- Category: Analysis
- Published on Friday, 20 April 2012 10:58
- Written by Press Release
UNITED KINGDOM--(ENEWSPF)--20 April 2012. The first report to systematically assess how online-only news websites across Western Europe are faring has found that new start-ups are struggling to find business models that can cover their operating costs. It suggests that the funding environment is more challenging for new start-ups than for traditional media outlets that also have online content, because the latters’ operations can be subsidised by revenues from offline businesses. The report, published by the Reuters Institute for the Study of Journalism (RISJ) at the University of Oxford, finds that although internet use and online advertising is growing fast across Europe, and there is much experimentation in the online news space, the stumbling block continues to be the absence of a viable business models for new forms of journalism. Even the most innovative online enterprises in Europe have found it difficult to break even.
The report, ‘Survival is Success’, is based on in-depth analysis of nine case studies from Germany, France, and Italy—including prominent pure players like Netzeitung, Mediapart, and Lettera43.The study shows that the start-up scene in Europe is still at a stage where surviving for more than a few years is a form of success in itself.Out of nine new start-ups analysed across the three countries, only two, Mediapart and Perlentaucher, broke even. Mediapart (in France) is sustained by a pay-wall system around quality niche content, while Perlentaucher (from Germany) survives by combining very limited costs with a highly diversified business model. One of the nine other sites has already closed after years of losses, and another has been acquired by a news magazine. The remainder have considerable operating losses and survive solely on support from external investors.
The report suggests there are two main challenges for online-only news sites: firstly, the market for online news continues to be dominated by legacy media organisations like newspapers and broadcasters; secondly, the market for online advertising is dominated by a few very large players like Google, which undermines the ability of small and medium-size players to generate significant revenues.
Report author Dr Rasmus Kleis Nielsen, from the RISJ at the University of Oxford, said: ‘It is a well known fact that newspapers and some broadcasters are finding it difficult to adjust to the new media environment. What is perhaps more surprising is that new media enterprises are finding it just as hard, if not harder, to survive. Many start-ups are inspiring in their journalistic idealism and impressive in their technical ingenuity, but they are struggling to find a business model that allows them to break even. Finding functional funding models is crucial for the future of online journalism. Otherwise, we will continue to rely on the often-declining “old media” to provide professional journalistic coverage. The current wave of journalistic entrepreneurship needs to be matched with a wave of innovation in the business of journalism.’
Report author Nicola Bruno, journalist at the Italian media cooperative Efficinque, said: ’European journalistic start-ups need to look for inspiration beyond well-known American examples like The Huffington Post, or Politico. Although these models may work in a very large media market like the US, they won’t necessarily work in smaller markets in Europe. Even in France, a country that has witnessed a veritable explosion of new online ventures in recent years, most online only news websites are struggling and need to find diverse sources of revenue.
’The report suggests that in order to survive, online-only news websites need to avoid head-on competition with news websites backed by old media that often have stronger brands and more content to offer. It suggests that they should make themselves distinctive and tailor their product to their environment and stop imitating sites that succeed in very different contexts like the US. It points out that Mediapart, the French news website, succeeds in part because it offers hard-hitting investigative news, a form of journalism not commonly found in France.
- The full 112-page report will be made available online Friday April 20 on the Reuters Institute website: http://reutersinstitute.politics.ox.ac.uk/publications
- The RISJ Challenge ‘Survival is Success: journalistic online start-ups in Western Europe’ is by the Italian journalist Nicola Bruno and RISJ Research Fellow, Dr Rasmus Kleis Nielsen. The study is based on interviews with key people from the start-ups examined and a range of additional industry data sources on online advertising and web traffic.
- The report is being presented at the International Online Journalism Symposium at the University of Texas-Austin, a cutting-edge conference bringing together top journalists, technologists, and academics to discuss the future of the media industry. It includes speakers from Google, the Wall Street Journal, and other media companies from around the world. It will be made available for download simultaneously on the RISJ website:http://reutersinstitute.politics.ox.ac.uk/home.html
- Reuters Institute for the Study of Journalism
The Thomson Reuters Foundation is the core funder of the RISJ Institute, based in the Department of Politics and International Relations. The Institute was launched in November 2006 and developed from the Reuters Fellowship Programme, established at Oxford 28 years ago. The Institute, an international research centre in the comparative study of journalism, aims to be global in its perspective and provides a leading forum for scholars from a wide range of disciplines to engage with journalists from around the world. See http://reutersinstitute.politics.ox.ac.uk/
- Dr Rasmus Kleis Nielsen is a post doctoral research fellow carrying out cross-national comparative research on the business of journalism and its role in democracy. He co-edited The Changing Business of Journalism and its Implications for Democracy with RISJ Director Dr David Levy, which came out in 2010. He has published widely on journalism, political communication and digital politics.
- Nicola Bruno is a journalist, co-founder of Effecinque and a former fellow at the Reuters Institute for the Study of Journalism (2010–11). He has written about digital culture and media issues for, amongst others, Corriere della Sera, D-La Repubblica, and Sky.it since 2001. His book on ‘post-journalism’, La Scimmia che Vinse il Pulitzer (‘The Monkey That Won the Pulitzer’) was published in Italian by Bruno Mondadori in 2011.