Mary Meeker. Photo Credit: Jasveer10 [CC BY-SA 4.0] from Wikimedia Commons

Slide 186 is simple enough: global shipments of smartphones by year, from 2007 until last year. It’s the decade when everything changed, when our computers were replaced by devices many times smaller, and when everything became mobile. The key thing from that chart is that it’s s-shaped, meaning it starts out slow, rises precipitously, before levelling out. In short: We bought no more smartphones in 2017 than we did in 2016. The S-curve was discovered by Richard Foster in 1985 and made famous by Clayton Christensen, who invented the term ‘disruptive innovation.’

The key thing here is that we’re are at that levelling out part. That’s when both Foster and Christensen predict disruptive things happen. Foster called discontinuities, Christensen called it disruption, but it amounts to the same thing: other companies, peddling other technologies, products, innovations or platforms, are poised to steal a march on the incumbents and leave them by the side of the road. But what?

Well. If much of the past decade has been driven by smartphones, and it has, then we’re near the end of the smartphone era. It’s been an interesting ride since 2007/8, but shipments tailed off in 2016, and my interest in what the new Galaxy or iPhone might be able to do tailed off about then too. That means uncertain times, as incumbents search for new technologies, new efficiencies to ward off newcomers, and the newcomers experiment with a disruption that works. I believe the future will have to be beyond smartphones, to the point where we don’t need to interact with them at all and will stop treating them (and fetishising them) as prized objects. That, of course, is some way off. But it will come.

For now though, there are some interesting opportunities, especially for the makers of content.

The first one is this: Apple won the hardware value war, but has probably lost the peace. Consider the following, all taken from Meeker’s data:

• Other operating systems than iOS and Android have disappeared for the first time (slide 6). The platforms are now clear: Android will not be forked and owned by any hardware maker. (When did you last hear of Tizen in a phone?) Nor will any other challenger survive. There is absolutely no point in trying to build a new operating system for the phone. For other devices, maybe.
• Google’s Android has maintained market dominance: three-quarters of all smartphones shipped last year ran Android. You would think that as the average selling price of phones increases, high-end Android devices would succumb to the more flashy iPhones. Why not finally get that iPhone you’ve been dreaming of. But people don’t. Why? It’s probably because Apple phones are still significantly more expensive, meaning that the shift would usually be to one of the older, cheaper, discontinued, sometimes refurbished, models. (A significant chunk of iPhone users are those on older devices.) In status-conscious places like China, that’s not an acceptable switch. Better a new model of a lesser brand, now that those brands are pretty nice looking: think Huawei, Xiaomi, Samsung. Bottom line: as phones go into a replacement cycle, more and more high-end rollers are going to be on Android.

So. What does this mean for media and content producers? I believe it represents an opportunity. As the market for hardware slows — fewer people buying new phones, more people taking longer to replace their old ones — more money is freed up to be spent elsewhere in the ecosystem: on software and services, in-app subscriptions, purchases etc. Apple has traditionally benefited more from this — iOS users spend more in app stores and in-app purchases than Android users (per download a user spends $1.5, as opposed to about 30 cents per downloaded app for Android users, according to my calculation of App Annie data for Q1 2018.) But this gap is narrowing: consumer spend on Google Play grew 25% that quarter, against 20% on the iOS store.In other words: Despite the obvious growing affluence of many Android users, the operating system is still ignored by several key media constituencies — the most obvious of which is podcasts, which are still mostly the domain of iOS users, because Google has been late to make it a core feature of Android. That is changing, offering a window of opportunity. Any effort in focusing on Android is likely to have benefits, because as an OS it clearly isn’t going anywhere, and despite the fragmentation within Android, there’s still huge markets to win over. Don’t ignore the Droid!

This is part of a bigger picture, a larger shift for the main players as markets get saturated. All the big tech players are competing increasingly on the same field. While part of it is what I would call equipment (hardware and software) most of it is going to be over what you use that equipment for. As Ms Meeker points out:

• Amazon is (also) becoming an ad platform, sponsoring products on its websites and apps
• Google is (also) becoming a commerce platform (via Google Home ordering)

You might add to that

• Netflix, Google, Amazon, Apple are all creating content.

Everyone is trying to do everything because they can’t afford not to.

All recognise that the future lies not in hardware, or software, or even platforms, but in stacking the shelves of those platforms. This is not, per se, about e-commerce, but in being the place where people live within which that e-commerce — that buying, subscribing, consuming — takes place. The most obvious example of this is the voice-assistant — Google’s Home or Amazon’s Alexa. These are spies in the house of love: devices that become part of the family, learning your wishes and habits obediently and trying to anticipate them.

