This year’s Digital News Report from Reuters is based on a survey of over 75,000 online news consumers in 38 countries. It gives us some timely insights into digital news consumption around the world, and the key media industry trends to watch for this year.We’re going to focus on the following areas:

• The state of new paid business models
• Trust issues
• News avoidance
• Continued growth of smartphones and shifts in first contact
• The success of podcasts
• The return of aggregators

Read on for a summary of the report’s key findings and a breakdown of what publishers really need to know for 2019 and beyond.

“This year’s report comes against the backdrop of rising populism, political and economic instability, along with intensifying concerns about giant tech companies and their impact on society”

News organisations have been on the front line reporting on these trends, and have inevitably been disrupted by them in turn - adding to the already tumultuous decade inflicted on the media by the digital and mobile revolution.Let’s take a look at six key trends unearthed by the report.

Media Industry Trends from the Reuters Digital News Report

1) Peak subscription?

Over the last few years the power, efficiency and reach of social platforms has undercut the revenue models of news companies and left many struggling to survive.This has lead to a “pivot to paid” - publishers increasingly shifting focus toward membership products, subscriptions, donations and other ways to financially support quality journalism without relying on unpredictable platforms or the increasingly tough advertising business.Despite a lot of effort spent driving up alternative revenue sources, and readers seeing more paywalls than ever over the last year, the report shows that these efforts have met with mixed results.Richard Fletcher, a research fellow at the Reuters institute writes that:

“This year’s survey finds only a small increase in the numbers paying for any online news”

He goes on to note that large organisations like the New York Times, Financial Times and the Guardian have had some growth and demonstrated the viability of alternative revenue models. Even so, challenges remain and there could be a bumpy road ahead.Growth is only really happening in a small handful of countries - especially in Scandinavia. Norway saw a 4% increase to a 34% total, and Sweden’s paid news consumption grew to 27%.In the US, paid news consumption has remained stable at 16% after strong growth in 2017.Unsurprisingly, in the US people with higher incomes, education levels and interest in the news are the most likely to pay.

Reuters, 2019[/caption]Even in this demographic, the majority only pay for one subscription - this is leading to a winner takes all dynamic and doesn’t bode well for smaller publishers.

“The average almost never exceeds one, regardless of what group you look at. Even among those who are most interested in news, the wealthiest, or the most educated, most people only pay money to one news organisation. This point matters because, depending on the way subscriptions are distributed among different publishers, it may mean that only a small handful of those that are currently available will be able to attract enough paying subscribers to survive”

Most consumers remain reluctant to pay........

[caption id="attachment_7081" align="aligncenter" width="1020"]

Reuters, 2019[/caption]And despite the efforts of publishers to retool for ‘subscription first’ models, the total number of consumers paying for news has remained fairly static for the last six years.[caption id="attachment_7085" align="aligncenter" width="1123"]

Reuters, 2019[/caption]Even so, some commentators worry that this is the best that we’re going to get…...

“Some in the news business worry that, even though subscriber numbers remain low by some standards, we might already be close to reaching an upper limit. Others fear the emergence of subscription fatigue”

Subscription fatigue is the phenomenon of consumer frustration in a world where seemingly every company wants a few dollars a month out of them. This makes sense in an era of Netflix, Spotify, Amazon and others - and many worry that smaller news organisations will increasingly struggle to compete.Despite the lukewarm growth of the total amount of people paying for any news, a positive finding is that most payments are now ongoing while one-time payments have stagnated.If this trend continues and consumers become more open to the idea of paying for quality online journalism - like they already are when it comes to print - it could lead to a path of sustainable growth. But from the data today it’s unclear whether most people will ever be prepared to pay for the kind of content that they now expect to access free of charge.Read more: all you need to know about in-app purchases.

2) Trust issues continue

Nic Newman, Research Associate at Reuters Institute for the Study of Journalism, explores the issues of trust and attitudes to news media uncovered by the report.

