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Forget Spotify for News. Let's Fix the Real Problem

Written by on February 24, 2017

The concept of Spotify for News is one of the things that keeps coming back. Over the past couple of months, I have been asked about this model from several publishers, seen several people talk about it on Twitter, and, just last week, Esther Kezia Harding of theMediaBriefing, wrote a well reasoned article about why Spotify for News is needed.

However, I just don't see this happening, at least not in the way we think it will. Nor can I see how it would solve any of the problems that we face today.

So, in this article, I'm going to illustrate why, but also explain and give examples of what we need to do instead to be successful.

We don't understand what the media world really is

The first fundamental problem that everyone seems to miss is what the media world is about. When we talk about Spotify for News, the focus seems to be on only the publications from traditional publishers, like these:

(Image via Jason Tester Guerrilla Futures' Flickr)

I'm not talking print aspect here. I'm talking about traditional publications in the form of newspapers and magazines.

We see this in Esther's article as well. Here she went out to The Media Briefing's Twitter followers and asked them how many different publishers people read each week, and this was the result:

You see the problem here?

The problem is not that people are saying that they are now reading between 9-15 publications each week, nor that you probably think this is a high number. Nor is it a problem that the people who likely answered are all media professionals and thus don't really represent the larger public.

The problem is that this number is way too low and likely completely wrong on every single level. The way people define the word 'publishers' inside their head almost always means they are thinking of old media.

Mind you, I'm not blaming Esther here because it's not just this study that makes this mistake. Every media study is making this mistake. The problem is that we don't understand the question.

Let me explain.

Take a person like me. On YouTube, I follow about 120 different YouTube channels... regularly, every week. On Twitch, I watch some other channels. In my Inbox I get about 25 newsletters per day, and on Feedly, I follow about 100 more sources, regularly. On Twitter, we all follow a ton of different channels. For instance, I follow The Media Briefing on Twitter. And on other social channels, I might regularly follow other channels.

So, we are not talking about 9-15 sources anymore. That number only represents the traditional forms of media that we still follow. If you look at the actual world of media, we follow 10 times that amount, or maybe even more.

"But," you say, "You are the extreme. Most people don't do this." Really? Are you sure?

Let me put something into perspective here. Variety has long been doing a good job measuring real celebrity influence, and each year they find that digital celebrities are taking over more and more of our world.

Here is the latest list (from 2015), and all the ones marked in blue are digital celebrities that you don't find on traditional media channels.

These are just the top ones, but there is actually an even more exciting world of online stars when you look at it in even more detail. On YouTube, for instance, we have people like Sara Lynn Cauchon, who runs The Domestic Geek YouTube channel. She has a million followers who watch her videos regularly, every week.

She is nowhere near these top celebrities, but her audience is a million people, and there are so many other YouTuber's like her. We have Dianna Cowern (Physics Girl) with half a million followers. Frank Howarth, a woodworker, with 300,000 followers, and the list goes on and on.

This is the real world of media today.

To suggest that people are now only following 9-15 sources, regularly, per week is not realistic. People follow hundreds of sources, and often without even realizing it.

The problem that we all have when we do studies like this is that the word 'news' and 'publishers' mean something different in people's brains than what is actually going on when they consume media.

When a researcher (like PEW) goes out and asks people "Where do you get your news?", the word in people's minds is linked to old world of media. So, they answer the question in relation to the traditional definition of news. They say they read sources like the Guardian, NYT and other 'news' sources.

The word 'news' makes us think about this:

But when you actually look at consumption patterns, it's pretty obvious that this isn't people's main sources of news at all. Instead, it's this:

All of these are YouTube channels that media people don't consider to be news... but to everyone else, these videos contain more relevant information that they hadn't heard about before (hence, it's news) than what you would find in newspapers.

You see what's happening here?

The word 'news' makes people think about the old world and only the type of stories usually covered by traditional media. While the actual world of news, when we look at real consumption and attention time, is dominantly something very different.

On top of the real channels, we also have a growing world of accidental news consumption, which no study have accurately measured yet.

Take someone like Chris Hadfield, the famous Canadian Astronaut. Last week, while signing books, he decided to livestream it and do a Q&A. Sadly, you can't see the questions people asked, but you can listen to his answers. And when you do this, you realize that this also is a news conference. It's a way for Chris to connect with his fans and give them news about what he is up to, and to give people news about the things he cares about.

For instance, one person asked him what he was excited about in the future of space, and Chris started talking about all the upcoming space missions and experiments NASA (and others) were planning.

This is all news!

So let me ask you again. Where do you get your news? And what publishers do you follow regularly?

This is not the correct answer. It's not even close.

The real world of news and publishing is now much bigger than how we in the media world defines it, and this has massive impact on the future of media.