It’s artificial intelligence geared towards understanding, anticipating and satisfying your inner selves.

For makers and purveyors of content, the challenge is going to be to understand this shifting playing field. Somehow you need to elbow your way into one of these channels and provide a service that fits their model. Obvious targets would be to ensure you have a ‘skill’ on Alexa’s platform, where users can easily activate your news service over others. But deeper thinking may yield other opportunities — spelling games for kids that leverage your content, etc. I’ll talk more about these opportunities in a future column, and would love to hear your ideas and experiences.

Guide #4 – Facebook News Feed Changes: Impact and Actions, by Ross Settles.

Please download and share the guide. We would love to hear from you – send any comments or suggestions to us at mas@mdif.org.

[pdf-embedder url=”https://www.kbridge.org/wp-content/uploads/2018/05/MDIF_4_Facebook_Newsfeed.pdf” title=”Guide #4: Facebook News Feed Changes: Impact and Actions by Ross Settles”]

About author: Ross Settles, MDIF Senior Advisor for Digital Media, is an adjunct professor of digital media and entrepreneurship at Hong Kong University’s Journalism and Media Studies Center. He consults to media and investment firms on business development and marketing strategies. Ross worked with MDIF client Malaysiakini, the largest independent online news portal in Malaysia. His work with Malaysiakini focused on new online products and services as part of a yearlong Knight International Journalism Fellowship. Ross previously managed the online business and editorial operations for Hong Kong’s South China Morning Post and directed marketing and business development for Knight Ridder Digital. Before Knight Ridder, Ross led marketing and international development efforts for technology media company Red Herring Communications, and worked in marketing and product development with Times Mirror, the owner of the Los Angeles Times. Ross holds a Masters in Business Administration from the University of Chicago and a Bachelor of Arts in East Asian studies from Princeton University. He has spent over a decade in China and East Asia, and speaks, reads and writes Mandarin Chinese.

You can contact him via e-mail.

This explains why in many countries, digital journalistic enterprises launched when social media was already mature rapidly run ahead of legacy newspapers, even those that made big cash injections into their digital operations. Of course, successful digital media must produce good journalism, but their true secret is creating a conversation around it.  They are open to their public and easily let them know who they are. In one example in Eastern Europe, despite the traditional formality of many East European media, a new digital outlet had no problem sending a video to their audience of the editor sitting in her kitchen apologising saying she was sorry for a boring newsletter they had sent. In Latin America, new digital outlets have also successfully broken with the formal, ceremonial tone so characteristic of serious media there. Reporters tell the stories behind their best stories; introduce themselves with slang, as if to friends; constantly correct their mistakes; and when they have a conflict of interest about an issue, are candid about it. They let their public know that the media is only human.

These journalists offer their audiences a new, more transparent, and freer horizontal culture. However, sometimes, even those passionate journalists forget it takes two to tango. They want to tell their readers a lot about themselves, but do not care to listen.  Recently I saw journalists from Central America and the Middle East marvel at how little they knew about their readers after taking an intensive “read your analytics” course.  They said that knowing their Google stats and monitoring their following on social media makes a big difference to knowing how their stories are received.

But they, along with other media, including the largest US newspapers, have been realizing that tracking graphs and trends is not the same as talking with your public. (“We can count the world’s best-informed and most influential people among our readers”, said the New York Time’s 2014 innovation report. “Yet we haven’t cracked the code for engaging with them in a way that makes our report richer”).

Media in digital era know now they should invite readers to discover the world with them: open doors so that their audience can check the public discourse with them (like many of the 100+ fact-checking outlets around the globe are doing today); know the experts among their readers so that they bring insight into their news; call upon those with a generous heart to help them go through the millions of documents they just got from a source and build a database; ask the furious and the bullies, who write insults under their articles, where does their anger come from and, listen; open a space to let readers decide which reportage they should do; invite first-hand witnesses to document a problem they are investigating… the list of how much they can enrich their journalism is endless.

For those journalists with blinders who believe that engagement with audience is the business of marketers, Monica Guzman in her great guide about audience engagement  published this year with the American Press Institute proves them wrong. It is not about delivering a product, it is about making sure your readers know you respect and value them, she says, “showing them that together, they have important things to teach each other.”

Around the world independent journalism becomes stronger on the shoulders of the communities they serve.  Eldiario in Spain and Mada Masr in Egypt define themselves as a culture, a way of being, a clique, an idea of the society they want to be. And they build this dream together with a community that feels invited to be part of their world, well-treated, partaker, equal, like in any really good conversation. The “talky” public is here to stay and those journalists who fail to see their luck in this new era are likely to fade away.

