall. The Facebook News feed will not show ads but publishers can draw readers to their own websites where they can run ads or convert to subscriptions. They also have the option of showing the full article on Facebook and using Facebook’s ad network, thereby sharing in the ad revenue.
Facebook’s stated intentions are to give users more control and offer a wider range of news, as well as “sustain great journalism and strengthen democracy.” The effort is being viewed as a response to criticism of its platform as a source of misinformation and its monetization of news articles without compensation. Facebook News appears to be, at least in part, an attempt to rebuild its reputation and its relationships with news publishers. One publishing executive called the Facebook News deals “free money,” since these “licensing” deals involve headlines and previews that might fall under fair use anyway (e.g. as in Facebook’s main activity/news feed). Facebook is also pouring $300M over 3 years into local news and investing in initiatives to combat fake news, in addition to a growing emphasis on global communities. It continues to face criticism, however, most recently for its stance on not taking down political ads with false information (though it is considering a ban on micro-targeting of political ads).
Facebook News puts emphasis on quality content, original journalism, and local news, enabled by AI-powered personalization, human curation, and user control. Publishers will have to adhere to standards that follow Facebook’s News Page Index and Publisher Guidelines, which include monitoring for misinformation (as labeled by 3rd-party fact-checkers) and community violations. Publishers can also be removed if they fail to meet the criteria after joining the program. The editorial team selecting Today’s Stories” will also prioritize original journalism, the rationale being that original content is more expensive to produce and harder to recognize without experienced human judgment. Facebook also plans to expand local and international news sources as the program scales, though it is not clear how it plans on compensating smaller publishers.
The response to Facebook News is mixed, with prominent support from big publishers and former naysayers – many hoping the direct licensing model becomes the new normal – as well as continued criticism from some industry groups. Facebook News faced backlash for its inclusion of Breitbart, one of the most widely read conservative media outlets and a controversial publication characterized by many as biased. Last year, the WSJ reported that Facebook had an internal whitelist to protect high-profile accounts and media outlets that included Breitbart. Facebook executive and Instagram head Adam Mosseri has responded to the backlash by pointing to Facebook News’ goal of presenting an array of political perspectives and ideologies, as well as the comparative lack of criticism for Breitbart’s inclusion in Apple News.
Not everyone is convinced that Facebook News will do well. The effort is facing some early skepticism, much of it stemming from Facebook’s past forays into news with limited success – e.g. Trending topics, Instant Articles, Facebook Live, Facebook Watch. Trending topics shut down last year after low engagement and accusations of bias. Instant Articles offered full articles with ad revenue-sharing but low monetization and restrictions (e.g. control over ads) drove big publishers to abandon it around 2017. Facebook Live and Facebook Watch offered upfront payments to publishers for their work; however, Facebook pulled back on its original plans for Facebook Live to refocus on user-generated content, while Facebook Watch (on a separate tab, like Facebook News) has faced challenges in gaining traction. Publishers have also faced issues in the past with Facebook’s viewing metrics, causing them to over-invest in video content. In general, there are questions about Facebook’s level of commitment to Facebook News and whether it will last based on its history.
There is an ongoing shift in news consumption away from individual sources/publishers and towards social platforms and news aggregators. A recently published Pew Research study found that an increasing number of US adults get their news on social media – 55% say they do so “often” or “sometimes,” and 52% get their news on Facebook specifically.
An array of players, including tech firms, publishers and news aggregator startups, are jostling to capitalize on (and survive through) the shift:
Google runs 3 of the top 4 referral sources to publishers – in order, Google Search (#1); Google APIs – i.e. Google Cards on its mobile app or Chrome Content Suggestions on new mobile-browser tabs (#3); and Google News (#4). According to a 2018 report, Google’s sites represent 46% of all external referrals to news sites, followed by Facebook (29%). Despite Google News’ prominence as a news aggregator since its 2002 launch, Google Search drives substantially more referrals and Google API referrals have been growing rapidly since 2017. Chrome Content Suggestions has the advantage of placement on new tabs for the most popular mobile browser in the world; also, up until recently, Google Chrome and Google Search came pre-installed on most Android devices globally.
Google does not directly monetize Google News (despite a widely refuted estimate of $4.7B in gain annually). It does, however, benefit from traffic to its site and ad revenue in other areas and make use of the user data collected. Google also inserts ads near news articles on its other services (e.g. in the Google Discover feed on mobile).