“Overall trust in the news is down 2 percentage points (all market average) from 44% to 42%, with trust in the news people use themselves falling below 50%”

Trust in news found through social media and search is even lower.[caption id="attachment_7087" align="alignnone" width="1721"]

Reuters, 2019[/caption]We can see significant differences at a national level.Some nations broadly trust the media, like Portugal (58%), Denmark (57%) and Finland (59%). In others like Korea (28%), Greece (27%) and Hungary (28%) the picture looks more bleak.Some of these countries seem to have negative perceptions of the media, considering news organisations as in some way corrupted by political and business elites.If we take a look at how attitudes have changed over the last few years though it seems like a growing trend.[caption id="attachment_7090" align="aligncenter" width="1027"]

Reuters, 2019[/caption]What is causing this?Events, my dear boy, events?Major sociopolitical events like Brexit in the UK and the Yellow Vests in France have caused a portion of the public to question the objectivity of the media which in turn weakens their trust. This is most obvious in the French case - where trust levels fell 11% to a dismal 24%.That said, even countries that have not experienced major upheavals lately - like Finland and Germany - show a worrying picture of decline. The specific reasons for this aren’t immediately clear, but media professionals should take note of these trends and look for pathways to renewed trust.Looking at the above chart, we can see that total trust in the US has remained stable. But the total figure hides a deeper trend.

• Among those who self-identify as being on the left of the political spectrum, we see an increase in trust levels of 18% - as they rally behind liberal media outlets under the Trump administration.
• When it comes to those self-identifying on the right - we see trust levels plummeting to just 9%, as distrust grows due to perceived media bias against the Trump administration.

[caption id="attachment_7107" align="aligncenter" width="1034"]

Reuters, 2019[/caption]The UK shows a different picture. Trust has fallen on both the left and right, with the population in general dissatisfied with Brexit coverage, and the trust gap actually narrowing across the political spectrum.[caption id="attachment_7091" align="aligncenter" width="937"]

Reuters, 2019[/caption]

Misinformation and Fake News still a significant public concern

“More than half (55%) of our sample across 38 countries remains concerned about their ability to separate what is real and fake on the internet”

The most significant levels of concern are in Brazil (85%), South Africa (70%), Mexico (68%) and France (67%).Countries that are less politically polarised show lower levels of concern - like Germany (38%), and the Netherlands (31%).The UK (70%) jumped the most by 12% - which could be due to the British media breaking regular stories about misinformation on social media along with a well publicised parliamentary inquiry into the issue.

More discerning news consumers?

One could be forgiven for thinking that this year's report is all doom and gloom - but there are encouraging developments too.This is one of the media industry trends that looks pretty positive:

“One consequence of this concern seems to be a greater awareness and affinity with trusted news brands. One positive finding of our report this year is that over a quarter (26%) have started relying on ‘more reputable’ sources of news”

A significant portion of the global audience is becoming more discerning about what kinds of news they interact with, and are becoming more critical news consumers.[caption id="attachment_7092" align="aligncenter" width="833"]

Reuters, 2019[/caption]This suggests that initiatives to increase digital literacy and high profile coverage of fake news and misinformation are having an effect. The change though is more significant among the highly educated and there is a generational element that isn’t consistent across countries. For example in the UK younger groups have changed the most whereas in the US it’s older demographics.This trend ties in with the loss in trust of the media in general, and could lead to higher levels of audience loyalty and engagement for publishers who can prove their integrity and impartiality.It also ties into the “winner-takes-all” single subscription phenomenon discussed earlier - and suggests that established publishers who’ve ruthlessly maintained good reputations will benefit while it may be more difficult for newcomers to get a foothold.

