De staat van de nieuwsmedia

Lars Anderson 0:08

Okay, Philippe, this is already our third show. And today, Philippe, we have a very special guest.

Philippe Remarque 0:15

Yeah. This is a man that I've met over the years as editor in chief and later on, as director of journalism at many congresses of the International News Media Association and also, in other settings. And it always came to my eye that, that this guy knows more than we do about publishing and newsrooms, and especially about how we should navigate the future of publishing. So he's a kind of guru to me. And I'm very proud to have him in the podcast. Greg. Welcome here.

Greg Piechota 0:54

Thank you so much for inviting me. You are very kind. I'm pretty sure you know more about the Netherlands and the Dutch media and the Dutch audiences than I could ever think to know. So.

Philippe Remarque 1:07

Yeah, but you see it internationally and that's, and compare and, you know.

Greg Piechota 1:11

I can be shallow about everything. That's the unique position. You know, it's in some ways researcher's work is very similar to journalism. You know, you are good because you are a generalist, not necessarily because you are a specialist, because you will always be surpassed by somebody like you.

Philippe Remarque 1:31

Greg. To start with, you are from Poland and you have a beautiful first and last name, but we can't pronounce it properly. Could you do that for us with the full name, especially that r z combination of letters?

Greg Piechota 1:47

Of course. No. No problems. This is, you know, this name, Piechota. Grzegorz is the first name. It basically, you know, the legend is it was developed by Polish partisans during the Second World War, and the idea was that Germans would never pronounce it. They would never write it down. There was a comedy show during which the most famous Polish partisan is named Grzegorz. And that's the that's the point. So Grzegorz is my name. Yes. I've been a journalist in Poland for more than 20 years, working as a reporter and then an editor and a news editor running the newsroom of Gazeta Wyborcza. That was the, the biggest newspaper there. And then I switched to the academia. I worked for a few years at Harvard Business School as an academic, studying business models of startups. And then I switched to Reuters Institute at the University of Oxford. And for the past few years, I've been mostly working with the International News Media Association. So we were meeting a lot during different conferences or events that we were organizing.

Lars Anderson 2:51

Greg. There was a lot of ground that we can cover with you because you seem to be an oracle in the news media about basically every topic.

Philippe Remarque 2:59

You always tell us what to do and what to expect. So do you see an upside for news media and the current Trump frenzy and geopolitical shocks? And last time when Trump, ruled in Washington, we had a Trump bump, especially in the American media. Do you expect a new Trump bump?

Greg Piechota 3:19

It depends. So in general, you know, we are collecting data from hundreds of news publishers across the world to understand their performance. And in the past quarter, we have seen, you know, growth in engagement with news. So there is a demand for news also about US elections. But unfortunately, it's not the case that everywhere in the world you could see a spike in conversions to digital subscriptions. So for example, we haven't seen it in the United States. And that's a that's a big surprise. Maybe it's a combination of factors. It's not just that people, maybe some people were tired of news about politics and about Donald Trump because they were still accessing the news. Maybe it's because, you know, the prices went up in many countries, including the United States, that actually we see that subscriptions in the United States were the prices were growing the fastest in the world in the past two years. So maybe they just they just charge too much. And people were not really ready to actually pay extra for this. Maybe they didn't really, they were not thinking that this, presidency will be so different from the first one, from the first term. And I think people are realizing now, so you can again, see increase in demand for news and potentially subscriptions, at least for national news titles. You know, of course, what, what is happening is really is a big change. And, you know, it's obvious that when things change, people want to learn. People want to understand what it means, what's going to happen, and so on and so on. So they are they are searching for quality sources.

Greg Piechota 5:05

So there is an opportunity for journalism. I believe it's a big opportunity. This is what really journalism is for. It's, you know, verification sense making witnessing things. And, you know, there was the this is this is an opportunity, the question of whether you can actually sell more subscriptions thanks to it. I think it also depends on, you know, how do you feel what subscription is for? So during the first term of Donald Trump's presidency, many news titles in the United States, they framed subscription as a sort of a democracy club. So if you support democracy, you should subscribe to us and help us watch those in powers. But, you know, people found a great success in the beginning with that. But over time, they figured, you know, there is a proportion of people who want to subscribe just because they want to be part of something bigger, like a movement, political movement. But there is many people who are actually thinking, I don't want to really, you know, belong to a party or whatever, however you call it. The Washington Post. Maybe there were people who are casual consumers. They just, they just, they're just not engaged in politics that much. They just are interested in general, you know, from time to time when something big happens. But, you know, they mostly read maybe some advice columns and sports news and so on and so on. So publishers started to kind of, steer away from this kind of, very ideological and mission driven pitches and, yeah, and it's, and it's a big question for publishers. What should you do?

Philippe Remarque 6:48

So that's interesting because nowadays, For instance, the Guardian is bombarding me with, with ads and emails saying like, did you see what happens? do you see what happens in America? To the free press? And, this is a time to support our independent reporting, which is, well, smartly done, but so they use that argument very much.