Google has resisted paying publishers for access to the headlines and short excerpts displayed in Google News. It has faced legal challenges in Europe since 2006, with the most recent being the EU Copyright Directive passed in Jun 2019 which requires that aggregators pay for anything beyond “individual words or very short extracts.” EU states have 2 years to turn the directive in national law, with the first implementation taking place in France in Jul 2019. In a controversial response, Google announced it will remove the short excerpts from results to avoid paying publishers, and allow them to opt in with new settings that can specify how previews should be displayed. Its stance is that it does not “accept payment from anyone to be included in search results.”
Google has been investing in its news offerings over the past two years. In Mar 2018, it announced it would invest $300M over 3 years in the Google News Initiative, with the stated intention of elevating high-quality journalism, helping publishers grow, and supporting local news. At the same time, it unveiled a Subscribe with Google initiative to make it easier for users to subscribe and pay for partner publications, along with industry tools to help publishers maximize revenue. In May 2018, the Google News mobile app got a major overhaul offering a more integrated and AI-powered experience. Then, in Oct 2018, Google began adding “news cards” to the Discover feed on the mobile homepage, with articles personalized using AI and user preferences (e.g. language(s) spoken). In Sep 2019, Google announced it had updated its search algorithms to prioritize original and high-quality reporting, which had previously been a source of criticism.
Twitter is not a traditional news aggregator but still comes in at #5 in the top 5 referral sources for publishers, largely based on users sharing articles with their followers. Twitter just this week announced the coming rollout of Twitter Topics, which allows users to follow topics from a list of 300+. It hopes to make it easier for new users to engage on the platform and allow more active users to expand their discovery.
The original free Apple News iOS app was launched in 2015 as a successor to Apple Newsstand, with 85M monthly active users as of Jan 2019. This prior version offered human-curated news from partner publishers and built-in monetization through in-app advertising, with publishers retaining 100% from their own ads or 70% from Apple’s iAd ads.
In Mar 2019, Apple launched a paid-subscription tier in the Apple News app called Apple News+, based on its 2018 Texture acquisition. For $9.99/month (US), the service offers access to 300+ publications ($8K+ in annual value, according to Apple, based on the price of separate subscriptions). An Apple News+ subscription can also be shared within a family via Apple Family Sharing. Apple News+ subscription revenue is divided into two pools, 50% for Apple and 50% for a pool split amongst publishers based on relative readership (a form of revenue-sharing sometimes referred to as the “music industry model”). The WSJ has chosen to participate in order to expose its content to new readers and plans to hire 50 new staffers to support the channel. In contrast, the NYTimes and Washington Post have opted out, citing their desire to build a direct relationship with readers and grow digital subscription offerings (both are currently priced at more than $9.99). Early adoption of Apple News+ has reportedly been slow, with the most recent earnings call highlighting geographic expansion but without mention of performance.
Chinese tech giant and TikTok owner ByteDance (see our Oct 31 2019 brief) launched Toutiao in 2012, which has since become China’s #1 news aggregator app with 260M+ monthly active users. Toutiao surfaces headline recommendations based on a user’s data, activity and preferences, driving engagement largely through AI-powered personalization. On average, users are on Toutiao for 74 min a day. Toutiao sources content from 1.2M+ publishers, many of which are smaller organizations or even individuals (a more significant part of China’s news ecosystem than in the US) with whom it shares ad revenue. It also offers “mini apps” (incl. 3rd-party apps) such as games, car rentals, movie tickets, and travel, as well as mini-blogging and in-app video content (where users reportedly spend 50% of their time).
News aggregation is a prominent slice of ByteDance’s portfolio of apps and tools, which collectively have a reported 1.5B monthly active users. In addition to Toutiao (news and search in China), it also has TopBuzz (news outside China), France-based News Republic (global news), BaBe (news in Indonesia), an investment in Dailyhunt (news in India), and Helo (news in India). ByteDance is reportedly looking to sell TopBuzz in order to focus on TikTok. TopBuzz, which launched in 2015, has reached 36M+ monthly active users with strong recent growth, but lacks the traction of Toutiao or TikTok.
Other tech firms
  • Tencent News was the most popular news aggregator in China prior to Toutiao’s rise. It is now #2 with about 240M monthly active users. Tencent News’ success is largely derived from its integration with Tencent’s popular chat platform WeChat, which has 1.1B monthly active users. Tencent-backed news aggregator startup NewsDog, which is Chinese-owned, has found success in India with 60M+ downloads.
