Venture-backed US media: over-funded & over here?

Imported from the Blogactiv.eu blogging platform, closed without warning in 2021. Links, images and embeds not guaranteed, and comments not displayed.

If you care about EU democracy you need to care about European media, particularly as the upcoming US media invasion gets underway. They'll be pushing on an open door when they get to Brussels.

Anyone interested in the Internet and/or media and/or democracy should have followed the development of media business models since at least the late 1990s, when newspapers saw their classified advertising start drying up. The following decade saw a lot of thrashing around as revenue stream after revenue stream got hit (banner advertising? already bad, about to get worse. Subscriptions & paywalls? only for the few). It's only in the past couple of years that the business of journalism has seen any serious investment at all (see From longform renaissance to Big Internet disenchantment).

Enter US venture capital

However, that's largely been by US venture capitalists. The problem is that last time VCs invested in online media they gave us social media platforms where the product on sale was us. The result of this was put best - at least recently - by Quinn Norton, one of many to write about the impending launch of the advertising-free Ello social platform:

"venture capitalists... are a much worse deal than most people realize...you have to make stratospheric amounts of money, or you have to die. You can’t be moderately successful, you can’t build a sustainable business... When the CEOs of Facebook and Twitter signed up for that money, they signed away any chance of building privacy for their users....  Big social networks seek an impossible level of total user engagement. The more they have you, and the more they have on you, the more they can feed their demons." - Quinn Norton, What Does Ethical Social Networking Software Look Like?

Which is ironic, given that Ello took venture capital and don't mention it anywhere:

"When you take venture capital, it is not a matter of if you’re going to sell your users, you already have... In the myopic and upside-down world of venture capital, exits precede the building of the actual thing itself. It would be a comedy if the repercussions of this toxic system were not so tragic... It is the opposite of a long-term, sustainable business." - Ello, Goodbye. Aral Balkan

The voracity of VC is why social media platforms are constantly tweaking their algorithms to keep you clicking, clicking, clicking. With every click they give you a little dopamine rush, and in return get a little piece of you to sell to advertisers. And they want their investments to sell more of you every year.

The twin pressures of declining newspaper revenues and exploding social media platforms gave us a media landscape of:

• clickbait: content created to be shared (let's just ignore the fact that noone's actually reading it);
• corporate journalism: why bother with journalists when you can pass your PR off as journalism?
• native advertising: let's pay those desperate hacks to write our advertising copy for us - as a bonus, they'll blend our paid-for articles so well into their 'real' journalism that a majority of readers can't tell the difference.

Original link

"Two-thirds of respondents said that they’ve felt deceived upon realizing that an article or video was sponsored by a brand" - Study: Sponsored Content Has a Trust Problem, Contently

Native advertising

And native advertising, it seems, may not just be the Next Big Thing, it may actually work... at least from one perspective. However, there are two perspectives at play here:

a) "it's the end of the world as we know it!":

Seriously, watch it - it's hilarious.

b) "Goddamn it, native ads will be the only thing keeping the lights on in 3 years", as told by NYTimes' Meredith Kopit Levien, lampooned in the above video.

"The best way to preserve editorially independent, high quality journalism is to preserve the business model. And I think the idea of branded content that shares a form factor with editorial is a great first step.”
- Going native at the Times , Capital New York

So here they come

With existing media weakened, and a corporate journalism / native advertising business model which finally makes sense to them, a new wave of VC-funded, American news media are expanding globally, including Mashable, BuzzFeed, Vice Media and Business Insider (hat tip: Poynter) and, of course, "PoliticoEU", the Politico/Springer tie-up setting up here in Brussels.

And the many more startups recently infused with venture capital will be right behind them, from Circa to Gawker. VCs are voracious, right? Keeping growth up will inevitably mean expanding beyond the US - it's just a question of time.

Of course, any investment in media is to be welcomed, and many of these outfits are actually betting against trends like clickbait and redefining the paradigm of what digital news is, as well as pushing forward news publishing technology. But many seem based on corporate journalism and native advertising, with many of the rest focused on free-riding on journalism - even one of my favoruite sites, longform, is in on the act with their latest mobile app:

"And what about the publishers who produce the content that will fill the Longform app? They will get pageviews, as articles in the app will default to a "Web" version when clicked on—though most users will likely opt for the "Read" version, which is just a tap away and is far more aesthetically pleasing." - Journalism curator Longform launching first iPhone app

Translation: we'll make money by sucking journalists' work into our app, where users can read it without being bothered by those pesky ads. Which pay the journalists salary. What could go wrong? Is it any wonder that journalism is embracing native advertising?

Pushing on an open door

In general, European media have been pretty slow to react to these trends, but the new arrivals will only accelerate change. Here in Brussels, moreover, they'll be pushing on an open door. With a struggling media sector and an overabundance of lobbyists and PR firms, it is no wonder that corporate journalism and native advertising is already alive and well. Take a look, for example, at this EurActiv special report, as shared on LinkedIn:

Original link

OK, I don't get a content strategy revolving around what looks like a PDF report either, but if you assume that's a given, it's a pretty good use of Slideshare and LinkedIn.

Above, the LinkedIn update provides an image (albeit the publication front page), and cites the author - a good example of a media putting its journalists forward via social media. The update of the "sharer" (Rick) provides an intriguing, curiosity-inducing quote (maybe I have diabetes!). The actual summary text, however, is much less compelling (page numbers on social media content?). Clicking on the media, below, opens a Slideshare popup (LinkedIn bought Slideshare a while back), making the content easier to read (once you go fullscreen), framed with comments:

Original link

It took me a minute or two to spot the corporate sponsorship, in the upper right corner, and I used to work at EurActiv, where sponsorship has been part of the business model since launch. Before you think I'm being critical, I'm not. They are, after all, one of the few survivors of the very first dotcom news bubble, 15 years ago. Surviving sure beats going under, particularly in a sector - EU media - where most have failed (see the exhaustive list by founder Christophe Leclerq).

Premonitions, not growing pains

But until recently I was sort of hoping that EurActiv's business model was the growing pains of a new EU media sector, that would one day be able to afford a proper Chinese wall between journalism and advertising. Modern journalism, after all, developed out of 19th century media practices that would turn your hair white if you read it today. But with the US model now in full export mode, it turns out that EurActiv was a premonition of more to come. Is it a problem? I'll leave the last word to Christophe, who seems to criticise "US PR-style ‘native advertising', ie  ‘sponsored articles’" in contrast to "transparent, general support for broader coverage, practiced for EurActiv’s policy sections".

I'm not sure the above example is aligned with that policy, but I'm happy to be corrected. What I am pretty sure that media needs to survive, and that, in the end, this mess is our fault because we're not paying for quality journalism. You only get what you pay for.

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Relevant reading

• From longform renaissance to Big Internet disenchantment
• BloggingPortal + PressEurop = ?
• Do we need more EU platforms, or sustainable EU media?
• The value of politically-motivated news
• Oh, so it’s the media’s fault noone likes the EU …

Most of my writing is inspired by and sourced from the stuff I put on my TumblrHub public library every day. Most relevant tags: native advertising, corporate journalism, PoliticoEU, algorithm, ello. See also longform, news, media, clickbait.