But, you say, if we are not just following 9-15 traditional sources but maybe hundreds of sources, isn't that an even better argument for why we need a Spotify for News?

Well, yes and no.

It's certainly true that in a world of so many sources, it's impossible to contemplate that people would want to pay for each one of them. The cost of doing that would be insane, and we already know how hard it is to get people to pay for news to begin with.

But it doesn't work the other way either.

Let me explain.

It's certainly true that people's willingness to pay for each source only works as long as we have a very small number of sources available. It's also true that once the number of sources exceeds the maximum budget that people are willing to spend, it's tempting to think that people would rather just pay a single price for everything, like how we see with Spotify or Netflix.

The problem here, however, is that this doesn't make financial sense for publishers/creators. Because, as the number of publishers go up, the money going into the system stays the same. The outcome is that each publisher ends up with much lower revenue per view.

Let me give you a simple example with Facebook.

Imagine that Facebook were to monetize views for publishers (aka have a revenue share of 55-45 like YouTube has), and let's run the numbers for that.

In the past, US newspapers (just the newspapers) made $80 billion in revenue when they peaked back in year 2000.

In comparison, last year Facebook made about $15 billion in revenue from USA and Canada ($27 billion globally), which is astonishing. But Facebook is not just about newspapers. Unlike what some in the media think, most of the posts on Facebook has nothing to do with newspapers.

I have seen no reliable studies that look at just how much of Facebook's engagement is actually going to traditional newspapers, but it's probably much lower than what we think. So, let's assume that 2% of Facebook's total activity in the US goes to newspapers in a comparable way to how we would define it in the past.

Now we are down to $300 million dollars that has to be shared with publishers.

Then we apply the revenue share, leaving 55% to publishers, and we are down to $165 million that all newspapers have to share. Or...0.2% of the revenue newspaper publishers had in 2000.

You can't run a news industry on that.

This is not just the case on Facebook. We see the same thing on YouTube. We often hear from artists and record labels how they are demanding that YouTube should pay artists more, but they all forget that YouTube isn't just a platform for music videos. It's not like MTV in the 90s.

Instead, YouTube is this massive platform where an incredible amount of the attention is going to 'other channels' who all have to get their cut of the total revenue. It's not that YouTube doesn't want to pay artists a bigger share, it's that they have to pay thousands of different channels with the same revenue.

So, on every channel we look at, the 'Spotify' model doesn't really work. It doesn't even work on Spotify. The abundance that we have today is so massive that it leaves very little money to each publisher.

Even if you could create a Spotify for News, or convince Facebook to do a revenue share, it wouldn't solve any problems.

Sure, for a few massive publishers it might actually work (I'm sure BuzzFeed would love it), but it wouldn't solve the problem for the industry.

Platforms only work for creators when you can limit the number of creators on it. The platforms don't care, of course, because they make money of the total revenue, so Facebook wants as many things as possible. But for individual creators, it's not a very good idea.

When the level of abundance gets too high, the solution, as hard as it may sound, is that somebody has to lose so that others can win. Or to phrase that in a slightly more positive way.

You have to get picked!

This is the reality of media today. Our real world looks like this:

We see this everywhere.

On YouTube, for instance, only the biggest YouTubers are really able to make a living off the shared revenue they get from YouTube advertising. Most other YouTubers, all the ones in the middle, are forced to find other forms of income to make up the difference.

This is why we see YouTubers encourage their followers to 'support us on Patreon'. They are asking their followers to 'pick me'.

This is, for instance, what Kurzgesagt - In a Nutshell did.

Today, 6,371 people have done just that, paying about $4 on average each month, giving them an extra revenue of about $300,000 per year.

It's the same story over at Twitch. Here we have the same problem that there are too many Twitch players competing over the same money. So, creating a shared model like 'Spotify for Twitch' wouldn't work.

Instead, what most people do on Twitch is focus on getting picked, and they do this in several different ways. Many try to do it via donations, some do it with merchandize, but there is also the straight up focus on subscriptions.

Here we have Hannah Rutherford, one of the popular Twitch/YouTubers and part of Yogscast. At the top of her Twitch channel you find this:

Yep, she is asking young people to subscribe for $4.99 per month, and many do so because it is a way to show support, and get benefits and a tighter connection during streams.

This is happening on Twitch right now.

Think about what this means. For a person such as Hannah, it's far more valuable to get a few thousand people to pay her $4.99 directly than to have a shared model where she merely gets a few cents per thousand views.

It's far more valuable to 'get picked', but it's also much, much harder.

But this is the reality of the 'young creators' today. They are not talking about a Spotify model because they know it wouldn't work. It's only us old people in the media who talk about it because we like the idea of not having to do the massive work needed to 'sell' our content. We like to get another newsstand.