    3) News Avoidance

“More people say they actively avoid the news (32%) than when we last asked this question two years ago. Avoidance is up 6% overall…….. This may be because the world has become a more depressing place or because the media coverage tends to be relentlessly negative – or a mix of the two”

This phenomenon can be seen starkly in the UK, where avoidance is up by 11%. British respondents said that they avoid the news because it makes them feel powerless or negatively affects their mood.[caption id="attachment_7093" align="aligncenter" width="1020"]

Reuters, 2019[/caption]Brexit fatigue is the most significant factor.[caption id="attachment_7094" align="aligncenter" width="950"]

Reuters, 2019[/caption]

Overloaded

28% feel worn out by too much news these days, and the constant buzz of different perspectives makes it hard to know what’s really happening.Perceptions of overload are highest in the US (40%) with its large and arguably partisan media, and lower in countries like Denmark (20%) with a lower number of news organisations.

Is the media doing its job?

Globally, most agree that the media is helping them to stay up to date, but only half think that news media helps them to actually understand current events.[caption id="attachment_7095" align="aligncenter" width="1019"]

Reuters, 2019[/caption]We can also see that only a minority believe that the media properly holds the powerful to account.These trends in public perception may provide an opportunity to engage more with audiences by providing more in-depth explanatory content. Vox has built a great reputation with this and is popular with younger audiences craving a deeper understanding and perspective.Many publishers like Republik and De Correspondent have launched “slow news” initiatives and others are focusing on solutions-based journalism like BBC World Hacks and HuffPo.

4) Smartphone Use and First Contact

Although global smartphone sales are slowing down - with a 2.7% drop in the first quarter of 2019 - our reliance on them for news shows no sign of slowing.

“Two-thirds of our combined sample (66%) now uses the smartphone for news weekly, with usage doubling in most countries over the last seven years”

[caption id="attachment_7096" align="aligncenter" width="1037"]

Reuters, 2019[/caption]In the UK, accessing news via smartphone overtook doing so by computer in 2017 - and the gap has widened since. In the US however,[caption id="attachment_7097" align="aligncenter" width="939"]

Reuters, 2019[/caption]The report also digs in to how smartphone first consumers make their first contact with news content.[caption id="attachment_7098" align="aligncenter" width="1031"]

Reuters, 2019[/caption]We can see stark differences here between the two major Anglosphere markets. In the Uk 43% make first contact with news directly - driven mostly by the success of the BBC News app.In the US the picture is different. Mobile (23%) first contact is up from 2017 (17%) - but TV (33%) is still ahead. Among smartphone first Americans significantly less (20%) access first through news apps, favouring social media (43%), aggregators (11%) and email (8%) when compared to the British.This suggests that there could be room for growth in the news app space for US publishers, especially if the overall trend toward mobile continues.

Notifications

When it comes to first access through notification - the US (10%) and the UK (11%) are equal. The two most common triggers are email and mobile notifications. Mobile notifications are showing the real growth though - rising from 3% to 20% in the UK and from 6% to 19% in the US over the last five years.[caption id="attachment_7099" align="aligncenter" width="990"]

Reuters, 2019[/caption]

“Email remains extremely effective with older, highly engaged news users, even if overall usage has not grown over the last five years. By contrast, mobile notifications tend to be used by younger groups”

Notifications are an important tool for building news habits that boost retention and engagement. Considering their popularity and effectiveness together with the relentless growth of smartphone usage - we can assume that having a direct line to readers homescreens through push notifications is a very useful trigger for engaging audiences.

5) The Pivot to Audio is Accelerating

“Podcasts have been around for many years but these episodic digital audio files appear to be reaching critical mass as a consequence of better content and easier distribution”

An impressive 36% of the report’s sample said they’d listened to at least one podcast in the last month, a jump of 2% from 2018 - and nearly half (15%) of podcast consumers listened to one about news, politics, or international current events.There's no doubt that the rise of podcasting is a media industry trend that will have a great impact over the next few years.News publishers have invested heavily in podcasting over the last year, with many big brands like The Guardian, The Economist, Politiken, Washington Post and others launching daily shows in 2018.Spotify and other big platforms are also investing heavily in the medium.The report also hails the success of the New York Times in growing the Daily to around five million daily listeners and perhaps is the world’s most popular podcast.This has undoubtedly raised the bar when it comes to the quality of podcast content, but as money flows into the space in the wake of mass adoption - some worry that podcasts are losing their “purity”.Advertising is becoming more intrusive, premium content is on the rise and some publishers like Politiken have started to restrict some daily content to subscribers only. As the space matures it seems likely that more publishers will begin to challenge the culture of free in the audio medium as well as print.The report also shows that podcasts are far more popular in some countries than others, with Korea taking the lead (53%), and the UK trailing the field at 21%.[caption id="attachment_7100" align="aligncenter" width="876"]

Reuters, 2019[/caption]The report also explores who listens to podcasts and how.

