The near closure last month of Australian Associated Press, saved only in the 11th hour when a group of philanthropists stepped in, clearly signals that the agency business model is no longer working.
While the bigger agencies struggle to fund themselves through disappearing subscriptions, the smaller ones are mostly left to operate on the principle of sending out as many stories as possible, hoping that many of them get published and that they might receive payment for some of them.
There are many problems with the agency model, but what makes it terminal in its current form is Google, which has once again demonstrated that it does not understand the news business despite its key role in distributing it.
Google’s algorithm makes no distinction between a Reuters report republished by a professional media service that paid for it, and a report simply lifted and republished by a news amalgamation site that may have no journalists, and republishes anything from anywhere, potentially spreading fake news and making no contribution to the news landscape.
Google treats them all the same, and that means news media that republish agency copy in order to get urgent stories out quickly end up being penalised in Google rankings if the text is not completely rewritten.
This means that instead of doing original stories, journalists are being employed to rewrite the material which is perfectly good in the first place.
What is the point of having somebody in a London newsroom thousands of miles away from the story they have been asked to add to a site attempting to reorder the words when they could be doing an original story themselves?
A vast amount of resources invested simply to avoid falling foul of the Google algorithm.
It also raises the question of what is the difference between a media company having staff rewrite something from Reuters or Associated Press that they have to pay for but can’t use in the form delivered, or just rewriting something from a credible news source like the BBC, Guardian or the Times?
The answer is the subscription needed to pay for a big international news wire agency, which is why more and more media are deciding they can do without it.
Small news agencies also suffer by having their material rewritten for the same reason, and they have the further problem that having been rewritten, is there anything left to pay for when they send in an invoice?
One small UK news agency demanding payment for the republication of its exclusive report from a court case had payment refused by a national newspaper on the grounds that the information was widely available online.
In fact all the reports being referred to as “widely available online” had originated with the same agency, yet even in this case it was difficult to get payment.
In the vast majority of stories that need to be covered this exclusivity is not the case, and if you can’t get paid for text, why write it?
Instead, many agencies have become video or picture syndication firms, obtaining content by scouring social media and attempting to obtain exclusive licences so that every usage afterwards will guarantee a fee.
Text with this business model has become reduced to picture captions needed to sell material, many employ no qualified journalists at all and text is given away for free to try and sell the illustrations.
Our project, the Fourth Estate Alliance, is trying something new.
We launched in December 2018, and the project now comprises five small agencies working with a team of reporters in a virtual newsroom, and as of this month all five have moved to a hybrid business model that sits between the two business models outlined above.
They only ask media partners to pay a modest fee for what they use, as with other small agencies, and this means that for media partners, there are no fixed costs to worry about if the service is not used.
But from this month we also offer the exclusivity of a subscription model, whereby 90 per cent of the media outlets that were previously clients in the hope of a sale have been removed, leaving only five media clients for whom the content is proven to work.
In order for this business model to succeed, it goes without saying that the agencies need to see usage, and that means they need to not only produce well-written material which media partners will want to publish, but that it also needs to be first, accurate and independent.
In addition, although a journalist’s contacts are often hard-won and jealously guarded, the agencies are also moving towards including details of how the story was created, what sources were used and what verification was carried out.
This means when the inevitable rewrite happens, it can be done speedily and quickly, offering the partner the chance to even develop or expand on the story and create something new in the media landscape.
The experience so far has shown media partners are making sure our agencies get credit, which means payment.
Small agencies have the advantage of being able to develop personal relationships with a small client base, something often neglected in the rush to service as many clients with as much content as possible.
By concentrating on the requirements of a small number of media partners, we are able to understand and deliver the content that works.
After getting rid of 90% of their clients, those five publishers remaining know that they are getting an almost exclusive service, and this is already showing dividends in terms of usage – although it has been a few days and there is a long way to go yet.
There will no doubt need to be many modifications on what is essentially a new way of working for agencies. It involves trust on both sides and needs to ensure that content that generates readers and reputation is rewarded in a way that allows agencies to cover the costs of gathering it in the first place.
But all five agencies are again producing text-only stories and the project could offer a business model for the future. The network has been built with no external investment, no subsidies and no grants. It was built by journalists, for journalists.
With the right media partners that value the service, it will work. But fail or not, expecting philanthropists to step in to keep news organisations going is not the way forward.
We will be looking to find other clients interested in flexible partnership deals for agencies, but at the same time want to limit those partners to around 10 per agency.
But for the moment the focus is on tailoring editorial content to provide content that works for the five partners we do have.
Anyone interested in finding out more about the Fourth Estate Alliance directly can get in touch using the contact form on our web page here.