Greg Piechota 7:12

Yeah. So the studies show that if you are looking for, the argument for subscribing with the highest, that basically attracts the highest willingness to pay. It is clearly talking about that this, this, this subscription will support independent journalism that is watching those in power. And we introduce it because the news industry is in crisis. This is proven by academic research, also by researchers from Germany, from the states, from England. This actually works. And many brands find success, but many doesn't mean all the brands. There are brands for which subscribers actually don't appreciate if it becomes more partisan. And the example would be The Wall Street Journal. I have research studies about Wall Street Journal subscribers. They don't want to be members of any club or any movement. They, you know, they, they are very self kind of driven people who believe in their own decision making choices. And, you know, and they want to have a subscription, not a membership in a cause. Yeah. So I would say it probably depends. It's very possible that different brands could see different success with this kind of framing. It is also possible that not every brand would like to be in this business of partisan journalism. Yeah. Like, you know, you can imagine that there are, there are newsrooms, there are brands that want to be associated with more objective kind of reporting, whatever it means.

Philippe Remarque 8:47

Yeah. But supporting democracy can be neutral in a political way.

Greg Piechota 8:51

Yeah. But, you know.

Philippe Remarque 8:53

In the States.

Greg Piechota 8:54

We can endlessly discuss what is democracy if it is an opportunity to vote for people whom you whose ideas you support and a mechanism to change those in power. You know, there is still democracy in the United States, regardless of what have been said in the past month. Yeah. So there are different ideas. What democracy means. This is this is what I'm just trying to say. And, and, and, what it really means is that, you know, different publications have different, they frame their journalism in different ways. Some want to be more activist, some want to be more, you could say neutral, some would like to present, I don't know, multiple sides to the story or multiple perspectives. And some newspapers actually don't allow, you know, like perspectives they don't agree with. And, these are different ideas, you know, and these are different ideas. And it's great, I guess, for the pluralistic society to have different ideas how to report the news. Yeah. There's nothing wrong about it. The question, of course, is, you know, where, when, when those in power actually become part of the media.

Greg Piechota 10:07

And you obviously, you know, when you saw the inauguration of Donald Trump, you saw the biggest media owners in the world actually standing right behind him. You had, you know, the CEO of Apple, CEO of Facebook, CEO of Google, CEO of Amazon. And you could think about them as tech, you know, industrialists, but you could also think that, you know, they own some of the biggest media spaces in the world, these media spaces. You know, we just learned today in, in, in Amsterdam that, out of 70% of advertising spend goes to digital, But out of this, 78% goes to companies such as Google and Meta. And these companies obviously. Make it harder for content media like, I don't know, DPG media to operate in this environment. So these are media companies. This is what I'm trying to say. And these media companies supported this presidency by, you know, putting money to pay for the inauguration by being them, being then present in the room and now potentially changing the rules that the digital platforms, you know, how they operate.

Philippe Remarque 11:27

Yeah, that's quite scary, isn't it?

Greg Piechota 11:29

I think, I think this is a, this is a big challenge for, you know, content media for sure. This kind of collaboration between media and governments, you know, we have we have kind of hundreds of years of traditions in newspapers, how to how to avoid these kind of dangers. I think we are in uncharted territory today. Obviously, you have still mechanisms for ensuring some pluralism in this country. You know, I lived I grew up in a country where there was no pluralism in the information space. And you people were surrounded by propaganda. And, you know, these, these, these communist regime, it really cracked down partly because it was very inefficient. And, you know, people couldn't buy food. But the other reason was, they were lying all the time and people could see it. Yeah. This, today's world is slightly different. You know, instead of like, all these, all these new media types instead of like promoting one type of propaganda, they actually confuse you. You are surrounded by the flood of information. And some of it is true, some of it is not true, and it's very difficult to choose. It's difficult to, you know, to make up your mind by yourself. So hence, on one hand, you know, it's a tsunami of disinformation. And on the other hand, perhaps it will mean that, you know, the role of publications such as yourself, like the Volkskrant and others that have quality journalists will increase in this environment because many people will just realize it's just, you know, it's just not true.

Greg Piechota 13:11

It's just, it didn't really happen. You know, it is. I want to have somebody who actually is having a process of verifying it before, before they serve it to me, you know, at the time of crisis when everything is changing. I think it is sometimes useful to just stop and focus on what is not changing. You know, the world is becoming less safe. And that means that the role of information, the truthfulness of it, accuracy, actually matters more. So in such a case, you know, you would expect that, you know, at least for at least for myself, I'm not going to, you know, base my decisions based on some, you know, somebody wrote something on Twitter or X, I would rather look for something, that I can trust that there is an institution behind it. And this institution has processes. They vet these journalists, they train them for 20 years before they are allowed to actually write something on the home page. And after that, you know, there is a if they are wrong, there is a process to actually, you know, correct it and so on and so on. And I trust the process. I don't trust individual journalists necessarily. I don't need to trust individual article, but I can trust that the process is basically designed to make it right and make it accurate and make it truthful. Yeah.

Lars Anderson 14:27

Greg, I would like to take it a step back. You work for INMA, the International News Media Association.

Philippe Remarque 14:34

As a researcher in residence.

Lars Anderson 14:36

As a researcher in residence.

Philippe Remarque 14:38

Very chic.

Lars Anderson 14:39

You started the Readers First initiative. Can you can you tell us a little bit about this initiative and also what you do at Inma?

Greg Piechota 14:47

Sure. So, for me, Readers First is really about the changing paradigm of a media company that, is, traditionally was funded by advertising and therefore advertisers where they are most important primary customers. And the companies served, advertisers first. They needed to have a big audience, of course, for those advertisers, but it really didn't matter. What kind of audience was it that much? It was about the reach. And what we are seeing now is that publishers are shifting towards more consumer centric models. And that means that they need to prioritize the needs of readers. So just to give you an example, when I was a news editor at Gazeta, we had a. In print, we had a logistics supplement. Nobody wanted to read about logistics, but there was a lot of advertisers.

