Media dinosaurs have the wrong scapegoat in Facebook

Newspapers

Anyone who reads this blog will know by now that I am no fan of Facebook. But I will defend them on this. The newspaper industry’s attempt to pin the blame of their woes on Facebook is wrong.

It is not only wrong. It is also telling of the myopia that has caused the media industry’s malaise.

Everyone gets disrupted eventually

The story of the digital era has been one of disruption. We all know that now. The rise of the internet has posed an existential threat to a wide variety of industries.

This is a time of great democratisation. Nothing has put power into the hands of the consumer more than the internet. Traditional business models are threatened.

We are deserting businesses that have been taking the mickey out of their customers for decades. We are flocking to products and services that meet our genuine needs, rather than the needs the traditional businesses want us to have.

Everyone gets disrupted eventually. It’s how you react to it that counts.

As each industry has faced the challenge of disruption, the savviest players have had to quickly adapt. The ones that didn’t adapt died, like Blockbuster Video.

The media industry has been particularly slow on the uptake. They are fully aware they are being disrupted. But instead of solving their problem, they have wasted effort by flapping around aimlessly, and pointing fingers erroneously.

The music industry changed to survive

In the late 1990s the music industry felt threatened by the rise of online filesharing. The music industry had become so lavish and bloated, the opportunity of the internet meant they were among the first to be found out. Consumers wasted no time turning to the likes of Napster, because they knew they didn’t need to spend £18 on a CD.

At first, the reaction from most of the music industry was aggressive. But after a few years, they worked out that this approach boiled down to treating their target audiences as criminals. If you are hostile towards your market, you won’t have a market for long.

Fast forward to 2018, and music is as dominant in our culture as it ever has been. Through it all, the music industry has not only survived, but flourished.

The solution for the music industry was to find ways to embrace new technology and develop new business models. At first it was by enabling people to buy MP3s legally through services like iTunes. Today it’s through on-demand streaming via services like Spotify.

In parallel, music companies placed a bigger focus on the experience of their consumers. This meant putting more emphasis on live events, better merchandise, and even finding ways of making physical music formats more appealing through limited edition releases, lavishly packaged reissues, 180 gram vinyl and so on.

In short, the music industry went back to thinking about what their product was all about. They thought about how to better serve their users, and they began to innovate.

People hated the music industry. But they love the music. The product is fundamentally good, so the industry thrives — despite the huge disruption of the past 20 years.

Do people love the newspaper industry?

Put like that, the newspaper industry has a huge problem. Because there is very little evidence that people actually like the product that the newspaper industry offers.

Media analyst Thomas Baekdal produced a telling graph that shows how newspaper market share in the UK and the US has been sliding — not since the advent of the web, but since the 1950s. Back then, UK households bought on average 2.2 Sunday newspapers a week. Today, only 40% purchase a newspaper.

What’s notable is how steady that decline has been. There was a steep drop in the 1950s as TV usage grew. But since then, the decline of newspapers has steady for the past 50 years.

If newspapers are to be believed that the web is the cause of their struggles, how do they explain the huge decline in sales that took place before the advent of the web?

We didn’t buy newspapers for news

The harsh truth is that people never really bought newspapers for the news, at least the way we talk about news today. Sure, people bought papers to find out about the world and to consume information, of which news was a part.

But the local newspapers that are struggling so much now were never really about news. It was just that newspapers were the most efficient way of distributing information, whoever you were.

If you wanted to buy a house or a car, you would buy the local paper to see what was on the market. If you wanted to tell the world about a birth, marriage or death, you did it through the paper. If you wanted to advertise your business, you did it through the paper (among other channels).

More cynically, local newspapers relied a lot on featuring photos of school children a lot, to ensure that parents and other loved ones would buy a copy to see their little cherub in print.

People didn’t turn to newspapers for the news. They turned to newspapers because they had the most effective means to distribute information.

As communications developed throughout the 20th century, more efficient distribution methods began to replace newspapers. TV and radio became more dominant and more effective at delivering the news. Telephones gave people and businesses a more efficient way to contact each other.

So newspapers were already becoming less important. Then the internet came along, and it effectively replaced classified listings. By this time, newspapers had very little in the way of a unique selling point left.

For certain media figures to be obsessing over the role of Facebook in all this to colossally miss the point.

Facebook isn’t a news company

The core problem is that elements of the newspaper industry see Facebook as a news company that has aggressively moved into its space. They think that Facebook’s claim that it is not a news publisher is disingenuous.

The problem with this is that Facebook is not a news company. It really isn’t.

Facebook recently announced that news posts would make up just 4% of people’s news feed in future. It used to be 5%.