This story originally appeared in https://medium.com/@OSFJournalism of the Open Society Foundation’s Program on Independent Journalism and is reprinted with permission.

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Well, no. Publishers are finding themselves at the wrong end of an uneven, unhealthy bargain, which is bad news for both news business economics and quality, pluralistic information.

“This is a really depressing, dystopian way to think about publishers and platforms. It only really makes sense if you view writing as a fungible commodity,” says John West in Quartz. For the synergy logic to work, a piece of journalism must be viewed as an ad unit, its value being no more and no less than how many clicks it generates. Even more depressing for West is that Facebook, Twitter, Snapchat and all other platforms view journalism in this way – they can see the cost (or potential revenues) of quality content, but not the value – and “that’s going to smother journalistic independence and the open web”.

The platforms have created such seamlessly efficient ways to deliver content that news publishers will soon have no need even to have a website. Facebook’s Instant Articles, Apple News, Google’s Accelerated Mobile Pages, Twitter’s Moments, Snapchat – they provide comfortable, contained experiences, perfectly tailored for mobile, which is the direction audiences are headed. While the bare audience numbers make sense in the short term, warns West, “it will cost you”.

By granting control of content to Facebook and its like, publishers are turning platforms into the world’s gatekeepers to information, and these risk-averse megacorps already have a less than glittering track record of speaking truth to power and promoting diverse views.

It also means that publishers become ever more reliant on clicks: they only have worth to the platform if they bring in the traffic. The implication for quality is clear: as publishers become wire services for platforms, they lose their unique voice, their identity and their connection with their own audience. Editorial output has to match the platform’s audience, so publishers are incentivized to create bland, populist or clickbait brand of news. This means that a publisher’s traditional audience trusts them less and, with the context removed (knowing that an article was produced by The Guardian or The New Republic is an important part of the reading experience), an article has less meaning.

West also laments that “we’re also losing the organic and open shape of the web. It’s becoming something much more rigid and more hierarchical.”

“The answer is simple, but it isn’t easy,” he concludes. “We need to stop pretending that content is free. Publications need to ask readers to pay for their content directly, and readers need to be willing to give up money, as opposed to their privacy and attention. This means that publications will have to abandon the rapid-growth business models driven by display ads, which have driven them to rely on Facebook for millions of pageviews a month.”

John Herman in The Awl take a look at another aspect of the unfolding battle between publishers and platforms. Platforms like Snapchat, Twitter, Facebook and Google are creating their own editorial spaces and, in some cases, standalone apps, but are wrestling with what content to put there. With the platforms not having a clear content plan or even what audiences they want to serve, it leaves publishers with the headache of having to ask: “What do these platforms want from us? What will they then want for themselves? What will be left for the partners?” This is an uncomfortable place for publishers to be.

Herman points out that over the past few years, publishers have been providing platforms like Facebook with huge volumes of free content in exchange for big audiences and, occasionally, revenues. However, he warns that Facebook is simultaneously intent on destroying this same advertising system.

Platforms are sucking in the ad revenues that used to go to web advertising that helped support publishers. “These new in-house editorial projects located at the center of the platform, rather than at its edges, will succeed or fail based on how they assist in that project—not according to how well they replicate or replace or improve on publications supported by a model they’re in the process of destroying.”

Publishers be warned.

For Michael Wolff, writing in MIT Technology Review, the acceptance of Instant Articles by major players who have signed up to provide content through the feature provided yet another example of bad decision-making by the news industry. As he points out: “Netflix will pay approximately $3 billion in licensing and production fees this year to the television and film industry; Hulu is paying $192 million to license South Park; Spotify pays out 70 percent of its gross revenues to the music labels that hold the underlying rights to Spotify’s catalogue. Now here’s what Facebook is guaranteeing a variety of publishers, including the New York Times, BuzzFeed, and the Atlantic, which are posting articles in its new “instant articles” feature: $0.”

He accuses news publishers of giving away their content for free, while at the same time losing control of their branding and valuable usage data. In the Facebook deal, publishers can sell ads on their articles and keep all of the revenue, or have Facebook sell ads in exchange for 30 percent.

“In the case of these new platform distribution deals—while they all involve slightly different plays—they each mimic a standard publishing business model: syndication. That is, a publisher with access to a different audience redistributes the content of another publisher—of course paying the content owner a fair fee. In some sense, this is the basis of the media business … Content is valuable–otherwise why distribute it?”

