For the last two decades, the media industry has been in a tremendous state of flux. Consumer preferences shifting to Internet-based options over print. Then, social media feeds began to attract reader/viewer attention to an even greater extent. Traditional media giants had to shift gears to stay afloat, and many fell by the wayside along the way. At the same time, a number of media startups believing they had the right recipe for success launched in this climate. But despite their visions, they too have struggled to survive in this new environment. It’s therefore worth exploring these news media start-up struggles in greater depth. Notably, the goal is greater news media audience engagement. But identifying how to accomplish this is much more difficult than expected.
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The most recent organization to experience these news media startup struggles involved The Messenger. Less than a year since its beginning, its founder announced it would be closing its doors. Hemorrhaging investment dollars with minimal revenues, the Messenger epitomizes the challenges of media today. Despite touting the perfect recipe for news media audience engagement, the company failed to make significant headway. But it’s not alone when it comes to failing media efforts. A handful of media companies are laying off staff and dealing with declining viewership. In this regard, today’s media environment is something of a puzzle. And getting the right pieces to fit is proving to be quite difficult.
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The Media Industry by the Numbers
As noted, the recent news media startup struggles aren’t necessarily new. Since the mid-2000s, the industry has seen significant declines from consumers. This not only involves drops in daily circulation numbers but likewise digital site visits and duration of viewing. The declines have been steady during this time period, and year-to-year drops continue. For example, between 2021 and 2022, daily newspaper circulation fell roughly 10% to 20.9 million. This included both paper and digital news media audience engagement. In fact, unique digital news media visitors dropped by 20% during this time period. And the time spent on media sites fell substantially as well. At an average of only 1.5 minutes per site, engagement times fell by 43%. Based on this, it’s clear that challenges extend to all within the media industry and not just startups.
Part of the problem related to news media startup struggles involve an inherent lack of revenues. Even with significant funding investments, lack of revenues in a timely manner undermines survivability. Digital ads for news media now account for half of all ad revenues, which continues to be a significant revenue driver. But like news media audience engagement, digital ad revenues have also decreased. These went from $11.6 billion in 2021 to $9.8 billion in 2022. These declines are why many media organizations including Time, Sports Illustrated, and others are having to make cuts. Layoffs are becoming increasing common in the industry as statistics paint a gloomy picture for the immediate future.
The Rapid Rise and Fall of The Messenger
When it comes to envisioning news media startup struggles, the Messenger offers a poster-child example. The website media’s founder, Jimmy Finkelstein, was certainly not a novice when it came to the modern media industry. In fact, his entrepreneurial experiences in media include successful publications like The Hill and The Hollywood Reporter. Finkelstein sold The Hill in 2020 for $130 million. Thus, he carries clout in the media industry. Therefore, when he claimed to have a bold new approach to news media audience engagement, people listened. Actually, they did more than just listen given that Finkelstein was able to raise $50 million in startup investment funding. The promise of a fresh approach to media including non-partisan and unbiased content sounded good on paper (and digital!). But the reality turned out to be something else.
In less than a year, the Messenger lost about $38 million while only generated $3 million in revenues. Despite plans to hire 550 elite journalists and earn $50 million annually, things turned out different. There was some noted internal conflicts between staff and management. The pressure to mass produce content that kept pace with the competition also created an undesirable work environment. But most notably, the strategy wasn’t one that allows the Messenger to create true news media audience engagement. Instead of reaching their potential customers directly, the Messenger relied on social media and technology platforms. Their news media startup struggles therefore stemmed from a misdirected approach to gain readership. Spending was high, and ad revenues and subscriptions low. And that’s a bad recipe for success.
Finding a Better Strategy for Modern Times
When it comes to the pursuit of news media audience engagement, techniques of old aren’t likely to work. For one, social media with its rapid fire, personalized news feed have secured a major share of viewer/readier attention. Combined with an ADHD-type of approach to information gathering, traditional paper and digital media face significant hurdles. These developments are having widespread impacts on media audiences, which contributes to news media startup struggles. The days were massive amounts of media consumers flock to a few isolated sites are rapidly declining. And that includes major media publications like The New York Times and The Wall Street Journal.
So, what’s the solution to current news media startup struggles in such an environment? Debate exists in this regard, but one potential strategy involves a more targeted approach to attract audiences. Because large numbers of media consumers coming to one site will decline, ad revenues will as well. In fact, they already are. As such, organizations should focus more on news media audience engagement in an effort to drive (and keep) subscriptions. How can this be accomplished? By providing quality over quantity, and by delivering niche content and media content in a more personalized way. This will naturally attract fewer consumers per product, which means ad revenues may be less. But such a strategy will drive consumer loyalty and brand reputation to fuel growing subscription revenues.
This may not be the entire answer to news media startup struggles, but it is one that best aligns with the current climate. In order to thrive (if not survive), startups must target news media audience engagement from the beginning. And in all likelihood, seeking mass followings will continue to be futile for startups and tenured media organizations alike.