ARTICLE: Licence to take risks is key to news agencies’ success

Privately owned news agencies are struggling to survive in ever more competitive markets. New technologies have made information more readily available, undermining the agencies’ competitive edge, Atte Jääskeläinen, of Lappeenranta University of Technology, and Servet Yanatma write. So how come some agencies have been able to remain profitable and even thrive?

Jääskeläinen and Yanatma interviewed 26 managers working at three successful, privately owned news agencies: the British Press Association, the Austrian Austria Presse Agentur, and the Swedish Tidningarnas Telegrambyrå.

All three agencies had come face-to-face with an existential threat early on, with clients abandoning their services in favour of self-produced content. Alerted by the impending decline, the agencies’ managements had turned to their owners for a mandate to diversify. Many of said owners were also the agencies’ (former or current) clients. Good rapport between the managers and owners made it possible for the struggling news agencies to branch out their business – even at a risk to themselves and to their owner-clients.

These new revenue streams were closely related to the agencies’ core competences and benefited from the agencies’ connections and good reputation. For example, the agencies could gain access to their clients’ data, which they could refine into audience insights and sell back to the client.

Further, these new forms of business are better protected from the “free-rider problem” so common in selling raw news information: once the news has been broken, the information can be easily acquired for free. In contrast, access to audience analytics, photographic material and database services are easier to restrict to clients only. Lastly, profit margins in these new services tend to be higher than in text-form news services, Jääskeläinen and Yanatma note.

The article “How do media-owned national news agencies survive in the digital age?” was published by the journal Journalism. It is available online on the publisher’s website (abstract free).

Picture: Untitled by Aymanejed.

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