Monetising the next generation of news consumers

In March, we launched Next Gen News – a research project conducted in partnership with the Medill School of Journalism to better understand the future of news consumption in 2030. To achieve this goal, we interviewed young consumers from Nigeria, India, and the United States to identify the news needs and preferences of the next generation.

Whilst this research has helped us to build a better picture of the ideal news experience for future generations, as one event attendee pointed out, it didn’t examine the underlying economics of meeting the needs of young people:

“I look at the calls to action and it feels to me like this was exactly the approach that was delivered by Vice News, Buzzfeed, and those businesses ultimately grew and failed - they proved unsustainable… So I wonder whether the recommendations all sound good, but actually, it’s impossible to build a sustainable, scaled business by doing what you are suggesting?”

This challenge is valid. Our research (by design) didn’t examine the business model implications of a change in tact, which is an important consideration given the cash-strapped position that many news media organisations are in.

In this article, I want to reflect on that question and explain why I believe that taking into account the needs of the next generation now is a smart move for news organisations moving forward.

It is a common misconception that young people are unwilling or unable to pay for news. This misconception results from an industry bias to focus on traditional news providers (e.g. mainstream brands) and a conflation of print and online statistics. INMA has previously provided evidence to debunk this misconception:

• Americans aged 16-40 are “more than twice as likely to pay for or donate to email newsletters, video, or audio content from independent creators (47%) than to traditional sources like print or digital newspapers (22%).” (API, 2023).
• 19% of 18-34-year-olds paid for online news compared to just 13% of those who are 55+. (Reuters Institute Digital News Report)

These statistics suggest that young people are willing and do pay for news. It isn’t the consumer that is ‘broken’, but the product itself. Young people are actively paying for non-traditional forms of media that are more closely aligned to their ideal news experience (for example, alternative sources, niche topics and experimental formats). For example, Nebula and Patreon offer a home for video and audio first news creators that are more popular amongst the younger generation. Nebula now has at least 650,000 subscribers as of November 2022.

Even this paragraph contains a common misconception - that reader revenue is the only way to meaningfully monetise this audience segment. Although display advertising is often shunned by Gen Z, they are more likely than their older peers to make purchases when content-led advertising interests them (Mx3, 2023); therefore there may other ways that news organisations can go about generating revenue from these groups (read more about opportunities for revenue diversification in our latest report).

Decades of research have shown that young people are often accurate bellwethers for broader shifts in society, including changes in information consumption, technology use, and social norms. You only have to look so far as smartphone and social media adoption between 2012 and 2021 to see that they were trendsetters for the overall population (Pew Research, 2023). The same is true in the context of news. In 2012, younger consumers were disproportionately accessing news online using smartphones and social media. Today, that is the norm across all age groups. Emerging research has also suggested that older adults are adopting TikTok for news consumption at similar rates — though to a lesser extent in absolute terms — to their younger counterparts. The same goes for the rise of podcasts and paid podcasts (Reuters Institute, 2023). This suggests that there can be significant knock-on benefits to catering to the needs and behaviours of the next generation of news consumers because other audiences will likely follow suit (and are easier to monetise).

There have been many dissections of Buzzfeed and Vice News and the reasons behind their precipitous rise and fall - however, few would argue that their journalism or target audience was to blame. As Colin Morrison (author of Flashes & Flames) argues: “the two burned-out companies consistently lacked a coherent business model. In a ‘Field of Dreams” way, they were piling up an audience in the expectation that monetisation would come.”

The lack of a coherent business model, strategy to convert social fly-by traffic into genuine audiences, overreliance on platform algorithms and extremely ambitious VC-backed growth targets is what undermined those organisations (you can read more about that here).

In the past, a ‘scaled’ news organisation was essential for creating and distributing high-quality, differentiated journalism. Many organisations are still designed for that era - where the competitive landscape was different and more employees meant greater economies of scale.

There is evidence that major changes to the information ecosystem and technological advancements (including artificial intelligence) may enable smaller organisations, lower operational overheads and high-quality journalism to be distributed at a global scale. For example, Jack Kelly and TLDR News is an 11-employee Youtube-native organisation that is profitable with nearly £1m annual turnover that is targeted at under-35 year-olds.

Although original reporting, especially in hard-to-reach locations (e.g. conflict zones), will continue to be expensive, artificial intelligence may help improve journalists' effectiveness by reducing time-intensive tasks (e.g., reviewing long dossiers of information or creating multiple formats for the same piece of content).

Our call to action is for news producers to act now to meet the needs of the next generation of consumers. That doesn’t mean pivoting your entire organisation to a new way of thinking, but it does mean starting to do something different. In response to the question at the event, I advocated for a portfolio approach - beginning with something small (e.g. a new podcast or newsletter) that is explicitly designed with emerging consumer preferences in mind.

As A.G. Sulzberger explained recently - “We’ve really worked hard not to ever have a pivot at the New York Times. And instead, we’ve worked really hard to cobble together a collection of insights that integrate into an increasingly complex operation. And why is it increasingly complex? Because the ways people are engaging with journalism are increasingly complex.”

This is what we are advocating for - immediate action over a sustained period - to adapt to emerging news behaviours and preferences. This approach should deter fears of irreparable damage to the existing business model or audience engagement.

Monetising younger audiences is, by no means, as straightforward as older audiences who have disposable income and a more ingrained news habit. But that doesn’t mean that we should give up on younger audiences. This group are the audiences of the future and there is good evidence to suggest that sustainable business models can be built with these audiences in mind. We encourage the industry to move now in the direction of the ideal news experience for future generations with a firm belief that it is one of the best ways to ensure future financial sustainability.