  • According to The Information, Snap is working on its own dedicated news area of Snapchat’s Discover section (which is currently focused primarily on tabloid-style entertainment). Targeting a launch date next year, Snap has been in discussions with publishers for their content, including some form of payment (likely either ad revenue-sharing or licensing fee).
  • In late Oct 2019, Amazon announced the release of its own news aggregator called News, an ad-supported video news offering on Amazon’s Fire TV and Fire tablets without download or subscription needed. It has around 20 content partners signed up, including Huffington Post, Bloomberg, and Sports Illustrated. Users will be able to open the news app through Alexa-enabled voice activation.
  • In Oct 2019, CNN reported that LinkedIn has a team of 65 journalists (and growing) focusing on professional or business content. The team generates original content (e.g. LinkedIn-created The Hustle weekly newsletter), curates stories for business users, and reaches out to select users to get them to comment on high-profile topics. LinkedIn’s goals are to be useful, engage users and increase relevant time spent across its platform.
  • Jeffrey Katzenberg’s coming “short video for mobile” service Quibi has 30+ projects/partnerships in play – including NBC News, BBC News, CBS News, and The Weather Channel. It plans to spend $1B+ on 7,000 pieces of content in its first year, and is backed by many of the big studios including Disney and WarnerMedia (see our Oct 24 2019 brief Disney+ and the age of streaming-video wars). Publishers are hiring and allocating talent for Quibi, with the platform paying licensing fees for them to develop content and buying long-term exclusive rights while allowing the publisher to own the IP. Quibi recently announced it had sold out its first-year ad inventory (worth $150M) even before launch.
  • In mid-Aug 2019, News Corp revealed its work on a news aggregation website and app called Knewz, which is being framed as a collaborative offering for publishers to strengthen their collective leverage against the large aggregators. Knewz is expected to draw from “hundreds” of sources across the political spectrum, link directly to publishers’ sites, and share data back, without taking a cut of ad revenue. Because Knewz will only be direct-linking, it will not need to strike individual licensing deals with other publishers. It plans to use both humans and algorithms to curate articles, highlighting original content and smaller news outlets, and without discriminating between paywall and non-subscription sites. News Corp has not confirmed that it will definitely launch Knewz but has already developed an early version that could launch as early as this year. News Corp has been a critic of the power of the tech aggregators, the lack of transparency around algorithms, certain policies or algorithms that downgrade paywall content and smaller outlets in results, and perceived political bias.
  • According to an Oct 2019 report by The Information, CNN is developing a news aggregation service referred to internally as NewsCo, with a dozen staff assigned/hired so far (and budget for 50 more next year). Based on current plans, publishers would be compensated through either ad revenue or subscription conversions. CNN plans to differentiate itself with journalistic expertise and reach – e.g. creating exclusive stories for the platform, providing context with content from its library, tapping local and international affiliates/publishers to build communities, experimenting with alternative media (e.g. video). NewsCo is part of a broader set of digital initiatives inside CNN, which are operating like a “portfolio of startups.”
  • European news aggregator Upday was launched in 2016 as a joint venture between Axel-Springer, the largest digital publisher in Europe, and Samsung. Earlier this year, Digiday reported that Upday had reached profitability in Q4 2018, tripling revenue in 2018, with 25M+ monthly active users. The app comes pre-installed on Samsung devices in Europe and is also available as an Android app. It curates content from 4,000 publishers that are selected based on quality and technical standards, with curation by human staff and automation (based on the user’s stated preferences). The app typically drives 1-10% of overall traffic from mobile to publishers’ sites, with revenue derived from advertising and content partnerships. The team currently numbers 100, with growth plans that include a news offering for other platforms, a podcast aggregator, expansion of its editorial hubs, and presence in connected cars. Its relationship with Samsung means it is available even on non-mobile devices – such as fridges.
  • The Information revealed in Oct 2019 that it is launching a $29/year ad-free tech news app for consumers called Ticker later this year. Inspired by the Briefing section of its website, Ticker will offer consumer-oriented summaries of tech news and a calendar of key upcoming events.
News aggregation startups
  • News Break (owned by Particle Media) was launched in 2017 and is currently the top Android news app and #2 news app in the US Apple App Store. News Break emphasizes local news using the phone’s location, drawing from 10,000+ sources. It is based on Yidian Zixun, another AI-driven news app and Toutiao competitor in China which shares ownership with Particle Media. Industry watchers have hinted that News Break’s success may be the result of “rampant marketing,” with advertising drawn from local police blotters. At the time of this brief’s development, a search for “news” on the iOS App Store resulted in a News Break sponsored ad in the top spot on the results screen.
