Innovative ways of financing print media and finding ways to reduce costs in the context of media convergence

Baranova Ekaterina Andreevna ORCID: 0000-0003-1794-9936 Doctor of Philology Professor, Department of Communication Management and Relationship Management, RSSU 4 Wilhelm Peak str., Moscow, 129226, Russia kat-journ@yandex.ru Other publications by this author

With the emergence and development of various types and types of media, their business models have evolved. "The development of periodicals in the XVII – XIX centuries laid the foundation for the formation of the main types of newspapers and magazines. In the XX century, this process continued and led to the creation of a modern system of established types of publications adapted to the conditions of the market environment" ^{[1, p. 24]}. The main factor was the advertisers' request. It is customary to talk about advertising as the main source of income of print media from the moment when in the XX century, in almost all consumer sectors, mass production became paramount and, accordingly, there was a need to promote goods and services. Thus, in countries with market economies, advertising has been providing income to print media for a long time. Prior to that, for almost 300 years, the business model of print media "was built almost exclusively around the sale of circulation to end consumers, readers, in most cases exclusively through subscription, ... it was this revenue item that remained the main and determining the profitability of projects" ^{[2, p. 13]}.

However, media convergence has become a process that may soon change not only the structure of mass media in different countries, but also the entire media economy ^{[3, p. 286]}.

The process of media convergence that began at the end of the XX-beginning of the XXI century led to large–scale changes taking place not only at all stages - from creation to distribution of content, but also to the search for other models of media business financing.

According to the annual survey, which was attended by 1800 editors-in-chief and top managers of the world's leading print publications from 107 countries, more than 70% of respondents are ready to look for non-standard sources of income, in addition to advertising and content sales [Industry Report. Russian Periodical Press, 2018. URL: http://www.fapmc.ru/rospechat/activities/reports/2019/pechat1.html (accessed: 01/26/2022)]

Media convergence and new sources of media financing

"Media convergence is a process taking place in the modern media space, which began in the second half of the 1990s, at the time when the media began to create their own Internet sites; it is associated with technical advances in the field of transmission and storage of information and leads to the merger of previously different media (based on an Internet platform and/ or convergent editorial board), departments and divisions of the media company in order to jointly produce content and replicate it on different media platforms; it led to the emergence of new types of media, new genres and forms of content provision, as well as to global changes occurring at all stages – from creation to distribution of content, and the search for other models of media business development" ^{[4, p. 20]}.

With the development of media convergence, the emergence of online media, new sources of financing have emerged, which have gone through a rapid development path in less than a decade ^{[3, p. 304]}.

Thanks to the introduction of new technologies, the models of selling content to end consumers have also changed, digital content has become an object of sale on various media platforms. To date, the world's media has extensive experience in creating and distributing paid content on websites. The following models of organization of paid content on the site can be distinguished ^{[5, pp. 120-122]}:

1. Access to all materials of the site is paid. "Times" ('Times'), "Wall Street Journal" ('Wall Street Journal') provide access to materials on the site only through payment.

2. Hybrid model. It involves a combination of paid and free content ("freemium" and "premium"). The main content is provided free of charge, and those users who have a premium account have access to more complete information about events, access to the archive, special offers, etc.) The premium account is available to users for a fee.

3. Paid and free content on two sites. "Boston Globe" ("Boston Globe") has been using two sites for content distribution since 2011. Paid website BostonGlobe.com It contains news, articles, comments, analytics, photos published in the daily and Sunday issues of the newspaper. Boston.com at the same time, it is a resource where information is published that is available without a separate fee.  The site does not contain all the content of the printed version. It has news, a guide to the world of entertainment.

According to experts, leading English-language newspapers (American "New York Times" ("New York Times"), "Wall Street Journal", "Washington Post" ("Washington Post"), "Los Angeles Times" ("Los Angeles Times"), "Boston Globe", British The Financial Times, The Times and the German newspaper Die Welt have significantly increased the number of people who purchase subscriptions using the soft (metered) or full paywall model in just a year. [Industry Report. Russian Periodical Press, 2018. URL: http://www.fapmc.ru/rospechat/activities/reports/2019/pechat1.html (accessed: 01.02.2022)].

Nevertheless, there are media outlets that have chosen a different path of development. The popular daily newspaper "Guardian" has collected over 800 thousand paid subscriptions without restricting access to its materials [Ibid.]. At the same time, in order to access the content of the online version of the newspaper, the user needs to create a personal profile on the site. Becoming a member of the club, a regular reader of the newspaper, you can make regular donations. So, 300 thousand users of the site are regular sponsors of the publication [Ibid.].