Lars Anderson 15:44

It brought a lot of money.

Greg Piechota 15:45

Yes. And it brought a lot of money. But I couldn't get a publisher to approve a supplement about history because there are no advertisers who wanted to advertise against historical numbers. It changed completely when the business model changed when the newspaper started to prioritize readers, because there are readers who want to read great journalism about history. And they want to pay for it. So this is just an example. This is a paradigm change. It's, it's more than just monetization difference because it changes the way you think about, you know, what is the purpose of all this? Who am I doing it for? You change the way you are organizing. So the whole business model is shifting. It's not just revenue model, it's everything is shifting. So what I'm trying to do in my in my work, I'm trying to study how this shift progresses and what are potentially, you know, the best strategies or tactics that could help bring companies closer to financial sustainability. That's basically the purpose. So in my, in my work, I would be collecting data from hundreds of, news brands across the world to better understand their performance, better understand their subscription growth, and help identify the most profitable tactics or strategies.

Greg Piechota 17:10

So, so we can say, you know, it's proven we have evidence this thing works. You should try it and you can try it this way. And here is 20 case studies showing you how publishers went about it. So this is in a nutshell, my work. Everything else is just output. Like I do reports, I do conferences, I do whatever. I do interviews like this one. It really doesn't matter. The output doesn't matter. What I think matters is the. The general goal is that in order to have a thriving democracies across the world, we need to have a newsbrands that are editorially independent. And the only way in capitalism to have an editorially independent news publication is basically be financially independent. So we need to make sure that publishers know how to make money, that they do make money, enough money to invest in this journalism in, in today's world. And yeah, so I'm thinking, I just hope I'm kind of helpful in that.

Lars Anderson 18:13

And what would you see as the big trends? In, for example, the focus of media organisations on readers, how they work with subscriptions. What are the differences between countries? If you would outline like the, the larger, trends that are worldwide, how do they look?

Greg Piechota 18:34

So obviously, I would say it all starts with money. So, usually, you know, we know that advertisers increasingly spend money on digital, but they spend money with big technology platforms. Yeah. And we just mentioned that in the Netherlands, 70% of advertising spend goes to digital. That is more than in many other countries. And 78% of this money goes to just 2 or 3 companies from United States. And this is also more than in other countries. So your market is very mature in terms of digital disruption. So markets across the world are different. Not necessarily the direction is different, but because they are at different stages of this disruption, some markets still have a very good business for traditional media. Some markets have become much more digitized. Like yours, your market is very disrupted. This disruption usually leads to, you know, some sort of strategies to how to how do you survive. And we can see, for example, in the Netherlands that publishers consolidate the market. They are looking for ways. One way is, okay, let's, let's merge, let's acquire another business. Let's try to diversify sources of revenue. So we are less dependent on one second is you are looking for some efficiencies in costs. Like maybe if we buy one, I don't know, editorial system for five different publications, you know, it will cost us less per publication, less per reader. Yeah. So they are looking for these economies of scale. There are also some businesses that are, you know, surprisingly kind of, how to say it. They are not disrupted that much or not, not at the same level as others.

Philippe Remarque 20:29

Which Countries.

Greg Piechota 20:30

It depends. It actually is different in every country. For example, in the Netherlands, people still watch television. There is fewer people watching news on television last week than it was 20 years ago. But still, most people watch news on television. And that means that television is quite a viable, you know, business for some time being. Maybe not forever, but what is forever? Yeah. So, but it may be very different in other places where television has never been so important or it has lost its importance. And actually it's kind of in a, in a downfall. The same is true about printed newspapers in some countries where logistical problems are not prevalent. People still enjoy their print newspapers. They may pay for them maybe much more than in the past because there is less advertising there to subsidize it. But in general, they get as good newspapers as 20 years ago. They are as thick as reach and so on. In some other places, people may still want to buy newspapers, but there is no way to buy them. There are no newsstands because they just all disappeared. People stopped smoking. They stopped buying bus tickets. You know, there's there is nowhere to buy a newspaper. So print media is just dying. Not because there is no readers, there's just no profitable way to deliver the paper. So there are these differences, but we know the directions. We know the direction is towards digital of consumption. People consume news increasingly in digital. We know that there is a tendency towards consumer revenue. And when we look at our members, 51% is the median, sorry, 49% is the median proportion of revenue coming from consumers versus 40% coming from advertisers suggesting this already happened? This is a bigger source of revenue for a median, meaning like an average, A news media company in the world.

Philippe Remarque 22:28

For us, it's over 70.

Greg Piechota 22:30

For you, it's over 70. Yeah.

Philippe Remarque 22:32

So of course it's print and digital together for some newspapers. Yeah.

Greg Piechota 22:36

Yeah. So, so we know the direction. I think it's pretty clear. The direction is pretty clear, but the but the pace of change is different in different places. When we think about how people, how people work with it, I think timing is important. Like just to give you an example of the New York Times, they famously wanted to make money with advertising in digital. It didn't prove to be viable. They switched to the subscriptions. They successfully built a very big subscription businesses. They have more than 10 million digital subscribers. But you know what? Where are the focus of innovation is today advertising because they have so many readers who are registered to The New York Times and logged in and read them, you know, some of them more often. So they are subscribers, some of them not that often. So they are not subscribers yet, but all of them are kind of known to the times. So times now can actually offer much better, much more precise targeting for advertising. So advertisers are kind of more interested in paying extra for, you know, this trusted platform with, you know, trusted data. You know, they are trying to kind of, you know, that your brand will be safe, published against quality content rather than some, you know, you don't know what, on social media, you know, that they are not cheating with you in terms of numbers. They can prove with, with the name for every person who subscribed to it that they read this article. So, you know, this is so.