  • SmartNews is a free news aggregation app founded in Japan that now has 20M+ monthly active users in its two markets – Japan and the US. SmartNews is among the leading news aggregators in both of its markets, and was called by earlier this year “the most reliably growing external referrer” for publishers. It raised $21M in Aug 2019, bringing its valuation to $1.1B. It aggregates content from hundreds of publishers (400 in the US) in an interface organized by topic-focused tabs that can be personalized. It also has a “Smart mode” offering abbreviated content for users needing offline access. SmartNews primarily makes money through shared ad revenue with publishers but also launched in Sep 2019 a SmartView First program that pays 30 publishers licensing fees based on monthly views.
  • Flipboard, which has been around since 2010, continues to be one of the most successful news aggregators with 150M users to date. It is among the top referral sources after Google, Facebook, and Twitter, and continues to grow in the double-digits annually as a referral source for publishers. Flipboard is known for its magazine/newspaper-like interface with social-sharing features (e.g. sharing collections). It uses machine-learning and a human editorial team to curate sources from 4,000+ publishers/creators and nearly every social platform, linking directly back to the source for the full content. It has emphasized helping users follow specific topics (e.g. self improvement, music, travel), creating “Smart Magazines” for them and enabling them to create and share their own “magazine-like” collections. Flipboard also is creating “vertical” magazines in collaboration with partners, e.g. The Tastiest for food. Flipboard has 150-200 employees and, as of mid-2018, was not yet cash-flow positive. It makes money from in-app ads, sharing revenue with several hundred premium partner publications.
  • Qutoutiao is one of the more popular news apps in China with 119M+ monthly active users (behind Toutiao and Tencent News). Backed by Alibaba and Tencent, Qutoutiao went public in 2018 and is currently valued at $1.1B, though it has underperformed since its IPO as it has battled in an intensely competitive environment to attract and retain users.
  • Other news aggregation startups include Japan’s Gunosy (went public in 2018 and has an estimated 9M monthly active users), US subscription-based aggregator Scroll, and Norwegian aggregator Sol.
What It Means
News aggregation is not new. This current wave, however, is distinguished by the investment by big tech firms in the US and China, the growing power of mobile digital platforms, and increasing leverage by the marquee publishers. As we have said elsewhere (see our Oct 24 2019 brief on the streaming-video wars and Nov 5 2019 brief on cloud gaming), the cliché is that “content is king” but in today’s environment, what is king is actually the customer. News aggregators, to be successful, need to go to where customers are and/or become a place where they want to go. This means a far greater emphasis on mobile, social and search in the realm of news than ever before – i.e. where consumers already spend most of their time watching videos, talking with friends, buying goods, and looking for information. While the incumbents like Facebook, Google, and Tencent have an edge in their ready access to eyeballs, aggressive upstarts have gained substantial traction through sizable investments in marketing, strategic partnerships, and AI-powered personalization.
  • While Chinese apps like News Break have done remarkably well in overseas adoption by investing in advertising on digital platforms (i.e. the TikTok model), it’s not clear whether that success is economically sustainable. Even in the US, digital advertising has become a sizable line item for publishers – the NYTimes, for instance, spent $156M in marketing expenses in 2018, a 32% increase in a year when overall revenue only grew 4.4%. Given that, as advertisers, they pay not just for ad placement but also for ad technology (which can be the same vendor in the case of Google), it’s not surprising then that they might want more leverage and a larger cut in their role as publisher.
Strategic partnerships
  • While smaller players like Upday have found success partnering for “eyeballs” (e.g. with Samsung to come pre-installed on devices), the big branded tech firms like Facebook and Apple are largely partnering for premium content (e.g. deals with the NYTimes or WSJ). This makes sense since the tech firms already have eyeballs as well as the marketplace heft to negotiate with the major publishers.
  • One aspect of this is building relationships with the marquee branded publishers. The likes of the New York Times, Washington Post, and The Wall Street Journal can be a draw for users; conversely, an aggregator with ambitions to be “a single source for news” will risk looking like a failure if it is not able to get them on-board. The challenge is that all of the above publishers, because of their stature, have been reasonably successful in growing their own digital subscription offerings and now view it as part of their long-term vision and strategy. As a result, any partnership deal needs to factor in whether the relationship will cannibalize or grow the publisher’s core digital business. Facebook, in its outreach, has also needed to overcome skepticism as to whether the commitment is there and projected growth will materialize. Through that lens, the upfront licensing fees seem more like “good faith money” to get its priority list of publishers to invest attention and effort in integrating with its platform and supporting the relationship.