It should be noted that paid content on the site cannot be called an innovative source of media financing, because the same content is sold, only not in a paper version, but in an electronic one.

With the development of the media convergence process, scientists have repeatedly stated that "in order to maintain their stability, traditional media channels should develop new business models" ^{[6, p. 141]}. That is, assuming that you need to sell something else besides the content to the readers / users of the site and the audience - advertisers. There is also an opinion that in the conditions of rapid development of technologies, there can be no single sustainable business model. For example, Finnish media companies still do not understand what will be the main source of profit for the online version of the newspaper ^{[7, p. 43]}. Julia Cage, a French professor of economics, believes that the media business has generally exhausted its monetization potential ^{[8, p. 120]}.

The issue of monetization of the newspaper business in the context of media convergence is becoming particularly relevant. Therefore, researchers often ask themselves the question of finding new business models specifically for the newspaper business, since the existing model of print media in the form of circulation and advertising is disappearing ^{[7, P. 55]}.

According to experts, over the past decade, the share of the press in the global advertising market has more than halved, and the share of the Internet has grown fourfold [Industry Report. Russian Periodical Press, 2018. URL: http://www.fapmc.ru/rospechat/activities/reports/2019/pechat1.html (accessed: 01.02.2022)].

In the Russian Federation over the past five years, over 12 thousand periodicals have left the market. Of course, a significant part was made up of regional and local publications. The main reason for their withdrawal from the market is economic difficulties and the inability of editorial offices to adapt to the current consumer demand [Ibid.].

Innovative ways of media business development

The researchers note that "over the past few decades, innovations – from the Internet and computers to nanotechnology and biorobots – have significantly changed people's lives. The concept of "innovation" is actively used in scientific, political, media ... discourses" ^{[10, p. 117]}. "The topic of innovation in the media discourse remains extremely poorly studied – most of the scientific works devoted to innovation are related to the fields of political science, sociology, marketing, cultural studies and management, although, at the same time, the topic of innovation is actively used in the journalistic agenda" ^{[18, p.174]}.

Having analyzed the scientific literature, having studied the experience of world and domestic print media, we came to the conclusion that the following innovative ways of media business development can be distinguished. By innovations we will understand the introduction of certain innovations, innovations ^{[11, p. 6]}.

1. Creation of online stores on media sites (or online stores – independent sites launched by the media)

Due to the fact that the basis of the media business – the lack of information from people and audience coverage from advertisers – have disappeared, it has become more difficult to sell both content and audience. We have to look for other sales products besides content and audience. Therefore, the media are developing the sale of some goods on the site today. In world practice, there are many examples of creating online stores on the websites of printed publications (or online stores - independent sites launched by the media). Print media have been actively engaged in online commerce since 2013. The Wall Street Journal newspaper was one of the first to launch an online store. On the website www.wsjwine.com you can buy various wines.

As a rule, the mass media launch the sale of any goods in partnership with certain trademarks, specialize in the sale of certain goods. On the website launched by the Daily Mail newspaper in 2016 www.mailshop.co.uk you can see mainly household and garden goods.

Many media outlets sell branded products – goods with the image of the publication's logo.  For example, in the online store of the newspaper "New York Times" you can find branded clothes and notebooks.

Some Russian newspapers also create online stores on websites where they sell branded products. For example, digitized books of various subjects can be purchased on the website of the publication "Arguments and Facts". The project "Books" arose as a result of the cooperation of the ID "AiF" with the company "LitRes" – the largest copyright holder for the use of electronic copies of Russian-language books on the web.

2. Transition to data journalism, i.e. journalism that bases its investigations on data (open and collected by journalists) and on their research by machine methods as a new way of monetization

"In the 2010s, thanks to the active introduction and use of big data for the preparation of media materials, a new direction is being formed - data journalism" ^{[13, p. 136]}. This direction is still a discussion format in the scientific community. Researchers look at data journalism from different angles: as a direction of the media industry, closely related to the development of computer, computational journalism ^[14]; in the perspective of the epistemology of data journalism (the influence of the phenomenon of big data on modern journalism) ^[15]; in the perspective of the topic related to journalistic education (new requirements for training journalists programming, statistics, data visualization) ^[16]; in in the context of the transformation of genre forms of modern journalism ^[17].

