Social platforms: A channel for fake news, or the next revolution in Journalism?

By Monika Saha, GM Finance Product Line at Zuora

An article appeared on NeimanLab recently about a reporter in rural India who has managed to attract paid subscribers to a local news service that he delivers on Whatsapp.

Pause and think about that for a moment. An individual journalist delivers a subscription-based news feed on a platform that is offered free to the world (Whatsapp). That free platform belongs to a company whose primary source of revenue is advertising (Read: Facebook’s Q1 earnings).

While this story was about one individual journalist, I believe it’s a signal of what the next revolution in paid content might look like. The revolution will be influenced by:

  • How individual journalists and media powerhouses harness platforms
  • The role we, the readers will play in choosing how we consume and pay for news
  • The pervasiveness of the subscription business model

The power of platforms
When Facebook acquired WhatsApp for $19 billion in 2014 at a time when most people in the United States were unfamiliar with the service, it seemed slightly ridiculous.

But three years later, when you hear Mark Zuckerberg reveal on Facebook’s most recent earnings call that WhatsApp now has 1.2 billion MAUs (monthly active users) who collectively send over 50 billion messages per day, you take notice.

Facebook now owns the interface that connects 1.2 billion people. This approach to owning the customer interface is what makes companies like Facebook, Google, Airbnb, and Uber valuable. These are all “platform” companies, not “full stack companies.” Platform companies focus on enabling value-creating interactions between users versus delivering the end product or service. As Tom Goodwin of Havas Media wrote in 2015, “The New York Times needs to write, fact check, buy paper, print, and distribute newspapers to get their ad money. Facebook provides a platform for us to write our own content. Our mobile operators seem like dumb data pipes while WhatsApp provides the services we value and can monetize our attention.” I can’t tell if this journalist in India was paying attention to TechCrunch, but he’s certainly proving out the potential outcome of Facebook’s approach to building a “platform company.”

Society’s willingness to pay for news
There has been a lot of debate in recent months over the pervasiveness of “fake news” and the role that Facebook’s platform may have played in the rise of fake news. Amidst all this debate, just when you’re convinced that real journalism can’t survive, the story of this lone journalist provides some hope. A hope that goes beyond the “journalism is alive and well” cliche. It’s a hope that despite intelligent algorithms that attempt to feed you the news they think you want to read, despite media echo-chambers, despite editorial agendas driven by advertising dollars, we as a society still have the power to choose plain and simple factual reporting. And we are willing to pay for that plain and simple factual reporting.

We feel this hope because in an Indian state where the average per capita income is about $770 per year, where money is carefully spent on necessities and rarely on luxuries, people still choose to pay for the news delivered by this journalist. And they do so despite having access to a plethora of free advertising-funded news sources.

The pervasiveness of subscription business models
Lastly, this is yet another proof point of the pervasiveness of subscription business models. Yes, it is true that we are used to seeing newspapers and other forms of media being offered as a subscription for many years. But during the golden age of advertising, the subscription business model within the media industry was dying a slow death. Content was increasingly free, and it was paid for by advertising.

Slowly but surely, the media industry is beginning to reverse that trend, and leading media houses have invested heavily in monetizing their content via paid subscriptions. It seems we are now in the next phase of content monetization. It’s no longer a question of whether consumers will pay for a subscription to content. It’s a question of “who” they will pay and on what platform.

Remember, there are 1.2 billion monthly active users on WhatsApp. Each with their own ability to create content. Not everyone will create a journalistic news feed, but you get the idea. And if recent speculation is to be believed, those 1.2 billion users might even have the ability to monetize that content on WhatsApp one day.

The next success story in media will be at the intersection of these three forces: a powerful platform, value that encourages willingness to pay, and a healthy subscription business model.

Don’t miss Monika Saha’s session at our upcoming Subscribed conference on The Benefits of Subscription Order Management!
And check out her article in Forbes – Has India Quietly Launched a 1.2 Billion People into the Subscription Economy?

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