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Some good news, and some bad news, in Reuters’ annual report

June 23, 2020 | By Rande Price, Research Director – DCN @Randeloo

Each year the Reuters Institute publishes an analysis on the state of the digital news ecosystem. The Digital News Report is vast, covering six continents and 40 markets across the globe. This year’s report explores the impact of coronavirus on news consumption and on the economic prospects for publishers. It looks at progress on new paid online business models, trust and misinformation, partisanship and populism, and the popularity of curated editorial products like podcasts and email newsletters.

The report provides a comprehensive review of the marketplace and incorporates and tracks core consumer metrics of trust and engagement. In particular, it offers insights into digital news publishers’ business models, their sustainability, and the overall impact on modern society.

Political polarization

With the rise and distribution of low-cost internet publishing and its usage to fuel political polarization, the news media as a whole has been called into question. Unfortunately, extreme viewpoints intensified by social media algorithms and the amplification of echo chambers produce a lot of noise and misinformation. Consequently, divided societies trust media less, as they are generally dissatisfied with institutions in their countries.

This type of dissatisfaction is reflected in the data with only four in ten respondents (38%) trusting news overall. However, close to half (49%) trust the news brands they know and use. Further, news in distributed environments (search and social) are trusted the least at 22%. Not surprisingly, social media leads as the biggest source of concern about misinformation (40%), twice the level of news sites (20%).

With a surge of politicize news sources, respondents want the facts. Close to two-thirds of Americans (60%) prefer to get news from sources that have no point of view compare to 30% who prefer to get their news from sources that share your point of view or 10% who prefer to get news from those who challenge their views.

Paid content

Many publishers added new opportunities for paid content to their business model, such as subscriptions, memberships, donations, and micropayments. Growth in subscriptions continues with 20% of respondents in the US paying for online content, up four percentage points in the last year.

Reuters identifies two waves of subscription growth in the U.S. Wave 1 was set in motion by the younger and more liberal voter population in 2016 who subscribed after Donald Trump was elected as president. This segment wants to be informed and to support journalism as a tool to maintain democracy.

The second wave is upon us now. It is fueled by a new election cycle and tighter restrictions around paywalls and what content is available for free. News publishers also experienced growth in new subscribers with the onset of the coronavirus. And that comes, despite many of them offering free Covid-19 content.

Access points

With more pathways to news content, just over one-quarter of consumers (28%) report accessing news websites or apps directly. Another 26% access via social media and 25% access through search. However, among 18-24-year-olds, only 16% have a direct connection with news brands. More than twice as many (38%) prefer social media for their news. Developing a relationship with Gen Z is an important target for publishers’ long-term sustainability.

News surge

Overall, the majority of consumers report that the news media did a good job in helping them understand the details of the pandemic. However, close to one-third (32%) reported that the news media sensationalized the seriousness of the situation. The coronavirus also showcased the need for local news, however long-term demand (and support) is in question.

With quality journalism in demand, digital news publishers must be highly consumer focused. Given that close to three quarters of consumers using backdoors to access their content, publishers need to increase their focus on brand value and customer experience. The 18-24-year-olds are a focal point for growth. And fostering a relationship with this younger demographic holds strong promise for news brands.

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