Creators and investors believe in media in the USA

The long downslide of traditional media is over, and both investors and start-ups are again beginning to see potential in new business models of the media sector, says media entrepreneur and researcher Taneli Heikka.

Bleep, bleep, bleep. Susan Hayden fumbles for her phone on the bedside table. She finds it and stops the noise with a tap. Susan pulls the phone under the duvet, her finger swipes the screen, she taps, and the download takes a couple of seconds.

A faint blue light is reflected on her face. Susan is starting her day as she does every day: by first checking Facebook and Twitter. Nothing extraordinary. It seems that the world is still there.

In three minutes Susan is up and out of bed. This was her dose of news for today.

We’ve hit the bottom

Susan Hayden is a fictional character, but according to a survey by the American Press Institute, there are millions of people like her in the United States. Almost one in two Americans receives news through various social media services. The younger the age group, the more important they rank social media as their source of news.

The way Americans use news media is also affected by the growing use of network and mobile services. According to Taneli Heikka, media entrepreneur, writer and researcher living in Washington D.C., people are now less committed to brands and old habits. The combination is a challenge to traditional media.

New online media startups are attracting investors now in the USA. In a New York metro car people still read their news both from traditional newspapers and from their cell phones.​​​

“Traditional media is not doing too well, but we have hit the bottom. People here understand that the news still has an audience, and it's a good idea to invest in new features”, says Heikka, who is a research fellow at the American University Washington D.C.

Institutional investors getting active

Both media makers and investors show great trust in the future.

Experienced writers at large media houses are trailblazers by launching online publications. One well-known person to make the leap is Glenn Greenwald, who was involved in the Edward Snowden revelations in the Guardian and who now works for the Intercept. The Washington Post lost its top writer Ezra Klein when he launched his website Vox, which offers news in an easily digestible format.

Also investors show their trust in media by investing tens of millions in companies. Investments come from funds and people who made their fortunes in business, such as the eBay founder Pierre Omidyar and investor and political campaigner George Soros.

Media creators and investors are united in their wish to change society.

”Expressing ideological views is typical of American media, which state their views much more readily than Finnish media, Heikka notes.

Facebook motivates

Another common factor is an understanding that success can only be achieved by trial and error. Good examples encourage others to take a chance even if their business models are not very strong.

The best-known examples of this are YouTube and Facebook.

“Services that started practically from nothing managed to start a revolution in the way we use media. Based on this logic, it follows that people are asking whether it would be possible to come up with smarter tools for civic participation than social media, which were originally created for entertainment purposes”, Heikka says.

Heikka's own research focuses on civic media services that aim to stir up social activities. They are experimental and digital efforts, carried out by a small number of people. The accidental internet surfer can hardly be bothered to read these websites, but the sites do create new kind of jobs in the middle ground between traditional media and digital activists. What is essential is establishing how data is used, an example of which is Sunlight Foundation, which tracks the flow of money between politicians and investors.

“Whether this is something that will change news media remains to be seen. Activists' and writers' desire to influence society by new forms of communication, such as open data, is still a noteworthy phenomenon”, Heikka comments.

People still read print media

What about the position of large media houses and traditional media in the middle of all this? When we take a look at people's media usage in this decade, we can see that Americans spend almost the same amount of time reading newspapers and even a little more time watching television than in 2010. According to eMarketer, it is magazines which have experience the largest relative drop in their audiences.

One possible scenario for the news sector is that both business strategies and journalistic ideals change. According to Jan Schaffer, the founder of J-Lad at the American University, which explores the future of journalism, journalists now want to be more involved in building communities, and not simply report news.

Heikka says that if this happens, people won't necessarily pay to read news but to support media as builders of communities.

“Journalists must therefore dig deep to find solutions to problems instead of just writing about them. In this vision, media moves closer to the role currently occupied by civic organisations”, Heikka says.