A Platform Future for Publishing

There are two clear paths ahead of us: Submit to the platforms to survive, or innovate and thrive.

It is spring 2016 in San Francisco. It is the best of times. We are first row at F8, Facebook’s own show-off tech conference, gathering some of the best and brightest digital minds, developers and partners. This year’s very special guests: carefully selected publishers from around the world to feed the beast that drives engagement. On stage, 32 year-old Mark Zuckerberg is on a mission, with ambitions to make the world a better place. The impressive way his company is turning it into tangible reality is indeed inspiring for millions, if not billions, of people. Mark Zuckerberg is not only innovating on the Internet, he is the Internet.

In Munich, it is gray and cold. It is the worst of times. We are at DLD, a European tech conference. In stark contrast to F8, it feels less like a conference about innovation and future opportunities, and more like a victim therapy session for “Old Europe.”  The air is filled with panic and reeks of fear, with most panelists crying for regulation and competitive government protection, rather than focusing on competing through innovation. The publishing industry is hardly present, they are busy at home cutting costs. The concerned industry executives on stage are from transportation, energy, banks, healthcare, retail; because the US tech giants are not merely controlling the Internet — they are eating the world, the cities and the economy.

Pause the film: Amidst exciting and pioneering plans such as Artificial Intelligence (AI) powered services, using unmanned airplanes to deliver the Internet for “the next 3 billion,” and rolling out Virtual Reality to the masses, Facebook is also putting energy into the far less sexy endeavor of improving the news portion of its core service, the News Feed, for its 1.6 billion users. New initiatives, products, features, and capabilities such as Instant Articles, Facebook Paper, Save to Facebook, and news bots are all aimed at improving the value for and engagement of its users. Despite the best of intentions, Facebook’s activity within news is also producing some unintended consequences: One is undercutting the funding of independent journalism by taking over the lion’s share of newspapers’ historic advertising revenues. Another is even more significant: Facebook may soon become the newspaper of choice for most people in most markets — all without contributing to the production of a single piece of content or acknowledging editorial accountability.

Cut to the helicopter shot: Software is eating the world, and information is transforming it. 60+ years into the Information & Communications Revolution, we have reached what London School of Economics Professor Carlota Perez calls the “deployment stage” of the 5th technology revolutionwhere the benefits (and disruptions) of information technology are finally starting to affect society at large, transforming every industry, every job, and every person’s daily life.

As a traditional bellwether for many industries, the media is feeling impact of this change most urgently, as independent journalism is hit by the disruptive changes in consumer preferences: Habits and needs of readers and citizens have completely changed — going from print to digital, generic to personalized, and from info scarcity to abundance and overload.

The result is that dissatisfied readers are mostly unwilling to pay much, if anything, for subscriptions to yesterday’s news products, and when combined with the perfect storm of platform companies commandeering publishers’ advertising revenues, the result is disruption and upheaval. Value chains and business models of publishers must be reconstructed, jobs of journalists and editors must be re-examined, the publishing product must be re-invented, and the role of independent journalism as a pillar of free society must be reaffirmed. In sum, publishing is increasingly marginalized, with lower revenues to produce journalism, and with the distribution, monetization and the very interface with readers increasingly being controlled by platforms.

So publishers are facing a very hard choice: surrender, or innovate and compete.

So why are the platform giants so interested in the future of publishing?

To properly answer this question, we need to look back at publishing after World War II. It was indeed the best of times for 60 years, with readership and revenue growth.  Publishers were able to do something that now seems impossible, making record profits while also providing a service whose reach engaged and informed the entire population, whose product protected free speech and facilitated open democratic discourse, and whose independence and integrity held powers-that-be accountable. Brands were top-of-mind in any market, and the owners were among the most respected and recognized figures in society — all because news publishing concerned and engaged us all.

As we know, this era came to an end about 10 years ago and has been followed by a rapid decline — first in print, and then also through a perfect storm in digital with emerging platforms becoming substitute news providers. As legacy media predominantly focused its attention on “classical” business levers rather than trying to innovate and compete, becoming masters of cost control, Silicon Valley revealed its appetite for entering the news services category: news aggregation, newsfeeds, Google AMP, Facebook IA, Google Reader, Facebook Paper, and more recently, bots.

