TLDR

With massive audiences at stake, we can expect to see the seeds of something better emerge in 2023

This year will see increased concerns about the viability of some news organizations against a backdrop of rampant inflation and a significant squeeze on household spending. Russia's invasion of Ukraine, the increasingly destructive effects of global warming, and the COVID pandemic's aftereffects have all created fear and uncertainty among many ordinary people. Journalism has often thrived in these conditions, but the depressing and relentless nature of the news agenda continues to turn many people off. Could this be the year that publishers reconsider their offering in order to address the twin challenges of news avoidance and disconnection - to provide more hope, inspiration, and utility?

Big Tech platforms will face challenges this year, and not just because of the economic downturn. First-generation social networks such as Facebook and Twitter are struggling to retain users as older users become bored and younger users migrate to new networks such as TikTok. In the midst of this upheaval, there is some hope that the next set of applications will prioritize connections and content that are beneficial to society over those that deliver outrage and anger. With massive audiences at stake, we can expect to see the seeds of something better emerge in 2023, with a slew of new networks and models.

Meanwhile, the next wave of technological innovation has arrived - and we're not talking about the metaverse. In 2022, extraordinary advances in artificial intelligence (AI) revealed more immediate opportunities and challenges for journalism. AI allows publishers to deliver more personalized information and formats, assisting with channel fragmentation and information overload. However, these new technologies will raise existential and ethical concerns. Buckle up and enjoy the ride.

In this environment, news organizations that have not yet fully embraced digital will be severely disadvantaged. The next few years will be defined by how we transform our digital content to meet rapidly changing audience expectations, not by how quickly we adopt digital.

How do media executives see the coming year?

Publishers are far less optimistic about their business prospects than they were at this time last year. Less than half (44%) of our sample of editors, CEOs, and digital leaders are optimistic about the coming year, with nearly a fifth (19%) feeling pessimistic. The main concerns are rising costs, decreased advertiser interest, and a softening in subscriptions. Even the most optimistic predict layoffs and other cost-cutting measures in the coming year.

At the same time, we find evidence that the majority of publishers (72%) are concerned about rising news avoidance, particularly around important but often depressing topics such as Ukraine and climate change, with only 12% unconcerned. Explainer content (94%), Q&A formats (87%), and inspirational stories (66%) are seen as important or very important by publishers this year. A less popular response (48%) was to produce more positive news.

In 2023, more publishers will invest in subscription and membership, with the majority of those polled (80%) stating that this will be one of their top revenue priorities, ahead of both display and native advertising. Despite the pressure on consumer spending, more than half (68%) of respondents anticipate growth in subscription and other paid content income this year.

According to publishers, three or four different revenue streams will be important or very important this year. A third (33%) now expect to receive significant revenue from tech platforms for content licensing (or innovation), a significant increase from last year. This reflects the fruits of multi-year deals negotiated in some markets with a number of big publishers, often in the context of policies championed by those same publishers that are being introduced or considered by governments.

With more legislation planned this year to restrict 'harmful' content on social media, many respondents (54%) are concerned that the new rules will make it more difficult for journalists and news organizations to publish stories that governments do not agree with. A third (30%) are less concerned, and 14% are not concerned at all.

Publishers say they'll focus less on Facebook (-30 net score) and Twitter (-28) this year, instead focusing on TikTok (+63), Instagram (+50), and YouTube (+47), all of which are popular with younger people. TikTok's increased interest (+19pp compared to last year) reflects a desire to engage with under-25s and experiment with vertical video storytelling, despite concerns about monetization, data security, and the broader implications of Chinese ownership.

The potential implosion of Twitter under Elon Musk's leadership has focused attention on its value to journalists. Half of our survey respondents (51%) believe the potential loss or weakening of Twitter would be detrimental to journalism, but 17% believe it could reduce reliance on the views of an unrepresentative but vocal elite. LinkedIn (42%), Mastodon (10%), and Facebook (7%), have emerged as the most popular alternatives. Others find it difficult to find a comparable replacement.

As the effects of climate change become clearer, the news industry is reconsidering how it covers this complex and multifaceted story. A specialist climate team (49%) has been formed to strengthen coverage, with a third (31%) hiring more staff. Just under half (44%) say they are incorporating aspects of the climate debate into other coverage (for example, business and sports), and one-third (30%) have developed a climate change strategy for their company.

In terms of innovation, publishers plan to invest more in podcasts and digital audio (72%), as well as email newsletters (69%), two channels that have proven effective in increasing loyalty to news brands. Investment in digital video formats (67%) is also expected to increase over last year, possibly due to TikTok's explosive growth. In contrast, only 4% plan to invest in the metaverse, reflecting growing scepticism about its potential for journalism.

Media companies are quietly incorporating AI into their products to provide more personalized experiences. Almost one-third (28%) say it is now a regular part of their activities, and 39% say they have conducted experiments in this area. ChatGPT and DALL-E 2 are two new applications that demonstrate opportunities for increased production efficiency and the creation of new types of semi-automated content.

What else could happen in 2023?

As print costs rise and distribution networks deteriorate, more newspapers will cease daily print production this year. We may also see a new wave of venerable titles transition to an online-only model.

As a result of news fatigue and competition from streamers, TV and broadcast news will be at the forefront of journalistic layoffs. More TV broadcasters will openly discuss the possibility of discontinuing linear transmissions. Netflix's partial shift to an ad-based model puts additional strain on advertising revenue.

We predicted an explosion of creativity in short-form video storytelling in youth-focused social networks in last year's report. More publishers will embrace these techniques this year as videos become longer in search of long-term revenue.

This year should see a correction in the creator economy. While many individual journalism businesses that began on Substack and other platforms are still thriving, the pressure of delivering to constant deadlines on your own is relentless, and 'creator funds' and other monetary incentives offered by some platforms cannot be relied on to last. Collectives and micro-businesses may become a new trend in 2023.

It's nearly impossible to predict Elon Musk's next move at Twitter, but as the complexities of running a creative and outspoken global community become clearer, there will almost certainly be a huge gap between rhetoric and delivery. Musk is expected to step down as CEO sooner rather than later, and another change of ownership is not out of the question.

Meanwhile, smart glasses and virtual reality headsets, the metaverse's building blocks, will continue to draw attention, especially with Apple expected to join the party with its first headset. It has taken eight years and billions of dollars to add 'legs' to Facebook's metaverse. The release of these wholesome avatars this year will not win over internal or external critics, nor will it make the concept more relevant for journalism.

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