Submojour Report: 2.6 Italy: An unfinished transition

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Nicola Bruno

  • Rather than competing with legacy media players, startups are carving out roles to become their allies, as in the UK.
  • A very small staff that works both in content production and in new business seems to be the most efficient.
  • Very low operating costs that mostly cover personnel costs and, to a lesser extent, research and development are the norm. This includes work that is organised to take advantage of partnerships with outside companies for specific skills (graphics, design, programming).
  • Several have taken the decision not to use advertising to finance their editorial initiatives, as in France.
  • Startups are working on the development of high value-added products that may be of interest to both media and non-media companies.
  • There are highly diversified sources of revenue that range from providing content to training, special products and organisation of events.
  • The journalistic startup scene is potentially thwarted by retardedness in Internet penetration, particularly compared to other European countries.
  • The cases included: Formica Blu, China Files, Effecinque, Varese News, News 3.0, YouReporter and FpS Media.

The Italian media industry is going through a transition in which traditional players continue to play a key role, and yet they have not completed the switchover to digital because of structural limitations and a lack of innovation. According to the latest data from the research institute ReportLinker (2011), “the Italian media industry had total revenue of $28.8 billion in 2010, representing a compound annual growth rate (CAGR) of 2.3% for the period spanning 2006–2010”. Around half ($13,333.8 million) of this revenue was generated by television (broadcasting and cable) alone, which has traditionally been the most important segment of the Italian media system. The newspaper market follows at a safe distance, with total revenue of $2.6 billion generated in 2009.

The latest data released by the Censis Institute (2011) on media consumption in Italy confirms the enduring dominance of traditional players to the detriment of fully digital ones, which are still in the minority in Italy. Compared with the 80.9% of the population that gets its information through TV, only 29.5% of users get information from web sites. Radio continues to be a leading form of media (56.4%), while newspapers (whether purchased or free press) are read by less than one out of two citizens (47.7%).

Table 2.6.1: The most widely used sources of information

Media % of the population
TV 80,9
Radio 56,4
Newspaper 47,7
Weekly and Monthly Magazines 46,5
Online Media Outlets 29,5

 

Source: Censis 2011

 

Television’s dominance over other media has been confirmed by figures from the advertising world as well. As can be seen in the table below, it has a market share of over 57%. Investment in online advertising continues to be modest (6.5% of the entire market), but it should be noted that this sector is the only one that has grown with respect to the previous year (+14.5%), as TV and newspapers/magazines have been in decline for several years.

Table 2.6.2: Italian advertising market, Jan.–Dec. 2011

Media Advertising spending

(2011)

Market share (2011) Growth

(2011 v. 2010)

Television € 3,685 m 57.8% -3.2%
Newspapers € 971 m 15.2% -8.2%
Magazines € 636 m 10.0% -2.8%
Radio € 452 m 7.1% -7.1%
Internet € 412 m 6.5% 14.5%
Outdoor € 177 m 2.8% -10.8%
Other € 38 m 0.6% -15.7%
Total € 6,371 m 100% -3.6%

 

Source: Zenith Optimedia (all figures in current Euros)

As in other European countries (Levy and Nielsen, 2010), the traditional press in Italy has found itself in the middle of a serious economic and identity crisis. This is not only due to an ever-shrinking advertising market, but also to the inexorable decline in sales of newspapers and the overall number of readers.1 At the same time it can be noted that online versions of the major newspapers today are able to attract a wider audience than the traditional elite reached by the press in Italy (Sorrentino 2006). As shown in the table below, online versions of the two most widely read newspapers in Italy (Corriere della Sera and Repubblica) now have a daily readership between 3 and 4 times larger than that of their print versions.

Table 2.6.3: Newsstand copies vs. Online unique visitors

Newspaper Newsstand copies sold per day* Online unique visitors per day **
Repubblica 406,803 1,707.388
Corriere della Sera 440,424 1,366.966
La Stampa 238,513 451,863
Il Sole 24 Ore 170,010 331,051
Il Giornale 176,561 190,815

 

Sources:  * Ads – February 2011  ** Audiweb, powered by Nielsen – June 2011

 

Thanks to initial online investments dating back to 2006, Repubblica.it and Corriere.it have been able to consolidate a “duopoly” in online news, which the other newspapers have not been able to challenge over the last 15 years (direct competitors such as La Stampa and Il Sole 24 Ore have about a third of the traffic of Repubblica.it and Corriere.it). As much as they continue to be widely read,2 online versions of major Italian newspapers have not introduced any significant innovations. As stated by the European Journalism Centre (2010), “So far newspaper publishers have failed to grasp the opportunities opened by ICT. The digital versions of most newspapers often look like mere “transpositions” of their paper versions and lack real value in terms of content, services offered and aesthetics”.