  • There is also the potential for partnerships and M&A with premium niche content players that have strong draw amongst slices of the aggregator’s audience – such as the likes of The Information, Stratechery, or The Athletic. The equation here for content owners is straightforward and purely economic – whether the increase in exposure to a much larger audience will result in a greater number of subscription conversions, net of any cannibalization. The WSJ, for instance, has placed a bet on participating in Apple News+ with the expectation of relatively low impact to its current subscriber base of professionals and corporate organizations, with the possibility of significant upside.
AI-powered personalization
  • Players like Flipboard have been doing personalization and social for some time, with reasonable success. This current generation, however, is inspired by the aggressive Chinese mobile-first upstarts – Toutiao and its successors – which have built up massive businesses serving up addictive content personalized using AI algorithms. The model is heavily focused on keeping the eyeballs on the screen for as long as possible 74 min per day, in the case of Toutiao, which is actually higher engagement than most social platforms. It uses every single tap, swipe, comment or other interaction to find more engaging personalized content. (In the interests of retaining eyeballs, Toutiao also removed the potential frictions of username/password, need to link to other social accounts, or asking the user to provide topics/interests.)
  • The content in the Chinese aggregator model is often tabloid-style news – e.g. celebrity gossip, lifestyle – and less focused on high-quality content. While AI personalization does not rule out quality content, the model requires a deep library to draw from (Toutiao has 1.2M+ publishers) and the smaller startups may also have less access to the marquee publishers. Local news – e.g. police blotters in the case of News Break – can be one source of personalized content, leveraging the phone’s location data.
  • The Chinese approach to AI-powered personalization has demonstrated its relevance even outside China, in markets like the US and India. In India, in particular, a growing slate of Chinese news aggregators (many backed by the big Chinese tech firms) are in the midst of a fierce battle for the country’s news market. Most of India’s own homegrown startups lack the AI know-how to compete, even in their home market.
The news business will not be winner-take-all. We will likely see varying degrees of success, as well as a number of failures. Google and Facebook, for instance, will always be major players in news aggregation. Given its proximity to their lucrative advertising businesses, we can expect them to continue to invest. Twitter’s Topics feature is a relatively modest offering integrated into its core experience, and seems likely to find adoption from users looking to follow their interests. LinkedIn’s approach of seeding news across its platform will probably help it meet its goal of increasing user engagement.
However, whether the “tab” approach of Facebook News and Snapchat will be successful is still an open question, one likely dependent on how well they can integrate these separate tabs into the core app experience. Eyeballs on one part of the app doesn’t necessarily translate directly into eyeballs elsewhere, as Facebook experienced with Facebook Watch. Similarly, Amazon’s News offering has the advantage of position on the Fire TV platform, but success will depend on how Amazon executes on the integration of News into the broader viewing experience. Apple News+ is off to a slow start in terms of marquee partnerships and publisher monetization – partly due to the economics of the all-you-can-eat model for publishers, partly because it’s not solving a big problem for consumers, and partly because of the execution on the in-app experience. It is reportedly going back to the drawing board so we can expect a pivot ahead.
Publishers that are trying to create their own news aggregators face an uphill battle. While the media giants like News Corp may have a sizeable audience to tap, they lack the deep pool of AI talent and infrastructure that is becoming table stakes in this next generation of aggregators. The size of their audience also pales in comparison to that of Google, Facebook and Toutiao. Furthermore, the audience that cares about high-quality content from a specific source (e.g. WSJ, CNN) may not carry over to aggregated news. While CNN has described journalism being its “bread and butter” as an advantage over a tech aggregator like Facebook, this may not be meaningful source of differentiation in news aggregation. Without deep AI/technology capabilities, it’s unlikely that the publisher-aggregators will be able to put forward a meaningfully differentiated experience. Even if they come up with net-new approaches, there is still the risk of the big tech firms borrowing their ideas and introducing similar elements.