Philippe Remarque 24:13

It's actually wise that we, also invested a lot in the advertising business, going away from Google and developing a big network of our own because we think that, that both, revenue streams will be important in the future.

Greg Piechota 24:28

You know, in general, you could say that there is a lot of transformation in news media business, a lot of changes of business models. People talk about new business models. For the past 30 years, the media and news media company makes only 11% of revenue from other sources than readers and advertisers after 30 years of innovation. So this is not to say it's impossible to make some extra money on the side, but it's not really game changing. It's significant, but it's not really a game changer. So my advice would be don't look for a, you know, like a savior on a white horse, like a knight on a, on a white horse that comes and, you know, comes with a completely new business model and it will change everything. No, we need to figure out how to serve our readers better. And we need to figure how to serve our advertisers better.

Lars Anderson 25:18

You mentioned that Dutch society is pretty disrupted already. We are pretty far in our disruption. Would you say that is a good thing for the media business? Does it help us innovate more? Does it help us become more rapid? In, in our, in our actions?

Greg Piechota 25:35

That's a great question. I don't know how to answer it politely.

Philippe Remarque 25:39

Do it politely. Then.

Greg Piechota 25:40

There is a reason to because media companies here are not actually owned by the Dutch. So probably the disruption was too fast for some. Yeah. This is not to say that the Dutch public is not served well by foreign publishers. This is just to say like this was a rapid disruption. And it clearly meant that media needed to, you know, consolidate. Yeah. And the consolidation force came from the South.

Philippe Remarque 26:09

Yeah. They came from the Belgians.

Greg Piechota 26:11

Luckily, it's, you know, similar language and a similar culture. So perhaps you, you know, and but in most of the money is made in the Netherlands. But it's interesting just as a, you know, like, why wasn't it the Netherlands to be the consolidator? But the other way around.

Philippe Remarque 26:26

We were just very bad publishers back then and being disrupted. We didn't have the right answers.

Greg Piechota 26:32

Yeah, maybe. Maybe. But still, when you are challenged, it is an opportunity to reinvent yourself. What I like about digital transformation is that there is always opportunity to actually enter new markets. Think about it like this. Everybody thought meta is the biggest social media player. You know nobody will challenge meta. Now we talk about TikTok. Yeah. Then we talked about Google is the biggest search engine. And now we talk about, you know, SearchGPT, Perplexity, all those AI things. This is not to say that, you know, this is just to say like, it's contestable. This thing is contestable. Every few years there is a new kind of channel developed or a technology developed or a preference developed that actually provides a new opportunity, you know, to, to, to, to build a great business here. So, you know, even if, you know, the Dutch media were, you know, disrupted very much, in the first decades of internet, it doesn't mean that you will not be the disruptors in the Second age. Actually, many tech companies working in the news media industry is based here. So you have a lot of talent aggregated. If you think about, you know, the biggest, builder of paywalls in the world, I think they are. European office is in Amsterdam. If you think about all the big streamers when they come to Europe, they build their offices in Amsterdam. There is something, there is a talent pool. There is a nice, you know, lifestyle. Of course there is Amsterdam. Yeah. So it's just beautiful. And, and all the attractions of, you know, the city center, of course. So all together, I think it's a, it's a, it's a good environment for innovation.

Philippe Remarque 28:16

That's nice. And then let's move to the next big disruption you were talking about is AI. You said some interesting things about that a year ago already, I remember. And how do you think newsrooms will adopt AI and how will it change journalism?

Greg Piechota 28:33

That's a big question. You know, if I knew, I would be, you know, gambling. So I probably don't know how it will happen. But I can tell you something that I'm seeing right now. I can see that, you know, we started working with AI thinking it's an efficiency tool. We will be potentially able to do the same with less so we can, you know, instead of having ten people proofreading articles, we could potentially have two because maybe else will be done by algorithms and so on and so on. And that's all right. We need to be efficient and we want our people to be more productive. We would appreciate if you know some of the articles, you know, we could have more of them. And potentially with AI, you could have more of them assuming you will solve all the problems that AI generates. Like, you know that proofreading cannot be 100%, you cannot be 100% sure that, you know, these articles that are crafted with, with AI, you cannot be 100% sure they are okay. The summaries are not 100% sure they are all right, and so on and so on. So assuming there are all these, but let's say these are technology problems or design problems, maybe they can be resolved hopefully sooner than later. Having said that, you know, this whole focus is on efficiency and productivity. We haven't actually yet started to develop things that would make journalism better because of AI.

Greg Piechota 30:03

Like how could we explain things that are unexplainable? How could we show things that we don't have access to? Maybe, maybe this is where actually, you know, I think personally, the use of AI will become, will become groundbreaking for journalism because we will be able to do that. We were not able without, without AI. And, you know, you see the first signs, for example, in investigative journalism, like sometimes you get, you know, you get access to some documents and it's just impossible, you know, with, you know, resources that newsrooms have to go through the data to find patterns, to find names and so on and so on. It actually gets much easier with algorithms and AI. You know, every journalist, you know, the life of every journalist got easier when they could use transcriptions from interviews, you know, every, my life is easier when I look at my phone and I have summaries of my emails and I don't need to, I don't need to read 300 emails. It's shorts, emails out. It shows me just the summaries of emails I can focus on five emails that the machine believes are the most important. And you know what? It really doesn't make many mistakes. Sometimes it does, but it's not like, you know, it's not like all the time. So it's actually very useful in my life.

