Content is notoriously hard to monetize. The few journalism outlets that haven’t struggled to do so are business publications. Why? They’ve got a wealthy audience, willing to pay for exclusive access to important news that impacts the company. The Wall Street Journal has successfully monetized its content through a paywall for years, while the New York Times cut staff left and right to make ends meet.
Until recently, Reuters fell staunchly in the former category. With its wire service focused on business reporting, it has avoided the trials and tribulations suffered by its colleagues. It had a set audience of publications and businesses willing to pay for news and market analysis.
But Reuters got a little over-confident. It thought it could parlay its success into a far more fickle market: consumers. Reuters Next was set to tackle consumers with an infinite scrolling approach.
The plan, under Reuters Digital Executive Editor Jim Roberts (previously head of The New York Times), was that the main Reuters website would get redesigned to look like an app. Content would appear in bite-sized chunks, story excerpts stacked one on top of each other. Even individual article pages would look like the homepage, parlaying into a flow of related content.
This is a big trend in news lately, as journalism organizations seek to keep their look modern and make discovering content easy –leading to more click throughs and greater advertising revenue. The hope with Next was that the Reuters name would become familiar to the average web reader, opening up the brand to more than just the business and finance markets.
But consumer audiences are easier to reach than monetize, and today’s news of the layoff of 150 editorial employees (5 percent of Reuters editorial staff worldwide) didn’t come as much of a surprise to anyone. There were hints of the problem for months now. In February, Reuters Financial and Risk Division said the company would be laying off 2,500 people by the end of the year. A few weeks ago, Reuters consumer facing publication Next shuttered its doors and Jim Roberts quit. And just yesterday, Reuters announced Neil Masterson as its “Chief Transformation Officer.” That’s a PC title for chief of layoffs if I ever heard one.
It looks like Reuters will be funneling any additional resources into local, international coverage, beefing up the news it gets paid to provide through its wire service.
So why the big shift in editorial strategy? In the letter about Next shutting down, Reuters Chief Executive Andrew Rashbass said the venture was a long way from commercial success — i.e. making money. Rashbass told Reuters staff, “I believe the existing suite of Reuters.com sites is a better starting point for where we need to go.” I.e. where Reuters needed to go was…exactly where it came from?
Rashbass was new to Reuters, having been recruited from The Economist Group in May. It only took him a few months at the helm to decide to cancel Next. It seems he didn’t see the point in spending time and money developing consumer news when the wire service brings in the regular paycheck.
Although the company hasn’t come right out and say it, Reuters may be struggling financially. In a September 30th farewell letter from Reuters veteran Martin De Sa’Pinto, who left recently, De Sa’Pinto repeatedly mentions the cost cutting measures of the company.
It’s unfortunate that Reuters is backtracking from trying to create a sustainable consumer track. Next could possibly have served as a leader in the appification of news, much like NPR. If it had succeeded, it could have been used as a monetization model for other publications, something better than the clickable Buzzfeed listicles or Business Insider slideshows. But the public failure will instead join the graveyard of projects like NewsTilt and NewsRight, monetization strategies for good content that tried — very hard — and failed. Oh, journalism.
[Image courtesy: Elliott Brown]