This leads Wolff to wonder whether “republishing initiatives are digging a deeper hole for publishers or helping them get out of the one they are already in”. He sees no reason to think things will turn out well: “…publishers have largely found themselves in this dismal situation because of their past bad decisions—accepting the general free ethos, bowing to a vast catchall of casual and formal sharing and re-posting agreements, and failing to challenge an ever-expanding interpretation of fair use. It seems only logical to doubt the business acumen of people who have been singularly inept when it comes to protecting their interests in the world of digital distribution.”

Facebook’s rationale for publishers to support Instant Articles is that it will provide a better user experience and deliver bigger audiences. While true, Wolff says that publishers will lose sustainable brand-building opportunities; it’s a model that better suits content that maximizes revenue potential, in particular ‘native content’, and will further push down digital ad prices.

According to Wolff, this type of syndication arrangement represents “another step closer toward what Ken Doctor, an analyst and journalist who has closely covered the demise of the news business, calls “off news site” reading. In this, publishers effectively give up their own channels and become suppliers of content to more efficient distribution channels … In effect, the New York Times becomes a wire service–the AP, except where the AP gets paid huge licensing fees, the Times does not.”

With the collapse of traditional ad revenues, publishers have justified pushing forward with digital experimentation because others were and because they couldn’t afford not to, even though they don’t fully understand the technology. “The ultimate result was a disastrous, sheep-to-slaughter endgame scenario, in which the new, digitally focused publishers are a fraction of their analog size. And now, in the prevalent view, there is simply no turning back.”

Meanwhile, dollars are flowing into the coffers of TV, movie and sports content creators. Even music, is fighting to win back control of – or at least payment for – its product. Wolff concludes that while there are differences between entertainment and news publishing that may explain why the old rules don’t apply in the new world, “perhaps publishers are just shamefully bad businessmen”.

In Mobile Marketing Daily, Steve Smith reviews the Apple News app and what it means for the news business. He concludes that in user experience terms it’s similar to Flipboard and Zeit – aggregating content from news sites and blogs in an attractive, easy-to-use way – but his diagnosis for the publishing industry makes for grim reading: “The legitimate worry of course is that media brands further lose control of their audience, data, context – and potentially, of their advertisers. I would say “Alert the media,” but in this scenario the media are already dead men walking.”

Writing for Fast Company, Joel Johnson points out that Apple and Facebook are just giving users what they want: a faster, less cluttered experience, compared to the slow load times and multitude of ad forms assaulting users on the sites of news publishers, who are forced into maximizing revenue by any means possible. Aggregators may provide a better – though banal – experience, “but it is unclear if most publications will be able to survive on only the revenue granted by these platform companies alone.” Apple’s attitude that “advertising is always unwelcome, unless it happens to be advertising that Apple itself lords over” is also a serious concern. “With small-to-midsize publishers already dropping like flies, things are looking perilous for readers and writers alike.”

An article in The Wall Street Journal claims that desktop usage isn’t decreasing, as is often claimed. Jack Marshall explains that while the share of the market enjoyed by mobile internet access is growing fast, the total time spent online from desktops isn’t falling and might even be increasing.

However, Thad McIlroy on the Future of Publishing blog says this interpretation is misleading. The data The Wall Street Journal bases its findings on “encompasses all desktop computer usage, the majority of which relates to the Microsoft and Adobe application suites as well as email”.

“The real story is not that the PC usage is up, but that simultaneous device use — usually called ‘multi-platform’ — has changed the device landscape.” McIlroy says that data from another comScore report, The U.S. Digital Future in Focus 2015, shows that the number of people only using desktops to access the internet is declining sharply in all age groups, even the 55+ segment, and that across all ages the amount of mobile-only users is also growing fast.

This interpretation of the data – that mobile is growing at the expense of desktop – seems to be backed up by Google, which recently confirmed that it’s now serving more Google searches on smartphones than desktops in 10 counties, including the US and Japan. To respond to changing demands, Google is “rolling out new, smartphone-optimized ad formats that give users more reason to tap than its traditional AdWords. These include picture-heavy automobile ads that show users a gallery of their dream ride before directing them to dealerships, and hotel ads that sandwich together availability, prices, user reviews, and pictures into a compact mobile format.”

However, while the amount of mobile access might be outstripping desktop, an Outbrain study in the Asia-Pacific region shows that people consuming content on desktop are much more likely to engage with content compared to mobile, especially when it comes to paid content, reports Trak.in.

“In fact, if we compare desktop vs mobile, then engagement level falls drastically to 36% in Australia; and 9% in India. This means that if an Indian accesses a piece of content on mobile, then there is 9% less chance of his engagement compared to accessing content on desktop. Engagement here means sharing, commenting, liking the post or following the author/publication on social media.”