Philippe Remarque 31:25

You showed me you are one of the Europeans who has an American Apple account. And that's why you have the Apple intelligence on your smartphone, that we don't have yet here in Europe. And, so you use this and I already saw a study from Inma actually saying this is bad for our newsletters because they are classified as less important. And it actually happens in Gmail too, by AI so that you don't have to focus or they, or they summarize. And now the whole system of, of distribution is again affected or disrupted by AI on those platforms and not necessarily in our journalism. So this is a new kind of struggle between platform and content provider or creative source. Like who is going to do the AI? And you had a warning for me when you showed me your, your, your iPhone and said, if other people do this and the big platforms do this, then you will become a commodity, because you just deliver the content and, and, and you don't slice and dice and do the delivery anymore.

Greg Piechota 32:38

Yeah. That's a dangerous potential outcome. But, you know, let's, you know, we are talking, we should be audience first. So let's think about the audience. Yeah. Whenever there is a new technology that allows people to publish more, there is more stuff. Yeah. And people struggle with it. You remember when the internet came and we started to use directories to find some websites? Yeah. And then, you know, we had these search engines like Google or AltaVista to, to find the stuff. And then, you know, you ask anything to Google and Google gave you a thousand answers. Too many. Yeah. So we were started to ask people on social media like, you know, maybe your friends can recommend, you know, somebody who can help with your dog and whatever. And then you had too many friends on Facebook. We started to use WhatsApp groups for that and so on. So what I'm just trying to say, whenever there is a technology that lets people produce more stuff. Yeah. There is more stuff being produced, and there is a need for a technology that will help you kind of stay sane in this world that will help you filter. Yeah. That will help you, that will help you find the relevant information. So in that sense, AI is very useful. It has this capability to create more disinformation, more content of any kind of quality, but it also has a has a big power to actually help people deal with the, you know, these, these, tsunami of content.

Philippe Remarque 34:07

Yeah. But should we, should we offer that ourselves as publishers to people, or should we rely on Apple to do it for us and Google?

Greg Piechota 34:16

So in early 20th century, I, there was a prospect for a new magazine published, it was a magazine called time. And in this prospect, the founder wrote that in today's world, there is so many newspapers and news wires that, you know, a busy business person just cannot keep up with it. There's too many too much news. So there is this idea of a time magazine that will save your time, and in 20 minutes, you will know what's going on in the world. Yeah. So this problem is not new at all. And journalists and media companies were actually very good in trying to solve it. I guess today we will solve it also with AI. But I think it matters. What are the values of a person who is making an aggregation and is making a selection. And it matters whether you actually care to verify the information that you that you summarize. It also matters whether you try to make sense out of this information, and I can imagine that AI summary, whatever algorithm from the Volkskrant could be very different than from Trouw or De Telegraaf. And it would be a good thing actually. So for these reasons, I believe that for the sake of our, you know, society, we would, we, we would be better served by multiple versions of those algorithms rather than, just by one that will be, you know, designed somewhere in the United States with, I don't know, Donald Trump priorities in mind.

Lars Anderson 36:00

Mhm. And have you seen like, a couple of initiatives, AI initiatives that are really a positive thing for, for example, the reader First initiative.

Greg Piechota 36:12

Oh, yes. So, for example, we have seen that there are some advances in AI technologies used to understand content. And this is directly improving the ways we can classify content for the purpose of smart paywalls, personalizing recommendations of articles and so on. And this is a huge change. So these kind of smart paywalls, that kind of look at the user and try to decide whether to lock an article or not. They have been around for ten years or more, but they haven't been actually working very well. And the reason was, you know, they had good results in laboratory environments. But when they were released to a broader audience, there were a lot of problems. First is that, you know, most people are actually visiting anonymously to the websites, so we don't know much about them. We just know that there is a browser somewhere trying to do something. We couldn't say whether this was one person or two people. We just don't know. A lot of those, browsers were visiting websites, once a month, so actually we didn't have enough information to make any educated guess whether it's a reader who want to read and become a subscriber or not. So only a small proportion of all users were actually scored by these kind of paywalls. And only a small proportion actually, you know, only on a small proportion of the traffic, you could actually see any kind of impact of, of such a paywall.

Greg Piechota 37:42

Most users were not really scored. Most users were seeing everything for free. It, it is changing now with our understanding of content. So we can now analyze content contents, article contents to, you know, we can analyze the user needs, we can analyze whether it's about foreign affairs, but whether it's about United States, but also Donald Trump and Donald Trump, in combination with Elon Musk and so on and so, so on. So we can really understand articles based on this. We can also see, you know, we can combine this data with data about, for example, transactions. So we understand whether people who are reading this article actually bought a subscription. So we can guide, for example, a paywall algorithm to make a decision in sort of a way like first, okay, if you know the user and you have some sort of idea whether this person looks like a potential subscriber, use this rule. And if we know nothing about the user, let's have a look at the article itself. And let's try to understand whether this article looks like an article that potentially gets somebody to subscribe. Based on this, you can target 100% of users on a website based on this display. Will suddenly started to work, and publishers see an opportunity to actually lock fewer articles on websites and at the same time grow subscriptions.

