Unchangeable Realities of the News Business
Let’s start by grounding ourselves in reality, particularly when it comes to the news industry’s business model and revenue challenges.
- The average revenue per user (ARPU) in the news business is quite low because while we serve millions of users, each contributes only a minuscule amount to the overall revenue.
- Furthermore, news has become a commodity and most newsrooms have not built competitive differentiation to be able to justify charging for subscription.
If you study the fundamentals of the news business, it is evident that the industry has either relinquished or been pushed out of many key business functions to AI-driven marketplaces, particularly in the domains of Supply (Search and Social) and Ad Engines.
- This shift has profound implications. For instance, it has resulted in a scenario where advertisements in traditional media — print and TV — command significantly higher revenues compared to their digital counterparts.