Submojour Report: 2.7 Spain: Enthusiasm and fragility

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Luchino Sívori

  • Spanish entrepreneurial journalism is varied: different kinds of journalism take place in distinctive types of more or less sustainable business models.
  • The main trends, however, still confirm a weak and somehow irregular market: funding is not strong and stable yet, and mainstream media still dominates sales and audiences.
  • Entrepreneurial thinking in online journalism is popular and promising, but not yet a “comfortable place” to work nor a sure investment for the future.
  • Primary barriers for startups include internationalization, high competition, low switching costs, high levels of unemployment, fragile support from public administrations and too many professionals for too few jobs.
  • The business model is still evolving and as an overall ‘startup’ industry it has yet to take shape.
  • The cases included: China Files, Mangas Verdes, Portal Parados.

Spanish online journalism today bares little resemblance to how it looked just a decade ago. While in the 1990s only a handful of magazine sites and a few blogs were all the market could give to Internet users with some journalistic interest, today press publication on the Internet has already become quite an industry in its own right, and, despite the fact it is not mature yet, few would deny it is flourishing (Salaverría 2008). There are many media entrepreneurs who are attempting to make waves in this field but it remains to be seen if they can make profitable businesses from this, not least due to the economic crisis.

This is evidenced by the number of digital startup journalism publications, which, since the 2000s has grown to approximately 1,500 sites. The term digital publications here refers to “content makers that are using primarily journalistic criteria and techniques, updating the published periodically or so and with some professional background or skills” (Palacios and Noci 2004). There are an abundance of media publications such as bulletins distributed by enterprises, newsletters, institutional communications, administration reports, personal blogs, and indeed bloggers, that remain outside this categorisation and therefore the total number could be much higher. According to the Información y Control de Publicaciones de España (the Information and Control of Publications of Spain) of those 1,500 players 21% are Internet-only sites, with 79% being a sub-business of a print and/or TV conglomerate (Salaverria, 2008).

Figure 2.7.1: Sources of digital news sites.

Source: IAB Spain, 2011.

In terms of the content on these sites, numerous studies note digital publications have preponderance towards general information. According to a recent study (Fumero and Roca 2011) 59% are mostly general information oriented, while the remaining 40% are usually specialized information. The Spanish market is a complex one, however, with geographical divisions owing to decentralisation. The take-up and opportunity for startups is different in varying regions of the country depending on the legacy media’s stranglehold and cultural differences, such as language. For example, there is a higher number of online general information sites in Catalonia (150 sites), where the main language is Catalan and not Spanish. Here, startups have less competition and can realistically serve an otherwise unserved audience. In the community of Madrid, however, the capital of the state, the sites are less about general information and are more focussed on specialized journalism (190 sites). The reason for this division, relevant for this case country, is related to the fact that whereas in Catalonia and the Basque Country – two historical regions with plenty of autonomy in political and cultural areas – the focus is on cities within the region. In Madrid it is harder to compete in this field as most of the national syndicated publications, like newspapers and magazines, are concentrated there.

 

Figure 2.7.1: Themes within digital news sites.

Source: OJD Interactiva, 2011.

Besides regional differences, we must remember that Spain is also a country eminently tourism oriented: this is a very important factor since it makes some online media owners consider and launch journalistic sites in foreign languages, such as English or German. This affects the value chain of the journalistic startup. According to the last Digital Congress in Huesca (XIII Congreso Digital, March 2012), almost 30% of digital journalism in Spain is made in a different language, especially Catalan (the official language of Catalonia), Basque (Basque Country), English and German (specially in the Balearic Islands).

It is also of note that studies have found sites to be updated irregularly. Different studies (Fumero and Roca 2011) have shown that most of the journalistic sites in the country are upgraded irregularly, usually taking place only after a week of publication/upload.

Table 2.7.1: Frequency of contents’ upgrade

Periodicity Digital media %
Constant 189 14,8 %
Daily 290 22,8 %
Weekly 116 9,1 %
Variable 679 53,3 %

Source: Cibermedios, 2010.

Business models

When mapping the business models of online journalism, four main tendencies can be formulated regarding the general framework in which Spanish cybermedia operate today. Firstly, the websites of print newspapers are king and dominate a lot of the Internet journalism scene. In Spain, the leading online journalism content in terms of audience figures correspond to legacy news corporations, being hegemonic in both national and regional terms.

Secondly, digital media “natives” are still searching for their place in the media landscape. Despite the recent launch of several publishing projects on the Internet – ADN.es (July 2007), Soitu.es (December 28, 2007), El Imparcial (January 22, 2008) and La Nación (26 February 2008), Ara.cat (October 2010)- publications with an online-only presence remain virtually non-existent. At best the situation has been described as “in the embryo process”1 for true pure players, compared to those who have made a site or product in collaboration with mainstream or legacy media. As such, the Spanish startup scene is an immature and relatively weak market, hampered by difficulties such as accessing investment from advertisers, selling content or getting recognition from the public institutions when setting the path of media agendas (El Semanal Digital, 13/3/2007).

Thirdly, it is rare for sites to charge for content. Charging is the exception, not the rule. The hegemony of free content within Spanish online media is normal. It is worth noting that the Internet crisis in the early 2000s prompted some big media companies to opt for a pay-per-read system (the most popular newspaper in the country El País.com, for example). However, in more recent times, this has been abandoned anew and the model was changed in favour of a freemium model, where more and more content and services are offered today for free, and just some products are charged for such as special collections and reports. (Salaverria 2008, 363-373)

Finally, as with many other media markets in this study, Internet advertising spending is growing at a rapid pace year by year. On closer inspection of the figures in the last years, there has been approximately a 10% increase in online ads spend, reaching the highest figure last year2: 180€ millions (Infoadex, 2011; InfoBae, 2011).3 As Simon Waldman, strategy director of the Guardian Group, said in 2010, “Internet has 60% part of the responsibility of today’s press crisis, and just 20% part of its solution.”