For the first time, we consider the transition to data journalism as a new way to monetize the media business. The business model in this case can be built around the sale of the received data to other media and (or) other organizations (for example, research centers). In 2014, a data department was opened in ProPublica, a non–profit news organization known for its investigative journalism. The sale of generated data attracted $30,000 in revenue ^{[9, P. 46]} for the first five months of the department's existence. The total income as a result of the activities of the new division reached $200,000 in 2016 [ibid, P. 46].  The cost of the data varies depending on who buys them. Such pricing policy is carried out in order to combine the policy of publicity with commercial interests. The editorial office charges a one-time fee for data sets, which took a lot of time and effort for the department staff to obtain: in most cases it is $ 200 for journalists and $ 2000 for researchers. Those who want to use the data for commercial purposes should contact the department to discuss the cost. If the customer is not sure whether the premium dataset is suitable for his purposes, he can first download a small sample of the data and a file explaining how to use it for free. The "Propablik" data sets contain extensive information for researchers and journalists. Premium datasets can save scientists months of work.

In addition to selling the data itself, media companies can provide visualization services. During the 2012 Summer Olympics in London, the interactive team of the New York Times turned the raw data of the International Olympic Committee into various charts and graphs to sell them to other media. The Indonesian media company Katadata provides data analysis and visualization services for commercial companies and government agencies. In August 2017, she was commissioned by a government agency to visualize the history of the country's economic development [ibid, P. 46].

3. Introduction of automated technologies as a way to reduce costs

The topic of robotization of journalism has been discussed quite often lately. According to a study by the Faculty of Journalism at Moscow University, journalism students do not yet have full confidence in "inanimate" news [Study: journalists are afraid of losing their jobs due to robotization. URL: https://ria.ru/20191022/1560083378.html (accessed: 01.02.2022)].

Interfax and TASS news agencies have become leaders among the Russian media in the use of computer programs for writing news.Journalists have more time to create non-news stories. The experience of agencies has shown that the implementation of algorithms requires large financial investments. In addition, existing programs are not perfect and make a lot of mistakes. In addition, the programs use neutral vocabulary and do not use any means of expression ^{[12, p. 3]}.

The Washington Post newspaper has become one of the first print publications to use artificial intelligence since 2016. The technology was called "Nonliograf". Already in the first months after the introduction of the technology, the robot wrote more than 1,000 articles on various topics for publication. The idea of creating a robot writer arose from the management on the eve of the 2016 Summer Olympics in Rio de Janeiro. The reason is clear, because the coverage of sports events requires a lot of journalistic time, sports news during the Olympics appear almost every minute. So, in order to facilitate the work of full-time journalists, Nonliograf came to the rescue, who created, published short notes on the course of sports competitions and wrote tweets (short news for the social network "Twitter"). After some time, the artificial intelligence of the robot writer developed and began to cover more important events, including the last presidential race in the United States [Industry Report. Russian Periodical Press, 2018. URL: http://www.fapmc.ru/rospechat/activities/reports/2019/pechat1.html (accessed: 01.02.2022)].

4. Other paid services provided by media companies

In addition to the above methods, which are trying to use print media to reduce costs and generate additional profits, in the practice of Russian and foreign media, we find examples of various services offered by media companies.For example, the allocation of editorial office space for sale for rent. By transferring part of the employees to remote work and renting out the vacant premises, you can earn additional profit.

Since 2009, the publishing house "Ekonomicheskaya Gazeta" has been introducing a number of technical innovations. The editorial and publishing system (RIS) and the document management system not only automated the production process of printed products, but also allowed many employees to switch to remote work. Thanks to this, the holding was able to make an additional profit by renting 150 square meters. The ID believes that this model of work is suitable not only for professional publications, but also for the mass press.

The Texas Tribune has its own platform where events, forums and conferences can be held. Studio 919 is a 1,000-square-foot conference room in downtown Austin, offering inspiring views of historic Congress Avenue, just a few blocks from the Texas State Capitol. Texas Tribune receives up to a third of its revenue from organizing forums and conferences.

There are media outlets that offer a meeting with famous journalists and a tour of the editorial office as a paid service. In the fall of 2017, such a system was launched by the American magazine "Atlantic" ("Atlantis"). Users who have paid $ 12 per month or $ 120 per year, in addition to access to exclusive materials, ad-free web page views and gifts, get the opportunity to get into the editorial kitchen or to meet with famous authors.

Discussion

The examples described above of the search for new goods and services for the sale of mass media to the audience confirm the idea that in the digital economy, traditional economic mass communications are changing, the boundaries between them are blurring, and b2c relations, subject-object relations between business and consumers, the audience are turning into subject-subject relations, acquiring features of equality between the participants of the information process ^{[19, p. 19]}.