But why?

Why do Silicon Valley tech companies all of a sudden not only want to work with publishing content, but also become the distributors and providers of choice for consumers?

At first blush, the answer seems easy— it’s all about taking over the lion’s share of publishers’ advertising revenues as these revenues increasingly migrate online. And this is true; from a business perspective, there is no doubt that this is the end goal for the internet giants. After all, more than subscription- or transaction-based revenue models, advertising is still the undisputed “killer” business model online. News and classified advertising represent both high-volume and high-quality inventory that is essential for the likes of Google and Facebook to be able to monetize their user bases.

However, from a perspective — one focused on building a long-term, top-of-mind, sustainably loyal relationship with its users, and using this foundation to continue growing users and expanding an ecosystem of innovative services on top of its platform — the platform giants’ foray into news services is motivated by a profound .

Why is that? Because engagement — the active and extensive usage of a platform — is both and to the success of any platform. Engagement, when measured in time spent online, is naturally finite for each user. The number of minutes spent on one site means less time available to spend on another site, or reading a newspaper, or watching TV. It’s a zero-sum game, and hence a fierce battleground for supremacy between the different platform ecosystems. The reason the battle is fierce is because engagement is essential to monetization, service innovation and user retention: The more time users spend on a site, the more ads can be shown to them (monetization), and the more their data is captured to improve and identify new services; and the more time and services a user consumes on a given platform, the more likely she is to continue using the platform in future.

But how does this battle of engagement connect to news publishing? Let’s assume that people engage with the things that address their underlying needs. In a modern world, our basic human needs generally fall in three categories: the human, the citizen, and the everyday being:

  • The Human need is the manifestation of the fact that humans, at our core, are social beings. We seek and need contact with other human beings, and we cherish extensive and rich communication and interaction with others.
  • The Citizen need is a reflection of those things that make us more than a mere beast. Our thirst for enlightenment in the form of knowledge and insight, as well as the practical need for being informed of the world around us that affects our lives.
  • The Everyday Person represents our daily need to accomplish routine household tasks in our lives — small jobs, repairs, the purchase of products and services — and to be entertained. A large part of the Internet economy is all about addressing our everyday needs in more convenient, faster or cheaper ways.

As seen in this model, news publishing represents one of the most essential pillars of human need and engagement — which is why news publishing has been so central to society in the print era, as well as one of the most important engagement platforms in the digital era. Engagement, in the form of the frequent consumer usage of a platform that news media represents, is the real motivation behind platforms’ interest in news publishing.

Why platforms and ecosystems are changing the game 

While our needs as human beings — including our need to be informed citizens — are constant, over the past 10 years some technology and product innovations have fundamentally changed the world and the everyday context in which we humans operate. The emergence of smart devices, an explosion in sensors (from GPS to audio/video/photo recording to health monitors), and cloud computing making all services and data sharable and available across devices anywhere and anytime, has resulted in each of us being tethered to a 24/7 life recorder. This convergence has of course created new problems in the form of information overload.

Thankfully, along with these problems have come new remedies in the form of a revolution of data and advanced analytics/artificial intelligence (a.k.a. “Big Data”), as well as the linkage of this data to individual identity (logged-in across devices). This has created a whole new personalized product solution space aimed at addressing our human needs and helping us accomplish our “consumer jobs.” The solution is tailored by personalized filters (“algorithms”) that factor in who you are, where you are, and what you want.

Now let’s apply all this theory to publishing — let’s start with the reader perspective, historically an overlooked area within publishing, and consider the impact that the information revolution has had on us all, best illustrated by the research of the University of Southern California’s Dr. Martin Hilbert: In the middle ages, the average European citizen would be lucky to read the equivalent of one book (the Bible, naturally) in a lifetime, and even 100 years ago that number had only increased to about 50 books; today that trickle has grown to a tsunami of 15,000 newspaper pages !  As content creators and contributors, we have gone from creating 2.5 pages a day just 30 years ago to almost 500 pages today — a 200-fold increase.

What is my point? That at the genesis of the World Wide Web in 1993, the role of publishing was what it had always been: to carry out its noble mission of societal enlightenment and authority accountability as the gatekeepers of scarce news content — information, insights and analysis about the world around us. Simply put, publishers were entrusted with the power to decide the and the : to dedicate content creation resources (journalists) to and thus which news events to report on, and to cover the content they chose to include — and what to leave out. The differentiator is what defined great journalism, powerful writing and distinctive storytelling.