“The most striking aspect of podcast consumption is the appeal to younger people”

Sweden and the United States are some of the largest markets for podcasts, and in both countries over 50% of under 35s listen to podcasts monthly compared to less than 20% of over 55s.Unsurprisingly, the majority listen to podcasts through their smartphones (55%), Laptops (27%) or tablets (26%) - but a significant minority are embracing audio through new technologies like Smart Speakers (8%) and Wearables (4%).

“Podcasts carry many of the same benefits as radio – such as multitasking and ease of use – but they have characteristics of their own which are enhancing audio storytelling and engaging new groups”

The report goes on to suggest that the swift adoption of voice activated speakers like Google Home and the Amazon Echo is helping to fuel the growth of Audio content. It’s worth noting though that news consumption is lower on the list of uses than traditional audio applications like music and checking the weather.It’s clear that podcasts are having their moment, and they’ve revolutionised a format that’s been relatively static for a generation.

“Business models are still emerging but the evidence in this chapter about the underlying drivers of this change suggest we are a long way from reaching peak podcast”

6) Aggregators Return

News aggregation is nothing new, but seems to be growing in 2019 - with the 2018 relaunch of a more AI driven Google News, the continued success of Apple News, and the integration of aggregation tools like Upday and Flipboard into Android’s core OS.

“We are seeing a significant, if relatively modest, shift towards mobile news aggregators”

[caption id="attachment_7101" align="aligncenter" width="1029"]

Reuters, 2019[/caption]The report also suggests that consumer frustration at seeing more and more paywalls and the ‘subscription fatigue’ mentioned earlier could push them towards the aggregators.News aggregation is already the norm in Asia.

“Yahoo! News reaches two-thirds (66%) of smartphone users in Japan each week, Naver reaches 73% of smartphone users in South Korea, while Line Today reaches 47% of our Taiwanese sample”

They’re also a force in European countries - with mobile aggregators claiming significant portions of the Italian (17%), Norweigan (18%) and Swedish (12%) markets.There looks to be significant room for growth in the USA, UK and other western nations.This trend promises reach and attention but comes with strings attached - so many publishers are wary.Although Google News, Flipboard and others drive traffic directly to publishers - others like Apple News publish full stories in exchange for revenue sharing. The loss of control and prospect of revenue cuts are especially troublesome when taken against the backdrop of other woes facing the industry.That said, aggregation is still a less common way to access the news than search, social and direct so the trend shouldn’t be overestimated.

Conclusion

The publishing industry is clearly at a crossroads. With the mass of free content of varying quality online, the industry is looking to new ways to cover the significant cost of high quality journalism.As we’ve seen, the subscription model has met with mixed results, but it’s still early days and a shift in consumer behavior is possible over the coming years.Trust is a key issue. Increasingly polarized politics and a high profile backlash against ‘fake news’ make it a hard environment in which to build trust. Loyalty and direct communication with audiences will remain key - so we can expect a gradual build up of more immersive experiences like podcasts, live events and native apps.Audio in particular looks promising, with the younger generations turning to podcasts as a way to stay informed while at the gym, on public transport or while relaxing in their homes.At the same time, the industry needs to think hard about how to counter increasing news avoidance in key markets - and the road there is not yet clear.The road forward will be a challenging one - with publishing one of the key industries disrupted by the digital revolution - but with so much talent working toward such a vital goal there is surely a pathway to sustainable, quality and profitable journalism within reach.We hope you've enjoyed reading about all the key media industry trends uncovered in the report.Check out the report for a treasure trove of insights.