The newswire model – in which a continuous stream of the latest news in politics, economics, and culture is interspersed with gossip, fun facts, and other infotainment – is still predominant. An omnibus journalistic model, which is historically typical of Italian news (Sorrentino 2006), then, continues to be reproduced, in which – unlike in other European countries – there has never been a real distinction made between high quality newspapers (broadsheets) and lowbrow ones (tabloids). All this is reflected in the quality of information offered up, as pointed out by the authors of the Soros Foundation’s report Mapping Digital Media: Italy (2011): “Real-time pressure of online news production has affected journalists’ ethics of verification, leading to compromises on the extent to which stories are verified. (…) Also, digitization has not enhanced the prospects for investigative journalism, which remains the preserve of the large television networks”.

Between the digital divide and survival of the fittest

Despite a digital divide that is far more pronounced than in other European countries (according to Eurostat, only 21.3% of the population has access to broadband networks at home, compared to an EU15 average of 28.1%)3, the number of Italians that use the Internet has seen constant growth for at least a decade. According to the findings of the Nielsen research institute, in March 2012 over 50% of the population went online at least once a week. This constitutes 27.7 million users, a 7% increase in a year. On an average day, 13.7 million users go online, each person navigating for 1 hour and 18 minutes and consulting 147 pages.

The lack of infrastructure (particularly in terms of broadband penetration) has unquestionably had a negative impact on the growth of Internet usage, affecting the supply of online information as well. The web services with the highest number of unique users remain the U.S. ones, Google, Facebook and MSN, which also dominate much of the online advertising market. In the top ten there are only a few Italian web properties, such as the web-portals Virgilio and Libero (which, along with web services such as e-mail, weather, etc., also offer informational content).

Table 2.6.4: Italy, top 10 websites – June 2011

Website Monthly unique users
Google 24,039,000
Facebook 20,836,000
YouTube 16,742,000
MSN/WindowsLive/Bing 16,446,000
Virgilio 14,680,000
Yahoo! 14,092,000
Microsoft 13,992,000
Libero 13,187,000
Wikipedia 12,363,000
Blogger 10,153,000

 

Source: Audiweb, powered by Nielsen, June 2011.

If search engines, social networking and blogging are excluded, the online news sources that are most widely read are those which are backed by major print newspapers, such as La Repubblica, Corriere della Sera and TGCOM (the web site for Mediaset, the TV channel owned by Silvio Berlusconi).

Table 2.6.5: Italy, top 10 news websites

Website Monthly unique users
La Repubblica 8,607,000
Corriere della Sera 7,895,000
TGCOM 6,029,000
Libero News 5,022,000
La Stampa.it 4,010,000
ANSA 3,715,000
Quotidiano.net 3,354,000
Virgilio Notizie 2,383,000
Google News 2,000,186
Il Fatto Quotidiano 2,119,000

 

Source: Audiweb, powered by Nielsen – June 2011

Two exceptions and three innovations

In this environment and media landscape – where the major US players have swallowed up a large part of the traffic and mainstream media dominates most of the informational space online – it clearly is not easy for entrepreneurial, Internet-based journalism initiatives to grow.

Unlike European countries like France and Germany (Bruno and Nielsen, 2012), Italy has only recently seen the launch of independent web-only news outlets with national coverage.

Between 2000 and 2010, online information was starting to come to life in the rest of Europe, information that by now has been consolidated. In Italy, however, only two exceptions have been able to break in. These exceptions, moreover, are very different from one another and are not aimed at a general or national audience.

The first exception is the gossip site Dagospia: created in 2000 by the journalist and TV host Roberto D’Agostino. It immediately adopted the model of a US site, The Drudge Report, mixing gossip and aggregation of news published on other sites. Twelve years after its launch, Dagospia remains a small-scale operation with a limited and loyal audience (around 80,000 unique visitors a day); it is economically stable, thanks in part to advertising revenue that covers a large part of its operating costs (estimated at around 500,000 euros a year).