Fast-forward 22 years, and it is indeed a world turned on its head. Along with the smart device and sensor explosion, we have information overload. News content is everywhere, and the majority of such content is neither exclusive in source or distribution. What is still scarce and sorely lacking is order amidst the chaos.

The solution is found in personalization and automation. If you look at any online service that’s enjoyed any modicum of success in recent years, it’s been characterized by being always logged-in and cross-device — tailored, friction-free and time-saving due to end-to-end streamlining and automation. These are the characteristics of any “unicorn” service, be it single-product offerings such as Uber, AirBnB, Spotify, or Klarna, and in particular platform ecosystems such as Google and Facebook.

Personalization is a self-reinforcing game that heavily favors platform giants and their logged-in ecosystems, for the simple reason that both personalization and data collection require lots of data about each user. Thus platform ecosystems are focused primarily on collecting data about a user across devices (only possible if a user is logged in) and using this data to build rich user profiles, which in turn makes it possible to offer deep personalization and effective automation. Nobody currently captures more data, or invests more resources in turning this data into valuable personalization and automation, than Google and Facebook.

Why is this new solution paradigm good for the user?

Simply put, because it solves their problems, helps them do their jobs, and perform their tasks. In today’s world, this solution paradigm makes everyday life easier. And users flock to those who offer the best personalization and automation.

Why publishers are losing to platforms and, why it matters

Publishers sit on one of the most valuable engagement pillars of the Internet, have large volumes of premium advertising inventory, and have potential access to great data about their readers — data that in many respects is as good as the data Facebook and Google sit on. This is the key to create personalized services and sustainable business models: The more data you have about a user, the easier to fine-tune and improve existing services to increase their usage (and data), and the easier it is to detect trends and patterns that can be used to innovate and launch new services (…to then generate even more data about users). Logged-in users also create the opportunity to become a foundational platform for an entire ecosystem of users and businesses to build on, launch and interact. This dynamic, with a core of user data facilitating user engagement and growth, is a new type of winner-take-all scenario that risks having a few players controlling not only part of the value chain, but the entire environment — the Internet.

Look closely at what both Facebook and Google are doing, buying and building, and you’ll see that they are aiming straight for the heart of publishers’ business, building ecosystems based on an engagement strategy of publishing combined with intent data. Facebook is evolving its Newsfeed from a pure friends feed to an increasingly curated news service (high engagement) while rolling out Facebook group-based Local Marketplaces (rich in valuable intent data) in their app, and combining these with the most powerful social graph and audience-targeting machine in the world.

Google comes from the position of owning extremely powerful intent data through search, and right now is making publishers a very compelling offer of access to their platform’s news content and user engagement. Their strategy is the same as Facebook’s, to leverage premium publishing inventory with user intent data, and their goal is clear: to win the user engagement battle and capture the lion’s share of advertising revenue.

Let’s pause for a minute: If the tech giants are replicating publishers’ core domains, of which they have little specialist or locally relevant knowledge, it triggers an observation and a question.

The observation is: If publishers are sitting on one of the Internet’s most valuable and vibrant engagement platforms, with valuable user intent data, it means that we are sitting on a great unfulfilled potential to build ecosystems ourselves. Picture a Norwegian or Swedish ecosystem, where you log in once and get easy access to all quality content and journalistic stories from sources you trust, where the data you share is used transparently to create better services for you, and is protected in a way you can control. Imagine if we, together, could use our combined positions and local knowledge, enhanced with a step up in new digital disciplines such as data science and analytics, software engineering, and product design, to create better local ecosystems, with better services for people and society, than the Silicon Valley tech giants.

The question is: Given this analysis, given the battle for engagement, given that the paradigm shift towards logged-in engagement ecosystems has been going on since the iPhone launched in 2007, why aren’t news publishers responding forcefully, using their position of strength to unite, innovate, compete and win the battle of platform-based ecosystems?

The short answer is: Because publishers don’t actually capture data about their users, and as a consequence don’t really know them. Therefore publishers are unable to meet today’s user needs around personalization, or even use their data to enhance the value of their advertising solutions.