Greg Piechota 39:03

So this is an amazing, advancement in the past, let's say two years, another advancement is in, content recommendations. So traditionally, we know that personalization of content works and we have studies showing the value of personalization for Spotify, for Netflix, for Amazon and so on. The problem is the algorithms that were used there don't work for news. And the main reason is because news is about very fresh content. So things that are published right now, and they will be out in two hours, all the algorithms that were developed for shopping or for streaming, they basically require much more time for a product to be on a shelf to really try to understand different people, how they were interacting with it, to make any prediction and make any recommendation. You can't do it with news because it's a fast moving good. You know, everything goes into expiry mode before you actually have any idea whom to show it to. So you need to rather analyze content. And, and again, thanks to these large language models, we can analyze content much better. So we can create much better algorithms for personalization of content. And this works when people see things that actually make a more interesting to them. They read more.

Lars Anderson 40:28

And then you're basically talking more about evergreen content stories that last longer. Is that what you mean?

Greg Piechota 40:35

Not necessarily. Because with these algorithms today, you can also score breaking news because basically by understanding what is in the story, you will be able to select other articles that should be shown. And this is a big it's I know it's very technical and, you know, many of your listeners might think, oh my gosh, this is just, you know, all physics to me. It is technical, but it's a great advancement. You know, there are and this is all done by the news industry. It's not the tech industry developed those algorithms. It was done by people like, I don't know, Kasper Lindskow from JP/Politiken and Ekstra Bladet in Denmark who worked with the local universities to test 50 different algorithms of personalization. And basically, they developed something that worked for news because it was designed for news. And, you know, to my big surprise, they made it free for every publisher in the world to actually learn from it because they published it as an open source. The algorithm is open source. So hopefully many more publishers will now adopt this kind of discoveries into their into their toolkit. And, you know, and basically the, the pleasure of reading newspapers will even be bigger. You will have some articles that were curated for you by editors because you trust their judgment.

Philippe Remarque 41:59

You still need that.

Greg Piechota 42:00

You still need that. And, you know, there are some things, you know, you could say boring but important, like everybody should say it, but then, you know, you will also have a lot of stuff that is kind of more relevant to you and maybe from your city, maybe about the subject that you are really passionate about and, and so on and so on. And, you know, people, you know, people will not necessarily need to set it up. It will just learn from their behaviors, what is, what is useful for them. I think most people we know from research, they, they, they interact better with the personalized systems. They value personalized systems. People are usually just afraid that they will miss something important if everything is personalized. And I think we should. Just as editors, we need to give them a guarantee. You will never miss something important. If we believe something important, you will see it for sure, regardless of your personalization. And I think this is an insurance. This is an insurance. Yeah. You kind of know that, you know, I'm a subscriber to the Volkskrant. You know, I will never miss something really important about the I don't know. The Dutch democracy.

Philippe Remarque 43:09

Yeah.

Lars Anderson 43:09

So, Greg, a lot of news titles are working together with, AI companies. For example, they make deals with OpenAI or with Anthropic. What's you, I mean, you even spoke Mathias Döpfner obviously, he made a deal with OpenAI with Axel Springer. What's your view on these, these cooperations or these deals? And then specifically in terms of how it, benefits journalism?

Greg Piechota 43:38

Okay. You know, I understand that most publishers sign those deals because they got some sort of, money. It's usually small amounts like they are, they are large for an individual, but. You know, this would be 1 to 3% of somebody's total revenue. So it's not a game changer in terms of like sustainability of journalism, just for sure. They also part of the deals is usually learning. So there is an opportunity to maybe influence some of the decisions by those tech companies. Opportunity doesn't mean guarantee you get maybe some credits for use of their services. So if you want to make some experiments with AI, you can, you know, you kind of part of the deal will be that you use this computing power, you know, it's included in the deal, you potentially get access to some trainings and so on and so on. So it's learning, it's some money and so on. It's not a game changer though. This is just to be clear. Yeah. And these, tech companies do not have an incentive to sign it with every publisher. They usually sign it with like a sign or some signature publishers from language groups. So I don't know if they believe that.

Philippe Remarque 44:59

News Corp.

Greg Piechota 45:00

Yeah. So if they believe, I don't know, they want to do business in Dutch, they would go to number one. Number two company, they will offer a deal. That's it. Yeah. It's not going to they are not going to come to number five. Number six. Number seven without regulation. It just is not happening. I think the big challenge is that in general, after the change of the US administration, it seems that these tech companies, think that they will be shielded from any regulation across the world. So basically, if any country attempts to tax them or to limit their growth, they hope that they basically, you know, Donald Trump or US administrations will come to rescue them. So I would rather expect that whatever, whatever is happening right now is just the end of it.

Philippe Remarque 45:53

We had a demonstration in Brussels where I spoke to you at a conference, of, Microsoft Copilot that's now installed on every windows computer. And they say like, good morning, this is your copilot, your, your news from 51 of the companies who also signed a deal, and summarizing it. And so taking over the delivery of the news, of the live news that's, financial times, makes. And I was wondering, isn't that a big risk for, for news publishers to give out their content? And if it's then, included in some AI experience with, with interaction with your, with your operating system or your life or your speaker or whatever, that they will never visit ft again anymore. Why, why, why would you.

Greg Piechota 46:48

I guess, you know, it's more complex than that. So first, you know, when there are new technologies, I think you need to learn how they work. And there is no way of learning without trying it. Yeah. So you could always think this is not necessarily a marriage forever. This is an experimental, you know, they have a collaboration for a year. They can decide whether they want to continue or not. Yeah. This is one way of thinking about it.

Philippe Remarque 47:12

This way. We start to give away our free our news for free. Yeah.