This is even true for big channels such as BuzzFeed Tasty. I wrote about it a few weeks ago and it's a fascinating channel. The way BuzzFeed Tasty is monetized is to get picked as well.

They are doing this in two ways.

First, they are asking advertisers to 'pick them' specifically, because the 'Spotify for advertising' model which we see with Google and Facebook doesn't make that much money per view. So BuzzFeed is telling advertisers to partner with them directly so that they don't have to share the ad budget with thousands of other publishers.

Just pick us!

Secondly, they launched the BuzzFeed Tasty personalized cookbook. It's the same concept. Instead of relying on a shared revenue via a platform, they have created a specific product for people to pick.

Pick this book

So even BuzzFeed knows that the key to winning is to get picked.

Mind you, all of the examples I just showed you, are all based on things that young people do. Yes, young people pay for content in many different ways right now.

The problem we have isn't that young people don't pay for things they like. It's that when they look at old media such as traditional newspapers and magazines they don't see the point of them.

One example of this is Teen Vogue.

There are a lot of very exciting things happening over at Teen Vogue. They have really found their voice again, and I hear amazing stories about them all the time. Take a look at this tweet I came across just the other day.

Teen Vogue is awesome!

So, as a media analyst, I started to wonder how they are able to monetize it. So I went to their website, clicked on the subscribe button, and found this:

Are you freaking kidding me? What Teen Vogue is selling here is a print focused 'quarterly edition' of the magazine.

What is this? The 1990s?

This is insane.

Obviously, young people aren't going to pay for this. Why would a young person subscribe to a quarterly print-focused publication?

Compare this to what Hannah Rutherford is doing on Twitch. She is saying, pay me $4.99 per month, and you will help support what I do, not be bothered with ads, get benefits that you can show off to your friends, and be closer connected to me when we are doing something live together.

The reason young people don't want to pay for news, as so many media people constantly say, isn't because they don't want to pay. It's because what you are trying to sell them, and the way you are selling it, absolutely sucks!

Teen Vogue is not even trying to get young people to pay. It's still trying to get old people from the 1990s to pay. Obviously that's not going to work.

As a media analyst, I can get so frustrated by this. Magazines such as Teen Vogue is doing so many amazing things editorially, but then when it comes to the business side, it's like it doesn't even know what world it is living in.

And no, we don't need a 'Spotify for News' to fix this, because that's just another distraction. We are not going to solve this by just being part of a larger package. The way to solve this is to get better at being picked.

You need to stop thinking about content as being just random magazines displayed at a newsstand and start to think like digital natives.

Stand out. Connect. Get picked!

This is how you will win the future.

The media is not singular

The final point I want to make about why a Spotify for News isn't going to work is that media isn't a singular activity anymore.

In the old days, media consumption was always done in a singular way.

Take something like TV.

There are a ton of different TV shows but the format is always the same, and the way we watch them by sitting down on the couch in front of a big screen, is the same as well. So, it made sense to create a singular distribution form as well... namely cable TV.

It's the same with the media. In the past, it didn't matter what the magazine or the newspapers was about, because people would read them the same way. We would either read them during breakfast or sit down with a newspaper or magazine in the afternoon/evening for 20 minutes or so.

We see this so very clearly when we look at the newsstand, here illustrated with the picture from before:

All of these are different magazines with different target markets and editorial focus areas, but they are also all the same.

In terms of consumption patterns and how people think about them, there is no difference between how people read the magazines in the upper right corner compared to those in the lower-left.

Because of this, traditional publishers are all the same as well. The overall editorial strategy is the same, the way magazines are sold are the same, the way they are distributed is the same. This is why Teen Vogue is sold the same way as Wired Magazine.

We see the same thing with music. We have different genres, of course, but every song is consumed the same way regardless of who made it. So we created a singular platform for that too ... called Spotify.

The problem is that when we look at content online, we are no longer living in a singular world of media. With digital content, we are now living in a world with different types of moments and different types of intent.

I have written about this in many of my Plus reports, most recently in 'Creating High-Value Snackable Content' which I highly recommend that you read.

In that article, I illustrate how our world of media is now generally divided up into four massively different types of media.

Each one of these require very different strategies and models. The market for low-intent micro-moment content (like BuzzFeed Tasty) needs to be monetized in one way, while the market for low-intent macro-content needs to be monetized in an entirely different way. This is true for all of the four models.

Trying to solve this by just adding all of them into a 'Spotify for News' model is the last thing we want to do. All that does is reduce this complex world of media into the old world of singular consumption, which is not how people consume media anymore.

Worse than that, a Spotify for News model reduces every article to just being a part of the whole. And, again, that's not what we want.