That’s the short answer. To properly answer this question, it’s worth taking an honest look at our starting point as well as our motivation.

Our starting point as publishers is that legacy media is not only being disrupted, but nearing outright extinction: On the news product side, consumers have moved from print to mobile, where their needs are not met by today’s legacy news products, and they are therefore increasingly consuming news off-platform. On the business side, consumers’ willingness to pay is at best a mere fraction of traditional print subscription prices, at the same time that platform companies are chipping away at the advertising revenue that publishers increasingly just to survive. The end result is that the majority of news consumption is taking place away from domains controlled by a content producing editor.

Platform companies are winning, and this is — regardless of their best intentions — an undeniably bad thing. We see it in the democratic process in the US, where over 60% of American citizens cite Facebook as their primary news source — and that is before the machine is even fully up and running. You see it in the way that Facebook uses its algorithms to control what you see, filtering out art (nudity) but allowing hate speech, all while taking down news pages under pressure from political regimes like Turkey. Still, they claim “we have no role” when confronted with editorial accountability or their responsibility as a de-facto publisher.

So let’s just imagine for a moment what will happen when a handful of global platforms get to exclusively decide what information we see, control what kind of journalism is promoted, and dictate the economic terms of funding independent journalism — all without caring about or investing resources into producing any journalistic content of their own.

Why does this actually matter for you and me? What is our motivation for preventing the tech giant platforms from winning?

Because a few global platforms from the US and China taking control of the creation, economics, and consumption of news will be bad for innovation, journalism, readers, and, ultimately, society.

It will be bad for innovation, since the platform giants are not focused on innovation in journalism per se; and since they already control the interface to the users, they effectively make it impossible for publishers to innovate around news services.

It will be bad for journalism, because a journalist or publisher is no longer free and independent when someone else is dictating reader access and journalistic formats, and completely controls your economic means. You lose responsibility, you lose independence, and you lose authority and credibility.

It will be bad for readers, as it will not be transparent what they get to see or why they see it; as potential beneficiaries of innovation, they lose out; as participants in a democracy, they risk being uninformed “filter bubble” casualties.

Most importantly, it will be bad for society. Any democratic society needs a free and independent press to hold authorities accountable, to uncover abuses of power, and to ensure that citizens are informed, engaged and empowered to participate in the democratic process.

Two options: surrender or innovate

Platforms are changing the game, and they are coming for publishers’ readers and advertising revenue, which is bad news all around. And yet, we as publishers still posses unique expertise, valuable positions and unique local knowledge that together can create new opportunities.

As I write this, publishers around the world are considering their options.

We can surrender. We can say that the platform battle is over, declare Google, Facebook and Apple winners and join one or multiple of these and try to make the best out of the situation. The problem is that while the New York Times and Washington Post (or Buzzfeed for that matter) might be able to scale English-language journalism globally via distributed publishing, very few other local markets and languages can scale. Certainly not the Nordic languages, and not even the large European languages such as French, German or Italian. Even forgetting such concerns as editorial independence, transparency, integrity, or ability to innovate — the core advertising monetization model is broken, and it’s hard to see how we can fund a critical mass of independent editorial teams of competent journalists.

Alternatively, rather than surrender, we can imagine…

Imagine an ecosystem that is not Google/Facebook.
Imagine that a critical mass of quality content is available in a premium journalistic ecosystem.
Imagine that our data is incredibly valuable for monetization and for developing a personalized, trust-based relationship with the user that can then be used for the development of more innovative services, taking advantage of the fact that publishing is one of the most engaging activities in our lives.

Imagine if we assumed responsibility for our own destiny: Complemented our strengths as publishers with investments in tech and product to take control over user data and user interfaces, to innovate, improve and deliver tailored, user-friendly, content-rich and expressive editorial and advertising experiences, which in turn ensure happy, loyal users and advertisers willing to spend time and money with us.

This imagined path represents an alternative digital future for publishing driven by innovation, redefining what news services are in a digital age, serving society and its citizens, and generating the kinds of profitable revenues necessary to ensure long-term sustainable independent journalism.