Of course mobile and desktop are both heavily used to access email. Yesware Enterprise examined more than 14 million messages sent by its users earlier this year to produce a detailed pattern of when and on what device people use to read their emails. This slideshow gives an insight into their findings.

Ingram explains that some critics say that Sullivan’s retirement signals the death of blogging, while others claim that it actually died a long time ago. BuzzFeed’s Ben Smith has argued that blogging disappeared when people like himself started to use it as a tool to power their own career. “Ben is saying that some bloggers stopped thinking as much about being part of a larger ecosystem — one in which they linked to and sent traffic to other bloggers, and in turn relied on their resources and links — and started thinking about becoming their own independent media entities instead. In effect, they turned inwards, and became more concerned with creating their own content and building up their readership, and turning that into a business.”

Ezra Klein, co-founder of Vox, thinks that the rise of the social web forced blogging to change. The niche, specialist nature of blogs that linked to other blogs, creating community and conversation, has been replaced by the search for virality through Facebook and Twitter.

In Ingram’s opinion, the truth is that blogging hasn’t died; it has changed. In fact, we are now surrounded by it. When it started, blogging was the quickest way to publish your voice, to share your thoughts and listen to what others were saying. Now, with Snapchat, Instagram and Facebook, all the elements that we used to think of as blogging are everywhere, immediately available to us all, easier to use than traditional platforms, and providing far larger audiences.

“Clinging to a specific form like blogging is an anachronism,” he says. What newspapers like the New York Times have done is to get rid of their blogs as separate entities, and incorporate that content into the rest of the paper.

Big Data is “an umbrella term for a variety of strategies and tactics that involve massive data sets, and technologies that make sense out of these mindboggling reams of data”. The report explains that the media industry can think of Big Data as “the Four Vs, including:

• volume of data;
• velocity of data, meaning it needs to be analysed quickly;
• in a variety of structured and increasingly unstructured data formats;
• which all have potential value in terms of high quality journalism and business insights and revenue.”

Media companies can use Big Data analysis to improve many aspects of their business performance, such as understanding their audience and better targeting customers, crunching huge data sets to uncover stories, directing campaigns, improving decision-making and creating business efficiencies.

The report provides detailed examples from several leading media companies using Big Data to develop their audience and business, including:

• Huffington Post, which “uses Big Data to optimise content, authenticate comments, ensure efficacy of native advertising, regulate advertising placement and create passive personalisation”.
• BuzzFeed, which uses Big Data pre-publication to predict the virality of articles by identifying “characteristics with predictive relationship to virality”, and post-publication to “optimise the article’s promotion”.
• The Financial Times, which uses registration data collected through its metered paywall “to serve the customer better, create targeted advertising campaigns and create new products based on information collected on background and areas of interest to its readers”.

The report also examines training data journalists and data-driven automation in journalism, as well as lessons from beyond the media sector.

Bilton quotes Andrew Jack, head of aggregation and curated content at The Financial Times, which recently launched its latest daily newsletter, First FT: “There’s still a very strong appetite for email. People want something that’s always there and easy to access. It also gives us a way to push news and comments to readers in a new form.”

Benjamin Mullin of Poynter.org explains how effective email newsletters are proving for BuzzFeed: “so far in 2014 newsletter traffic to BuzzFeed is up 700 percent over 2013. And newsletters … are now in the ‘top five or six’ biggest drivers of traffic, behind sites including Facebook, Pinterest, Google and Twitter.” BuzzFeed now has 14 newsletters targeted at different audience segments.

While FirstFT aggregates articles from a variety of sources, not everyone agrees. Bilton gives an overview of four of the leading media newsletters.

Quartz: Daily Brief

• “We wanted the newsletter to feel like a personal email from a savvy, intelligent, well-connected person.”
• Aggregated sources
• 95,000 subscribers
• Sponsored and native ads

Vox: Sentences

• “Vox Sentences is the fastest way to get caught up on the most important news stories after a long day”
• Delivery: 8pm.
• Aggregated sources
• Banner ads

The Financial Times: FirstFT

• Morning briefing aimed at global decision-makers
• 50% FT sources, 50% external
• Some ads but goal is to drive FT subscriptions by building a relationship.

 Time.com: The Brief

• A daily snapshot of Time’s content to build the audience’s habit of using Time.
• Links to 12 Time stories, no aggregation
• 650,000 subscribers, with a 40 percent open rate.
• Carries ads and pushes readers to subscribe to its magazine.