"The overall digital news situation resembles a digital content bubble where most providers continue to operate at a loss," argues the latest report from the Reuters Institute for the Study of Journalism (RISJ). So how can digital-born media outlets prevent it from bursting, especially as they seek to expand internationally by relying mainly on scale and advertising?
Published today (6 December), 'The global expansion of digital-born news media' analyses the basic business, distribution and editorial strategies of seven internationally oriented digital news organisations: Brut, Business Insider, De Correspondent, HuffPost, Mashable, Quartz and Vice.
The authors of the paper, RISJ director of research Rasmus Klein Nielsen, research fellow Tom Nicholls, and freelance journalist Nabeelah Shabbir, interviewed senior editors and executives of the seven publications to identify some of their strengths and weaknesses as they tackle international expansions, and how these challenges compare to those of domestic digital players and legacy brands.
Whether they originated in the US or abroad, the seven organisations included in the study are pursuing an international expansion strategy the authors called a "US-plus model", targeting the US and one or more additional markets in order to "grow their business and sustain their journalism".
Most of these outlets, excluding membership-driven De Correspondent, are primarily based on advertising, and rely heavily on search and social media to grow their audiences – a "recipe of growth-first-profits-later".
This business model and distribution strategy have "underpinned the expansion of internationally oriented digital-born news media and helped them reach wide audiences", the authors wrote, but they still face similar challenges to legacy outlets centered on advertising, such as the rise of programmatic advertising, the dominance of technology companies, and the growing use of ad-blockers.
"In contrast to the newspaper industry, where more and more titles are developing pay models, and in contrast to domestically oriented digital-born news media, where some are trying subscription models and others membership models, very few internationally oriented digital-born news media pursue pay models," the report explains.
The organisations included in the study have taken different approaches to expansion, with some focusing on licensing and partnerships with legacy media in their target countries. While these models could be an advantage in terms of speed, additional capital and local expertise, they could also backfire or slow down the process if the partners have different goals, if their intentions are not transparent, or if they have to give up control over what they publish.
The authors also found the editorial strategy of the seven outlets and how they choose to portray their brand identity are often challenged by a desire to maintain a consistent voice across the countries they are present in, while also standing out and translating their success in each region. The publishers interviewed all saw themselves as niche in the sense of wanting to cover specific topics and reach specific communities, as opposed to wanting to have "scale simply for the sake of scale".
"The low trust in many established media presents an opportunity for digital-born news media to stand out, and standing out is about more than content – it is also about audience engagement, covering uncovered topics, and building relations with specific communities," Nielsen, Nicholls and Shabbir wrote.
Another challenge to having a global presence highlighted by the interviewees was coordinating resources and teams across countries, a process that can vary depending on whether a publication aims to work as a 24-hour news team or as a group of local editions.
As a solution, publishers have aimed to use technology to their advantage by developing in-house tools for automated discovery of content, such as Mashable's Velocity tool, as well as automated curation and translation, like Vice's integration of Google Translate with their CMS. However, even though translation has been useful, those interviewed agreed that the best approach is adapting the content for the needs and backgrounds of audiences in each country.
While the digital publications that are seeking international expansion have had a strategy and investment in place that has allowed them to pursue first the scale and then the profits, that may no longer be the case, as shown by Mashable's recent sale and in BuzzFeed laying off 100 employees after missing its revenue goals.
Digital-born, internationally-oriented outlets are thus facing many of the same challenges experienced by everyone else in the industry, the authors concluded: having to evolve and diversify not just their editorial and distribution approach, but also to find sustainable and profitable business models.
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