Greg Piechota 47:15

But we did it for 20 years. Yeah. So we haven't actually closed the experiment after a year. Yeah. The second, the second point I would like to make is that, There are different audiences. There are some audiences that, you know, are heavy users of the Financial Times. I'm a subscriber of the Financial Times. I consume financial times with the Financial Times because this is where I'm getting my personalization, my, you know, tracking of my industries and trucking of my companies that I want to track, and so on and so on and so on. I'm a heavy user. Yeah. So these heavy users usually have brand preference. I want to use the Financial Times and not something else. I want to use Bloomberg not something else. Others see not something else. There is fewer of us, but we are able to pay high subscription fees because of it. So I subscribe to the Financial Times and I'm paying, I don't know, £50 per month, I guess, for a digital access. It's a very expensive subscription, but it's important in my work. So you know, it's on company expense anyway, so I don't care that much how much it costs. So this is basically one way of thinking about it. But then there will be a casual consumer, let's say a consumer who's not really interested in politics.

Greg Piechota 48:38

A person that is, you know, they want to know if something big happens, you know, if the war in Ukraine starts or stops or where, you know, when there is a conscription in the Netherlands and so on. They want to know it. So, you know, they check the news from time to time. They want, you know, they want to make sure they don't miss anything important, but they are not checking the news every day. And, you know, if they are not playing on a, if they are not in business, if they are not playing on a stock exchange, why should they subscribe to the Financial Times at all? You know, it's like it's not really necessary for them. But if there is, you know, a big thing happening about inflation or about a budget or about a trade between United States and European Union, wouldn't you trust the Financial Times to know this, this thing better than maybe others? You would you would appreciate an opportunity to read an article or to get a summary of an article about it, you know, but you are not a heavy user necessarily. So I think publishers should approach these problems a little bit like, like hotels or like airlines.

Greg Piechota 49:48

So if you are a frequent traveler and you always fly with KLM and you always stay in, I don't know, Krasnapolsky hotel. You clearly become member of the loyalty clubs. You know, you go directly to the website, you buy the flights, you buy the hotel rooms. You pay actually more maybe than others, but you get a lot of perks. Breakfast is included in your rate. You know, you get whatever extra luggage to your flight ticket and so on. But technically, people could buy the same room in Hotel Krasnapolsky and the same seat at the flight KLM more cheaply, they would go to a to a platform like booking.com, kayak.com or whatever. And they could, they could find a cheaper ticket, But this would be, you know, a room without a breakfast and, you know. The seat without a without a baggage and so on. And, you know, some casual consumers. Tourists, they would potentially be happy with this. But if you are a business person, no, it's not really enough. It's not really the service that you are looking for. Your time is more important for you than money. You want to pay €20 extra, but you want to be sure you get on time. And so on and so on, so on. So you segment people by channels.

Greg Piechota 51:13

So what if the Financial Times would be let's just let's just think they could think like that. Okay, we have our channels where we serve our brand fans, our heavy users, our core readership, and then we have other channels where we can actually show off our brand to people who are potentially customers in the future, people who are just casual consumers. And we would never actually, you know, really sell them the full subscription, but we could sell them something and it's always a benefit. You know, there is a benefit. Somebody comes to your website, you can show them an ad, there is a benefit, you have additional email in your database. So you can target, you know, some newsletters. There is a benefit. Maybe they are not buying subscription today, but they will buy in the future. Maybe they will not read your, I don't know, stock exchange content, but they will be happy with the story from your culture section because they have a good culture section at the Financial Times, because all those businessmen, apparently, you know, they have some cultural aspirations. So this is just to say like, maybe it's a maybe it's a channel management problem, not really a black and white business relationship. Like, so maybe it's not a problem.

Philippe Remarque 52:26

One of the channels might be an AI rendition to, to some, some sort of summary.

Greg Piechota 52:31

You just want to make sure they don't steal your content. You just want to make sure that the summary is somewhat accurate. And you want to make sure that they quote you. Know, when they, you know, when they when they refer to your to your article, you, you know, you don't want to be misquoted. You don't want to, you know, be sad that you, you said something that is actually not accurate at all because it is the opposite. And you don't want that they misspell your name. Yeah.

Lars Anderson 52:59

Mhm. So, Greg, you are also, like, very knowledgeable on the field of subscriptions. You wrote a report, like there is no ceiling for subscriptions. And I think a lot of people in the media, they do think that there is a, there is a ceiling, there is a maximum amount of subscriptions that you can sell to your customers. Could you, could you explain a little bit about that? Could you tell us a little bit more?

Greg Piechota 53:26

Sure. So according to the latest survey by the Reuters Institute for the Study of Journalism from Oxford in the Netherlands, 15% of adults said that they paid at least once for online news in the past year. 15%. But when the people who do not pay were asked, okay, if the price was right and choose the price, would you consider paying? And then further, 38% said that they would actually, yeah, they could consider paying if the price was as they wanted. So think about it this way with the current contents, if you adjusted the price to somebody's usage level or knowledge about your brand, you could sell subscriptions in the Netherlands to 51% of adults instead of 15% of adults. And this doesn't assume changes in the product. So you can assume that, you know, there is the rest of people who just don't believe that the product is for them. But maybe by thinking about, you know, what kind of content mix would be interesting, what kind of format mix would be interesting for them? Maybe, thinking that it's not just about news, it's also about lifestyle and entertainment and sports. You know, it's interesting when you look at the biggest websites in this country, you have two sports websites in the top ten and they don't look like connected to publishers necessarily. So this is just to say like, it means all, all the, all the other publishers are just missing the point about sports potentially. It's not just about political news, it's also sports. Yeah. So this is so my point is based on surveys, we can clearly see there is an opportunity to grow subscriptions in the country like Netherlands.

