Digital-native outlets in Europe are more pragmatic than innovative, report suggests – Nieman Journalism Lab at Harvard

Digital-native news outlets in Europe tend to be more focused on delivering quality journalism than on creating new business models or innovating about ways news is presented, according to a new report from Oxford’s Reuters Institute for the Study of Journalism that studied 12 online startups in Francuhe, Germany, Spain, and the United Kingdom.

The report — written by Tom Nicholls, Nabeelah Shabbir and Rasmus Kleis Nielsen — says that European startups tend to be launched by journalists who’ve often had long careers at traditional news organizations before deciding to strike out on their own.

“Although digital born, they seem to have started more frequently with disappointment with the state of journalism (and a commitment to do better) than with wonder at the technological or commercial possibilities of digital media,” the study says.

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Startups in all four countries tend to be smaller than their traditional counterparts. However, digital news orgs in France and Spain tend to be more prominent than startups in Germany and the United Kingdom, where newspapers and legacy media outlets are stronger.

“New journalistic ventures seem to have found the most success where old ones are weak, rather than where digital media are most widely used or where the online advertising market is most developed,” the study found.

The report identified three primary business models for these European startups: advertising, subscriptions, and crowdfunding.

In Spain, advertising composes the bulk of El Confidencial’s revenue. The for-profit site, which launched in 2001, says that 90 percent of its revenue comes from advertising. El Confidencial executive director Alberto Artero:

Our most important source of revenue today is still advertising, to tell you the truth. We have two sources: pure advertising, which is programmatic, and native advertising, an area in which we invested this year and which is [making] a lot of money. We also organize some events, but events (like round tables) are less than 10% of the whole turnover. The industry we are looking towards is via brand content, events, even subscription. We have a high cash position; we don’t have debt. We’re making money.

Mediapart, in France, is pursuing a subscription model; the report calls the investigative site “a trailblazer for subscription-based digital-born news media.” When it launched in 2008, Mediapart’s goal was to attract 50,000 subscribers. It now has 128,000 subscribers — 123,000 individuals and 5,000 group subscriptions — and 96 percent of its revenue comes from subscribers:

The site has experienced considerable churn in its subscriber base, explains [co-founder and director-general] Marie-Hélène Smiejan —’There are 360,000 people who have paid for Mediapart at least once’ — but also continues to attract new paying readers. ‘There is not a single day where we haven’t recruited new subscribers; we always have done, every day — 100, or 300, 600, or 1800.’ Mediapart argues that their investigative scoops have been key to attracting subscribers. ‘Yesterday we published a huge scoop on Sarkozy, and got 300 new subscriptions,’ says François Bonnet [IDENTIFY]. ‘After the story was repeated on evening television, we saw a new peak in subscriptions. I’m obsessed with checking subscriptions. You see an immediate impact.’

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The report cites the Dutch site De Correspondent as a leader in the crowdfunding realm. In 2013, the site raised more than €1 million from 15,000 people. De Correspondent now has more than 47,000 subscribers.

In Germany, Krautreporter raised nearly €1 million from more than 15,000 individuals when it launched in 2014, but it now has only about 5,000 paying members. The French site Les Jours attracted 1,500 subscribers and raised €50,000 in its first week of pre-launch fundraising. It ultimately raised €80,000, said co-founder and CFO Augustin Naepels “[It’s] not at De Correspondent’s level, but for France it is unusual to raise such a high sum,” he said.

And before it launched last year, El Español raised €3.6 million from 5,624 individuals. One of the factors that contributed to its success was the high profile of its founder, Pedro J. Ramírez, a co-founder of the newspaper El Mundo who was fired from the paper after the Spanish prime minister accused him of slander.

Deputy editor María Peral said Ramírez’s history of independent journalism helped define the site and gave readers an understanding of what they could expect from El Español:

Pedro J. is successful because he discovered many things about our Spanish history. When El Mundo published on the the government’s illegal party finances, he was fired. Even if you don’t agree with him, you have to recognize his work in changing our country. We have certain ideas for changing our country and reforming institutions.

The full report is available here.

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