Certain media organisations have reacted with mirth to the suggestion that news content makes up so little of people’s Facebook experience. But independent analysis certainly suggests that news content makes up much less of the average news feed than many in the media assume.

A Nieman Lab experiment suggested half of people see no news at all in the first 10 posts when they log in to Facebook. A quarter see only one news item.

They said, “Only 4% of the news posts in our sample came directly from publishers.” This is despite using a generous definition of news:

In this experiment, “news” wasn’t just the latest Trump story. It encompassed everything from Facebook-only town-specific news and information pages, to pages dedicated to news about a specific MTV show, to lifestyle stories, to sports scores, to op-ed and analysis pieces responding to news events. Fact-checking posts from Snopes or PolitiFact counted as news. So did a Vox video from 2016 on supersonic flight that someone was re-recirculating; so did a timely iPhone X product review.

Perhaps more importantly, people simply don’t think of Facebook as a news website. Whatever people are using Facebook for, you can be sure it’s not to get the news.

In the latest Edelman Trust Barometer, only 24% of people said they trust social media when looking for news and information. This is not a post-Trump phenomenon. In 2012, only 28% truted social media. So people have never really trusted social media as a source of news.

People are using Facebook heavily, and Facebook are making a lot of money through ad revenue as a result. But it certainly isn’t because they are using it as a replacement news website.

You could generously say that people use Facebook to keep updated with their friends and family. Perhaps more likely, they’re using Facebook to post something about themselves. But most of all, people use Facebook to waste 5 minutes when they’re bored at work or sitting on the loo (as they say, “garbage in, garbage out”).

If media companies think Facebook has stolen their thunder, this is a pretty low aspiration.

Media companies are not entitled to advertising income

Most infuriatingly of all, when traditional media people complain about Facebook or Google, what they are saying is, “they took all our ad revenue”, as if newspapers are entitled to have masses of adverting income.

The editorial director of the Sunday Times, Eleanor Mills, typified this stance in a recent appearance on BBC Radio 4’s Media Show.

To give you an example from the Sunday Times, it costs about two to three times the cover price to actually produce the newspaper. Of course in the past that was met by advertising, and there was a lot of money sloshing around. It’s now really not like that. Newspaper advertising is going down 20% a year, let’s say. And all the money — there’s huge amounts of money being made from digital advertising, but it’s all going to Google and Facebook because of the algorithms they have and the way they can target consumers.

What she never got round to explaning was why a newspaper company had never come up with a a digital business model that was remotely as good as anything Google or Facebook could come up with. They could have done. After all, they had all that “money sloshing around”, when Google and Facebook were being set up from a garage and a bedroom.

Later in the programme, Eleanor Mills bemoaned the fact that digital adverts could be displayed next to “Isis recruitment videos or horse porn”. If it’s so bad, you might well ask why advertisers have been flocking to Google and Facebook, and away from newspapers.

The answer — apart from vague insinuations about algorithms — was never provided. If media figures spent half as much time figuring that out instead of pointing the finger, they would probably be in much better shape.

Media failed to learn the lessons from the music industry

The media industry, like the music industry, began to believe that it was entitled to have “money sloshing around”. When the internet changed that, the newspaper industry was totally unprepared.

The music industry took a step back and figured out how it could best meet the core needs of its target audiences with new technologies. With a few noble exceptions, newspapers have not demonstrated any such introspection.

Instead, newspapers have lowered their quality. In terms of content, they have generate endless amounts of churnalism, clickbait in the hope that volume alone would save the day. Newspapers have assaulted their own websites with offensive amounts of reader-hostile advertising and trackers.

When the music industry decided to treat its users more kindly, newspapers have decided to treat their users like idiots whose only real use is to be tricked into clicking an ad.

It’s no wonder newspapers are struggling.

The media doesn’t have the right to advertising income

As businesses, it is Google’s and Facebook’s right to innovate with new business models. They don’t owe newspapers anything.

And when newspapers look at the decline in ad revenue, and accuse Facebook and Google of unfairly encroaching on that, they are implying that they are entitled to a proportion of ad revenue. But advertisers — just like readers and users — are bound to go wherever is most effective to them.

In past decades, newspapers did not (as far as I know) call to be given a proportion of billboard ad revenue, or to be paid by the people advertising on TV or radio, or for a reduction in the number of flyers in shop windows. It is absurd now to look at a successful advertising model and stomp your feet about it as if you are entitled to money.

If newspapers focused on creating a good product instead of engaging in a race to the bottom by churning out low-quality clickbait and then blaming others when it all went wrong, they would be in a much better state of health.

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