A possible digital publishing future – an alternative mission and ecosystem

Allow me to go one step further and share a possible publishing mission. A mission that could become a future path for digital publishing and journalism that is not beholden to the editorial and commercial mercy of California-based tech companies.

This mission, a redefined reason for publishing’s existence (and one that Schibsted believes in) is “to build the foundations of a functioning democracyby closing the gap between what people already know and what they should and/or want to know — so that people are empowered to make informed decisions about their personal life, community, society and governments.

In order to realize such a mission, our publishing vision (or ambition) must succeed in transparently and intelligently connecting and engaging people with credible and relevant information at the right time and place, through adaptive, highly granular, rich storytelling.

At first blush, a critical reader may argue that this may sound like the timeless and noble mission that has always defined publishing around the world, that continues to set publishers apart from the pure technology-driven companies. However, when matched with today’s altered reader habits and needs (individual filtering, balanced selection and synthesis, insight and understanding) in a highly complex, information-overloaded, multi-device, always-connected world, this mission changes publishing’s

– competence to place new disciplines and expertise in the form of sophisticated technology coupled with rich data and advanced analytics, at the very heart of the.newsroom;
– way of working to become data-based and user-centric; and
– products to become 1:1 (logged-in) rather than broadcast in news curation, user-centric rather than content-centric in news presentation, and two-way social and engaging.

The platform companies are being so successful in their quest to become primary interfaces for news consumption precisely because they have the competence that publishers sorely lack. Their platforms and way of working are iterative, data-based and user-centric, and their products are highly personalized.

For us to succeed, we must therefore embrace these changes and match the capabilities of the platform companies.

And as a pre-requisite and original motivation for it all — we must start to know our users by taking control of our data and user interfaces. As Schibsted’s Adam Kinney discusses in more detail in his article “We Need a Data Revolution,” we must start to individually identify and capture data about our users over time and across devices (through log-in) and translate this data into deep knowledge about our users. And then use this knowledge to shine a user-centric light on everything we do — as journalists, as editors, as product developers, as entrepreneurs.

What we must do: Create a next- generation publishing service

Taking control of our data and user interfaces and stepping up in the core domains of global tech companies gives us the right to play in the battle for user engagement and news consumption.

But can we compete, differentiate and win? Absolutely! We publishers have unique advantages that we must use to innovate and deliver a superior news experience. This includes editorial accountability through full transparency on how algorithms work regarding users, unrivaled curation expertise to yield superior algorithms, and deep content creation.

Based on these advantages, and combined with great data and technology, we at Schibsted have found it easy to imagine future news services in the form of an intelligent personal digital editor…

  • …that draws on a content pool of thousands stories to offer complete, yet highly filtered, news coverage to close the gap between what you know and need to know,
  • …that adapts the storytelling to each user, going below the article level and personalizing the content atoms and visuals of a story,
  • …that is transparent about why and how content is selected to each user, and who can be trusted to provide a balanced view of the world,
  • …that delivers a seamless experience across all devices,
  • …that engages users in tailored discussions around content,
  • …and that links content with reader action — “actionable journalism” — for people to take action as engaged citizens based on what they read and learn

As Schibsted’s Espen Sundve further discusses in his article “Next-Generation Publishing Products,” these imaginations are opportunities publishers have to reimagine publishing products that no Silicon Valley tech company can match.  It requires that publishers have the will individually to change their competence, way of working, and products.

At an industry level, it requires that publishers come together in an ecosystem, pooling data about content and users, supported by a platform ecosystem business model that ensures the friction-free flow of content and data across all. To beat the platforms, we must ourselves be a platform — to provide the technical glue and the brains for login, data analytics, personalization and advanced publishing functionality needed for optimal flow of pooled content and competitive ad targeting. No individual media company in any market — be it Germany or Spain, France or the United States, India or Brazil — is big enough to do this alone. Not even Schibsted in our unusually strong markets of Norway and Sweden.

Is this all difficult to achieve? Of course it’s difficult, particularly for an industry not accustomed to collaboration, nor used to moving with urgency and agility. But we have the choice as an industry, to either imagine and explore a future together, or risk not being a part of a future at all.
We believe we have a purpose to fulfill, something worth fighting for — maybe now more than ever.

So if we are even close to be in position to make that difference – how could we not do our very best to try? Just imagine…

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