The hyperlocal site VareseNews, however, is entirely different. Created in 1996 and even now one of the best examples among the Italian pure players, it takes an approach that is highly open to citizen-readers (but without being a site for citizen journalism). Over the years it has grown to become the most widely read site in the area, topping even the local newspaper that dominated local news for decades. VareseNews is an innovative case not only because of its ability to get the community involved, but also because of the unique ownership structure that sets it apart: shares of the company are owned by major industry associations (unions, manufacturers, artisans) in the region; this ensures an economic stability that other hyperlocal news outlets are struggling to achieve.4

In any case, Italy had to wait until 2010 to see the online appearance of web-only journalistic initiatives aimed at a national audience, which France saw starting in 2007 with the launch of sites like Rue89, Mediapart, Slate, etc. Between the beginning of 2010 and 2011 three sites emerged that have attracted a lot of interest beyond their borders (Cherubini, 2011): Il Post, Lettera43 and Linkiesta. All three of these news outlets were established by journalists that were very well-known in the Italian journalistic world and who, at a certain point in their careers, decided to leave print or TV in search of a new online experience. The publishing models and organisational structures of these three news outlets are very different from one another and deserve consideration.

Il Post aims to aggregate news selected by a reduced editorial staff (7 journalists) and by over 50 bloggers; it is presented as a sort of super-blog, centred around user interaction and based on original content that is presented as an alternative to what is offered by traditional newspapers. A lot of attention is paid to quality and fact-checking; this, combined with its experimentation with innovative formats (including live coverage of current events), makes Il Post an interesting example. However, as of March 2012, it had around 27,999 unique users per day, which cannot be enough for a site whose business model (for now) is the offer of free content paid for by advertising.

Linkiesta, on the other hand, aspires to be a site for analysis and investigative journalism. It has a large editorial staff (15 journalists) and does beat reporting on specific issues (such as finance and the government’s economic policies). Even if it is more traditional than Il Post, Linkiesta also experiments with new formats, as can be seen by its extensive use of infographics and visual content. Even here, however, the number of users is very small (16,392 on an average day in March 2012). The attempt to introduce paid content through a paywall is not giving the hoped-for results, at least for now: as of February 2012 only 500 users had subscribed (Bruno and Nielsen, 2012, p.97).

Lettera43 is a news outlet that is part of a much more ambitious publishing project: the start-up, News 3.0, financed with around 5 million euros from several leading figures in Italian capitalism. Launched by a familiar face in Italian economic journalism, it relies on a rich editorial selection and a much more traditional approach to online news: the goal, in fact, is to compete on the same playing field as the big players in online news, offering both general content (through the site Lettera43) and more niche-based content (through specialised verticals such as EconomiaWeb, ModaInforma).

Of the three start-ups that have recently appeared in Italy, the only one included in the SuBMoJour database was News 3.0, as, according to data released by its editor-in-chief, Paolo Madron, it is the only one to have consistently generated revenue over the course of 2011 (around 1.3 million euros). Even if this revenue is not yet enough to cover its high operating costs (estimated at around 1.8 million euros a year), it is still a very encouraging sign for the project’s sustainability.

Small and flexible: the news-agency model

However, it is a different model of journalistic enterprise that in Italy has been proven more popular: the agencies or services that work from a business-to-business point of view. This is the case for the four start-ups that have been included in the SuBMoJour database: Formica Blu, China Files, Effecinque5, and FpS Media. As Mauro Sarti, a professor and expert on journalism in Italy who has devoted an interesting article to the topic (Sarti, 2011) explains, these are “specialised and innovative agencies covering everything from the publication of breaking news online to scientific information, ecology, the environment, books, and even major international broadcasting. There are those that create issue-based pages, and those which focus on editing dozens and dozens of magazines in the sector. Working in outsourcing has become a professional lifestyle, rather than an obligatory choice. (…) The agencies for publishing services that have sprung up in Italy over the last few years are much more than just organisations created to rent out journalistic work at a lower cost, and many are offended just hearing this. It is a new market, one which editors can no longer do without.” (Sarti, 2011).

These agencies often reason with the logic of a start-up but without being backed by major funding: they focus on keeping costs low while developing innovative services and products in order to stand out from traditional agencies. This is the case, for example, of Formica Blu (specialising in scientific journalism) and Effecinque (specialising in technology and digital culture), which carry out data visualisation and multimedia storytelling projects as they experiment with new formats for long-form journalism. Other similar ones include China-Files (which is trying to create a market niche by covering news coming from China) and Fps Media (an agency created by a Masters in Journalism class that decided to work together instead of working as freelancers). Rejecting, right from the start, the idea of competing in the barely profitable advertising market, these agencies are trying to become sustainable by offering quality content that covers gaps left by the legacy media players, who are not geared towards innovation.