The issue of profit from the sale resulting from the use of the alternative sources of financing described above is quite debatable. There are examples of unsuccessful attempts to develop online stores. MK tried to develop an online store on the site as a new source of income, but this project had to be closed. As practice has shown, people prefer large online stores with cheaper prices, since everything is put on stream there.

Komsomolskaya Pravda Publishing House has been selling books under its own brand since 2005. Previously, they could be bought at periodicals outlets and offline stores. The publishing house offers high-quality book collections 4 times cheaper than the market value. These are historical, often rare books, biographies, educational literature, as well as books by Komsomolskaya Pravda journalists. Books are also sold on electronic media. However, after 2014, when the collection boom passed, there was a decline in book sales, many offline stores closed. Komsomolskaya Pravda had 6 offline stores, at the beginning of 2019 there was only one left. Offline stores "lived" very well due to the collection boom, now books are no longer sold in such volume, so other products began to be tested in the publishing house.  At the end of 2018, the range of products in the "Online store" section on the website www.kp.ru noticeably expanded: in addition to books, there were such goods as lawn mowers, lamps, various clothes, cosmetics, etc. The publishing house "Komsomolskaya Pravda" decided that the consumer may also be interested in these products. A year has passed, and it turned out that 95% of sales are books. Also, the "Books" section was the most visited. The ID has completely rolled up the line of other products. New goods accounted for a minuscule share in the turnover. It's easier for people to buy a book from a publishing house than, for example, a refrigerator or a lawn mower. In order to explain to the consumer why it is on the site www.kp.ru you need to buy these products, you need to spend a lot of time and money.

The percentage of sales in the online stores of the publication is not so large as to recoup even half of the editorial expenses.

The editorial offices of the world's media are also cautious about investing their resources in the development of data journalism, despite the presence of a number of examples of monetization of generated data. Most of the leading editorial offices consider it rather as a new way to improve the quality of materials and attract a new audience and advertisers ^{[9, pp. 45, 20]}. For example, the data library on the website of the non-profit newspaper "Texas Tribune" (Texas Tribune) gives most of the traffic to the site. For regional media, the development of data journalism is a catalyst for innovative processes in editorial offices.

However, materials created on the basis of big data analysis take incomparably more time than writing ordinary journalistic texts. It should also be noted that data journalism is developing in a new ecosystem that includes potential competitors for the media – organizations that specialize in providing and visualizing various data. For example, in the UK, a website called "Where Does My Money Go?" provides visualized data on tax expenditures. The American organization "Maplight" provides policy data. Such companies are usually non-profit and supported by foundations.

On the issue of the introduction of automated technologies as a way to reduce costs, there is also no clear opinion yet. The editor-in-chief of the journal "Journalist" L.V. Petrova, believes that expert journalism can also be created by artificial intelligence. However, most researchers believe that in author journalism, a machine is still far from a human being – it will not be able to create new ideas, carry out a workflow in conditions of uncertainty. And it is obvious that at the moment, the machine is not able to build trusting relationships with other participants in the process, besides, other components are needed that are inherent only to people – emotions and soul [Industry Report. Russian Periodical Press, 2018. URL: http://www.fapmc.ru/rospechat/activities/reports/2019/pechat1.html (accessed: 01.02.2022)].

Recent major research in this area suggests that algorithms in Russian journalism are at the first stage of being introduced into the editorial process. Not all media outlets can afford to allocate funds for the development of the program. "The functionality of algorithmic programs for generating news texts is still limited. With the help of algorithms, you can create texts only of a certain subject. In addition, the genre range of such messages is also limited. A computer program can write qualitatively only news notes so far" ^{[12, p.16]}. Agorhythms of behavior of media robots only imitate human speech activity in key phases of production. In general, their social functions are still limited ^{[20, C. 270]}.

Conclusion

The above examples of the search for new products and services for the sale of mass media to the audience allow us to conclude that the issue of finding new business models for the newspaper business remains relevant. The existing model of print media in the form of circulation and advertising is not going away yet, however, it is obvious that it is no longer an axiom for the newspaper business.

The allocated innovative ways of financing, with successful functioning, can become additional sources of income for print media. It is important to understand that the experience of individual mass media cannot always be "shifted" to a specific editorial office. The considered methods of monetization of the media business in the conditions of convergence can only be considered as additional sources of financing for the time being. The profit from their use is not able to cover even half of the expenses of a media company.