But the difference is even bigger than what most people realize. Let me give you a simple example.

If you look at the newsstand picture above, you notice a magazine on the bottom shelf about 'yoga'.

So, imagine that you are the publisher of this magazine and you come to me and say:

Hey Thomas, we have a hard time convincing young people to subscribe to our magazine, what should we do?

You know what I would say? I would say:

Why are you publishing a yoga magazine?

The reason is not because I want to be difficult, but because the market for yoga has very clearly shifted into something entirely different than a magazine. Today, some of the most popular yoga publishers are people like Yoga with Adriene.

She combines the act of teaching people yoga (across many different channels), with high-value books about yoga, merchandise and other things, all to create a highly successful channel.

For instance, apart from her popular YouTube channel, she has a Yoga member channel called 'Find What Feels Good', where her members can join her online yoga class, get access to her full video library and other exclusive content. The price she is charging for this is $9.99 per month.

Why is it that people like Adriene can make this work, and get young people to pay this much money when traditional publishers struggle to get people to pay anything at all?

Let's compare this to the Yoga Journal (the magazine).

We go to their website, which looks nice and has a lot of good content, and then we click on the 'subscribe' button, and what do we see?

Well, confusingly enough, they have two different subscription pages. One page seems to be print only (which looks remarkably like Teen Vogue's because all old media is sold the same way), where they offer you to subscribe for about $1 per issue.

Remember, Yoga with Adriene is able to get young people to pay 10 times that amount.

The other page is focused more on digital (well, kind of). Here they offer a slightly more expensive price of $19.99 per year for the digital version (in comparison Adriene charges $119 per year).

Or what about the content. How does that compare?

Well, let's take a look at Yoga Journal. I downloaded the iPad app and started flipping through the pages. First of all, if 'flipping through pages' is still how you get people to navigate... yeah... come on people!

Secondly, this was what I found:

They told a person to sit down and write some words on a page and then they added some pictures that don't really show you anything.

This is the most pointless way to teach people yoga that you can possibly do. Why would anyone ever want to learn yoga this way? I can understand why we did this back in the 1980s because, back then, we only had print to work with. But in 2017? Why would anyone pay for this?

You want to see how Adriene does this? Here is the introduction to her latest series, and the first video:

This is awesome!

The first video in her series has one million views on YouTube. One million! Granted the subsequent videos have less, and it seems to have leveled out at around 100,000 views per video, but that's still a lot.

Adriene, who is just one person, is beating the largest Yoga Magazine in the US on every single metric. She is more popular, she has a much better model, and she can charge 10 times the price. Unlike traditional publishers, she doesn't have a problem attracting young people to her channel.

So, if Yoga Journal came to me to ask: "Hey Thomas, we have a hard time convincing young people to subscribe to our magazine, what should we do?" My answer would be, why on Earth are you still publishing a magazine with text articles about how to learn to do Yoga?

You are making a product for a market that has moved on a long time ago.

Mind you, this is for yoga. If you look at other magazines, we discover different changes and different needs. A car magazine, for instance, needs an entirely different model, and a business magazine needs a different one as well.

This is the new reality. The old newsstand model where every magazine followed the same recipe for success simply doesn't work anymore. That market doesn't exist anymore, and our world of media is no longer defined by a single form of consumption.

This is another reason why the Spotify for News model simply doesn't work. It's a model designed as a singular answer to a complex market that doesn't fit into it.

Yes, it's incredibly hard to 'get picked' and to convince people to pay. But the solution is not to create another newsstand, and especially not one where every publisher has to compete for the same share of the revenue.

The real problem isn't that people don't want to pay. The real problem is that you ask them to pay for something that isn't relevant to them.

Fix that instead.

Mind you, there are limited models where a shared package does work. For instance, Motor Trend On Demand is a shared platform where all of Motor Trend's different publications and shows are brought into a single platform.

It works because everything on it is part of the same need. It's not random content from random publications. It's amazing content for car enthusiasts and all based on the same singular desire.

Similarly we see new projects like Alpha, the shared video platform combining Nerdist and Geek and Sundry shows. It too has a potential of working because it too is targeting just a single need (the geek culture).

The reason why these work is, again, that by specializing the focus, you reduce the abundance and thus you come back into the zone where a shared model works.

So, highly specialized platforms that complement and enhance each other through a shared focus, passion and purpose make sense. But a big random 'Spotify for News' for all the old media companies who struggle to get paid? No... Not really the right way to solve that problem.

But, again, the most important and main reason why media companies fail is because you are not making the right product to begin with. That's not going to work regardless of how you publish it.

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Thomas Baekdal

Thomas Baekdal

Founder of Baekdal, author, writer, strategic consultant, and new media advocate.

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