There is also another Italian example that differs from the aforementioned ones in that it is neither a real online news outlet nor an agency providing journalistic services, but rather a technological platform. YouReporter, a citizen journalism service based on the sharing of videos and images, is becoming increasingly important at times of breaking news. YouReporter represents another anomaly in a country where the most widespread 2.0 platforms are foreign ones.

Common features

It is not easy to identify common features that ensure the sustainability of entrepreneurial, Internet-based journalism initiatives in Italy. Varese News and YouReporter have demonstrated their ability to identify niche markets – hyperlocal in the case of the first one, citizen journalism in the second one – still not adequately served by mainstream media. This is a requirement that can make all the difference in a country where the legacy media players are still dominant but are also going through a serious economic and identity crisis.

This differs from the case of the four agencies included in the database. As much as they are distinct from one another, several common points emerged from the interviews conducted. They have made a conscious decision not to compete with legacy media players, but to become their allies. They operate with a very small staff that works both in content production and in new business. This is concurrent with several of the startups across other countries. The focus is on very low operating costs, that mostly cover personnel costs and, to a lesser extent, research and development. Work that is organised to take advantage of partnerships with outside companies for specific skills (graphics, design, programming) is most lucrative and the decision not to use advertising to finance their editorial initiatives is common. The development of high value-added products that may be of interest to both media and non-media companies is showing potential as are the highly diversified sources of revenue that range from providing content to training, special products and organisation of events.

From this point of view, the four news agencies included in the database seem to adhere quite a bit to the profile of successful European start-ups that is outlined in Survival is Success (2012): “The journalistic start-ups most likely to thrive are those that deliver a distinct, quality product, operate with lean organisations, have diverse revenue streams, and are oriented towards niche audiences poorly served by existing legacy media” (Bruno and Nielsen, 2012, p. 2).

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References

Bruno, N. & Nielsen, R. (2012) Survival is Success Journalistic online start-ups in Western Europe, Reuters Institute for the Study of Journalism http://
reutersinstitute.politics.ox.ac.uk/about/news/item/article/survival-is-
success-new-risj-chal.html

Censis (2011) 9° Rapporto Censis/Ucsi sulla comunicazione http://www.censis.it/5?resource_23=111859

Cherubini, F. (2011)1As the Italian press struggles, could it find salvation in investment in online, or newsroom integration?, Editor’s Weblog http://www.editorsweblog.org/2011/04/06/as-the-italian-press-struggles-could-it-find-salvation-in-investment-in-online-or-newsroo

Levy, D. and Nielsen, R. (2010) The Changing Business of Journalism and its Implications for Democracy, Reuters Institute for the Study of Journalism http://reutersinstitute.politics.ox.ac.uk/?id=560

ReportLinker (2011) Italy: Media Industry Guide http://www.reportlinker.com/p0470332-summary/Italy-Media-Industry-Guide.html

Santoro, P. (2012) Disastri quotidiani, Il Giornalaio http://giornalaio.wordpress.com/2012/03/29/disastri-quotidiani/

Sarti, M. ( 2011) Invisibili e indispensabili. Service e agenzie. Il lavoro giornalistico ai confini della professione, Problemi dell’informazione (2011 / 1)

Sorrentino, C. (2006) Il campo giornalistico: i nuovi orizzonti dell’informazione, Carocci

Wider resources

Giomi, E. (2010) Media Landscape: Italy, European Journalism Centre http://www.ejc.net/media_landscape/article/italy/

Mazzoleni, G., Vigevani, G. & Splendore, S. (2011) Mapping Digital Media: Italy, Open Society Foundations http://www.soros.org/initiatives/media/articles_publications/publications/mapping-digital-media-italy-20111010

1 According to Censis 2011, there was a 7% decline in newspaper readership between 2009 and 2011.

2 After years of constant growth, a marked change was seen over the last few months of 2012 for the biggest online newspapers: in many cases traffic went down at an unexpected rate, even reaching lows of -60% (Santoro, 2012). This is a sign that, after years of a boom in new users, the audience is now stabilising.

3 http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language
=en&pcode=tsiir150

4 Hyperlocal web sites have seen rapid growth over the past few years. As reported in Bruno and Nielsen (2012, p. 90), “More than 50 hyperlocal publishers are federated in ANSO (Associazione Nazionale della Stampa Online). Together the federation claims its members publish more than 2,000 original news stories every day and reach 6 million unique readers per month.”

5 Disclaimer: the writer of this section is one of the co-founders of the Effecinque agency

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