Greg Piechota 55:24

And, and 15% of the Dutch people who paid for online news is just a little bit below the global average. Then we have historical numbers so we can compare how many people paid for online, paid for, for example, print news in the past and how many people are paying today. I did such an analysis for 20 biggest markets, and there seems to be like a 3 to 4 times upside, meaning there is fewer people paying today for digital news than 20 years ago. Were paying for printed news. And of course there is many more sources. That's true. But, you know, when we look at, the kind of, signals that are predicting that somebody wants to pay, it's very often is education, wealth, being engaged in politics, meaning voting, for example. And the proportion of people who are well educated in the Western societies actually has increased significantly in the past 20 to 30 years because many more people graduate from universities. If you think about wealth, actually, you know, I know people complain about the rising cost of living and inflation, but in the past 20, 30 years, the Society of Netherlands and other societies in the Western Europe, they got richer. And if you think about, you know, political activities, of course, you know, it is kind of shaky, meaning it goes down and it goes up. It's cyclical. You clearly could expect that with the current international situation where all the big things change, like alliances, like security situation like, and so on and so on. More and more people will be interested in politics. They will be mobilized by, by populists. They will be mobilized by traditional parties and maybe they will be mobilized by new parties.

Greg Piechota 57:35

Yeah. So I think there is no reason to expect that fewer people than 20 or 30 years ago would feel like it's absolutely justified to pay for access to quality information. That's why I think taking into account these surveys that currently show there is an opportunity, historical numbers that show the opportunity. There was just no clear reason why, why, why the median national news brand should reach only 1% of households. I like to think about it in a graphical form. So imagine that you stand in front of One World Trade Center, that is this new tower in New York that replaced the, you know, the demolished World Trade Center. It has 104 floors. So imagine that you stand in front of it. You are on the first floor. There's still 100 above you. That is how I imagine basically the. You should look at the problem. It's you know, it's very early development of this business model. It's just been what, 15 years since really publishers started to work on it. You know, you guys launched it in 2017. It's eight years and you believe it's the end. I would say it's you know, the newspapers were building their business models over hundreds of years. So it would be like a very short sighted thinking that, oh, that's it. No, it's, you know, we just need to figure out how to how to how to do it. And we need to figure out, you know, how, what should be the right price for people with different brand preference and different needs. This is this is a big challenge for us.

Philippe Remarque 59:20

You might, you might have to offer a lower price for people who are less interested or interested in less.

Greg Piechota 59:27

Yeah. Or higher price for people who are interested in more and want to have everything. There are always people who fly first class because they want to have everything. So this is one. The second thing is we need to figure how to attract audiences that are casual. Sometimes, you know, I'm a heavy user, so I basically, you know, I'm okay. You know, I'm reading these newspapers every day. I have 200 subscriptions, so I'm not reading them all because I don't speak the languages. But I read a lot. Yeah, let's just assume I read a lot and I'm a heavy user. And these newspapers are really designed for heavy users. But what, what, what would a newspaper look like that is designed for a casual reader? Imagine that you haven't visited for a week and you come to the Volkskrant, and likely you will see all the news from today. But if there was an important thing that happened on Saturday, would you see it or not?

Lars Anderson 1:00:27

Probably not.

Greg Piechota 1:00:28

So maybe, you know, a smart newspaper would actually take into account that you haven't checked the news in the past week. And they will keep this story from Saturday that editors believe is very important. Still on the home page. So personalization doesn't need to mean that you will be closed in a bubble. You know, of similarly thinking people, it may mean that actually the newspaper will take into account how often you check the news so you never miss anything important. And that would be a better service to a reader. Yeah. So I'm just thinking like, you know, if you start thinking about casual readership, you could imagine many things today. I've seen an amazing experiment you guys are doing with the University of Amsterdam about testing whether people would be interested in having some sort of stories, not only in the text format, but also audio format or video format. Yeah. And that's great. You know, yes, there are moments where I like to read. I'm in my bed, you know, with my phone. And I can read a longer story. But there are also situations where I'm on a subway and I, you know, and I'm not really in a mood of reading a very long article and actually scrolling through like an Instagram feed with news stories could actually be very useful. And I'm an avid reader, but, you know, I'm a person that sometimes prefers to watch, sometimes prefers to listen, you know, I'm driving, I'm not going to read. I'm not going to watch. Actually, having a narrated version of an article would be beneficial to me if it was a sort of a playlist that I can just turn on the latest news and I'm driving to my work.

Philippe Remarque 1:02:08

We're developing that.

Greg Piechota 1:02:09

And I can listen to it. So that would be real personalization. This would be this would be game changing for a person that is a busy reader, for a person that is a casual reader, for a person that is, you know, that hasn't yet discovered why news matters.

Philippe Remarque 1:02:26

I got inspired again talking to you. We have a lot of work ahead of us, and we're still only on the first floor of 100 story building. And that's, that's very inspiring image with which we, leave this conversation, I think. So thank you very much, Greg.

Greg Piechota 1:02:44

Thank you so much.

Lars Anderson 1:02:45

That was the podcast. Thank you all for, it was a podcast from DPG Media, with co-host Philippe Remarque, directeur journalistiek van DPG Media, and Lars Anderson, manager innovatie.