THE BLOG

Why News Apps Should Stop Biting the Hands That Feed Them

20/10/2014 15:12 | Updated 20 December 2014

For years now, old media has been losing its audience, and with it, vital ad revenues that keep these titles afloat. According to the latest set of officially audited circulation figures, the overall daily newspaper market is shrinking by eight per cent every year. The Sunday market meanwhile, titles such as The Sunday Times and The Observer, is falling at a faster rate of nine per cent each year.

A recent report by The Media Briefing, mapped out how long it would take for the newspaper market to collapse at its current pace. Jumping just 60 months ahead, The Independent, The Guardian, the FT, and The Times are all, expected to cease to exist in a print format.

Digitally however, these titles live on. The likes of the Daily Mail, The Guardian and Telegraph titles have tripled their readership through their digital offering. As of May 2014, the Daily Mail gets an additional six million weekly readers via its website, and the Guardian and Observer, a hefty five million.

But, while there are more eyes on stories, the amount of cash these stories generate in terms of ad revenue, is getting smaller. Almost £400m in print advertising is forecast to be lost from the UK newspaper market by the end of 2014, with digital revenues only able to make up about 25 per cent of this decline, according to a new report by Group M.

That means that the room for stories such as The Sunday Times' piece of investigative journalism that revealed Qatar's alleged corruption over its Olympic bid, are likely to be fewer and farther between. While the decline has been ongoing for much of the 21st century, a more pernicious issue is how digital media companies are feeding on providers of quality content without supporting the original creators.

Pulse, now owned by business social network LinkedIn, uses the RSS feeds of newspapers to populate its news app that it farms out to its hundreds of millions of users, without sharing any profits it makes with the original creators. LinkedIn's second quarter profits, according to Forbes, was $534 million.

The same story applies for other apps including Circa, Yahoo's re-skinned Summly app Yahoo Digest, Inside and others. They take the feeds of newspapers and use them for commercial purposes without permission - or worse, re-write their copy and still stick the news publication's name on it.

Google News, arguably the world's biggest borrower of other people's content has long been at logger heads with the European Publishers Council over the proper licensing of quality content. For the consumer, free content is something they've become accustomed to. Tech blog GigaOm, went so far as to call the digital natives that grew up online, "Generation Mooch", for their reluctance to pay for content. Is there any thing publishers can do?

To try and stop the rot, publications such as The Times, and FT have erected paywalls to try and monetise their content at the point readers come into contact with it, and scrapped their RSS feeds. This approach cuts off a publication's nose to spite its face. Newspapers main source of income hasn't been through the asking price of its newspapers, but through ad revenues and a deep understanding of the people who read its publications. Cutting off the amount of people who look at your content means advertisers are less willing to stump up the cash to be carried by the title.

But there is a new generation of media startups that instead of cannibalising news companies, work in partnership on a more community focused footing. News Republic, a French company with offices in San Francisco, London, Paris and Madrid works in partnership with publishers including The Guardian, AP, Reuters and Al Jazeera, agreeing to share their content with its smartphone based audience.

Another company, Bullet News, which launches at TechCrunch's Disrupt conference today, also works alongside publishers. "So many news apps use feeds for commercial purposes without permission," explains Bullet News founder Julia Wurz. "We wanted to create a way for the smartphone generation to be able to indirectly support their favourite publications, without having to pay."

The app uses a revenue sharing deal with all the titles it partners with, who include AFP, Associated Press, Bloomberg, and The Guardian among others.

"If we keep stealing content from these quality publications, there isn't going to be anything left to steal in a few years time," continues Wurz, the former head of communications for the now defunct Formula 1 racing team, Benetton.

For the consumer, news apps represent a more effective way of staying abreast of current affairs across the world. But on the other side of the divide, these tech companies that provide consumers with the apps have a difficult question to answer: do you keep plundering other's resources in favour of electric growth, or help these ailing companies survive so that in future, there will still be content worth taking?