These efforts by publishers to build their own aggregators highlight the challenges faced by publishers – particularly the small- to mid-sized ones – of how to survive and thrive in the AI-powered digital age. Publishers are trying to negotiate more advantageous terms with aggregators and exploring new ad models. They are also experimenting with alternative business models – e.g. The Financial Times’ new consulting business FT Strategies, subscription tiers from Quartz and TechCrunch, micro-subscriptions such as The Information’s Ticker, partnerships with startups like Scroll. The layoffs this year from once-hot digital news startups – BuzzFeed, AOL, Yahoo, HuffPost, Vice Media, and Vox Media, among others – are causing some to ask whether there is a viable business model for digital news.
Certainly the marquee publishers seem to have a workable business model with growing digital subscription offerings. The premium niche publishers like The Information appear to be thriving and profitable as well. The publishers in the middle, however – such as commodity and local news – are being squeezed. Recognition of this is one of the reasons why Facebook and Google are investing a total of $600M into local news (in addition to the reputation and relationship benefits). Many of the current aggregator models have the potential to inflict damage on the local news industry – by making their content harder to discover or enabling a system where lack of scale means not receiving compensation (e.g. not being among the “quarter of publishers” receiving licensing fees from Facebook). AI, however, has the potential to elevate local news among the audience that cares about it – e.g. News Break’s approach.
There does appear to be a growing recognition that the longstanding concerns of content publishers are well-grounded. Their reactions to Facebook News’ launch are telling and straightforward – they want to be compensated for the level of effort and investment required to produce content that consumers value. The recent emphasis by Facebook and Google on elevating original content, for instance, is a response to the complaint that original content is expensive to make and has to date been submerged over time by later articles that are summaries or rewrites. With Facebook’s willingness to provide upfront licensing fees to publishers, Google is facing pressure to follow as well.
Publishers have also been concerned about an increasingly forced dependency on distribution channels, including implications for access to audience data to inform strategies, ability to manage their brand experience and audience relationships, and cannibalization of subscription offerings. News Corp’s Knewz concept addresses this directly, showcasing a model whereby the aggregator shares data, sends traffic to publishers, and allows them to fully monetize their own content without taking an ad cut. While Knewz itself may not be workable without substantial AI investment or a consumer-platform partnership, it is highlighting there is still room here for a “publisher-friendly” aggregator. We’ll probably see continued experimentation and “frenemy” publishers banding together to generate leverage against aggregators.
There are a few tensions in play. First, there is the challenge of how a news aggregator can balance consumer engagement, publisher economics, and its own business model. Some have leaned far on the end of consumer engagement, creating wildly popular apps that require massive investment in advertising and are still losing money. Others like Knewz are “publisher-friendly” but it’s unclear how it will get consumer adoption or make money itself. Finally, a few like Apple News+ have put forward an approach that works for its own strategy but hasn’t been able to gain enthusiasm from consumers or publishers.
Aggregators also have to make the tradeoff between smaller quantities of high-quality content from bigger companies and enormous pools of content largely from blogs and individual creators. This is one of the most meaningful strategic choices, since it impacts whether investments should go to partnership deals or to AI talent and infrastructure. Furthermore, there is a tradeoff between maximizing traffic and minimizing misinformation. For instance, a feed that focuses on tabloid-style entertainment content or offers content only from one end of the political spectrum or otherwise limited set of sources might generate high traffic, but at the cost of informing the user with accuracy and breadth. Different geographic markets will vary in terms of their appetite or aversion for different kinds of news – for instance, in China, there’s more of a culture around individual content creators than established publications and those living in China don’t have the same expectations for factual news as in the US.
In the US, “reputable” reporting still carries weight – perhaps even more so than ever with the declining levels of trust in media. This may be one reason why marquee publishers like the Wall Street Journal can continue to grow their digital subscription businesses, while others struggle. This environment is likely one factor in the curation focus of Facebook, Apple, News Corp and CNN’s emerging services. However, even in the US, consumers still tend to feel comfortable in their own filter bubbles – 55% get their news from social media but 81% say inaccurate news on social media is a big problem.
There will continue to be a place for high-quality content. In a world where consumers are inundated with noise, demand will grow for content that can cut through the noise with accuracy and insight. For the foreseeable future, that content will require humans to perform that work. This is one of the areas where “content suppliers” will survive and thrive – in the realm of content quality – and why marquee publishers are gaining increasing leverage. Brand will still play a role as a marker of quality to the reader. 6Pages itself aims to operate in the realm of quality, with human analysts delivering on intensively cognitive work every week for our audience.
Disclosure: Amazon and Google are vendors of 6Pages.