Particular trends is online journalism

When focusing strictly on so-called entrepreneurial journalism, Spain has unique issues compared to other EU members. Some of the most well known case studies in the database, for example, report that the market is highly internationalized and entrepreneurs face not only internal rivalry, but also international competition (south and central America players and Hispanic communities in the USA above all). Another finding was that the low switching costs within the products/services make it very easy for users to replace a website for another, since most of the sites – both entrepreneurial and legacy media – were either for free or had very similar costs.

Brand differentiation was said to be high, another key element in today’s media markets in the Spanish database. This is due to the regional and cultural distinctions taking place especially in language matters and political arenas (i.e: Ara.cat in Catalunya, Gara.net in Basque Country, etc.). Media entrepreneurs can cash in by choice of topics and languages to generate bigger or more specific audiences.

Finally, and not surprisingly in a country with high levels of commercial concentration, funding sources both in legacy and startup media are similar or directly the same: Telefónica, El Corte Inglés, Vodafone. This results in tough competition. The exceptions are sites which are profoundly anti capitalist such as Mundosinconexos.wordpress.com and Portaloaca.com, which are national orientated.

Regarding the funding sources in these entrepreneurial startups in this report, there are two main themes: sponsors, donations and local advertisings are the main revenue streams for the so-called “independent media” (Kaosenlared.es, PortalParados.es, MangasVerdes.es, Cugat.cat). Subscriptions, big advertising spends and Google AdSense were the main revenue streams for niche-oriented websites (Ekoos.org, EstrellaDigital.es, LibetadDigital.com, PeriodistaDigital.com, Revista.conlaa.com).

In the first category, a very unique example is the case of PortalParados.es: This site, which focuses on unemployed people, gives assistance to those who are looking for jobs and/or training courses for future employment. It was launched in 2008. Thanks to the sponsors, then, who increased their investment during this last year by 50% thanks to the large number of visitors, the site has been sustainable and profitable – approx. €30.000 a year, with three fix-term employees. It is interesting to note that the more anti-commercial the site content became the more profitable it was. This was a similar story born out at Kaosenlared.es and MangasVerdes.es. The reason for this sort of “independent media” success, according to the site’s CEO Javier Peña, rests with two main factors: the economical crisis that hit Spain making people more “sensitive to social matters”; and the size of the audience – there are a lot of people affected. Instead of focussing on a few people with a typical niche strategy, his was the contrary: to take a wide issue that affects lots of people and aim for the largest audience possible. The main aim was to cover a topic that was being underserved by mainstream media.

In the second category, Ekoos.org provides an interesting case of a niche strategy combining a middle ground between journalism and volunteer work. The site, built out of a mixed agreement between a foundation (HazloPosible.es) and an NGO (Haces Falta.org), launched as a journalistic site funded by subscriptions, advertisement and training with complete editorial autonomy and independence. The key for its sustainability was based mainly on two elements: a focus group concentrated specially in young educated middle-class people –eager to participate/help and be part of volunteer courses, trips, etc.- and citizens with journalistic skills and interests. Together, these two types of audience gave the site what it needs to survive worthily today: visitors with consumable products (courses, consulting, walkabouts) and content producers (citizen journalists, media students, internships).

Other revenue sources were also found across the Spanish startup scene but these were less successful such as: QR codes or augmented reality tools (Fotogramas.es), crowdfunding (Fixmedia.org), philanthropy (Pikaramagazine.com), freemium (Ara.cat) and sites which have combined an interesting mix of fidelity donations and Google AdSense in a way to offer sustainability (cuevana.net, sdd-fanatico.org, seriesyonkis.es, foofind.net, sigoseries.es).

All the sites in the database exemplified a wide range of journalistic outputs, from explicit content producers to aggregators. For example, Pikaramagazine.com is a site fully based on journalistic content (reports, interviews, articles), focussing on what is typically known as serious journalism. In this case, the content is strongly focused on feminism –most of its funders are women’s organizations and stores. Seriesyonkis.es, a peer to peer website, has a journalistic side dedicated to movies and serious reviews and articles, combining both critical and promotional thinking. This is possibly the most popular website in Spain, for downloading movies illegally. Kaosenlared.es, specifically, combines journalism with political activism – classes, forums, speeches. Finally Cugat.cat, a local website made by media students, uses multiplatform devices for its contents productions: a local digital TV channel, an online radio and a website, all of them local-oriented and made only by internal professionals. The case of foofind.com is probably the most unique among this category: funded at first by angel capital and then by a State research and development grant. This two-year-old site is considered in Spain to be an example of “the real Journalism 2.0” (Genet 2011) although its journalistic purpose could be interpreted in many different ways. It is today the Google of peer to peer files: it is a search engine of almost all the shared files available worldwide, given and distributed for free. There is no original content added. It is a huge database of all the files we share, and it offers a curation facility of online navigation. No articles or reports are written in this website in the traditional sense of the term, but its funders and creators, all media students and professional journalists, affirm in their webpage that the site does produce journalistic content (ElPais.com, 2011).

A thwarted enthusiasm

As we have seen, Spanish entrepreneurial journalism on the Internet is varied and extensive: there are many different kinds of journalism taking their place in the media ecology with distinctive types of more or less sustainable business models. The main trends, however, still confirm a weak and somehow irregular market. Funding is not strong and stable yet, and mainstream media still dominate the sales and audiences (Sánchez Tabernero and Carvajal 2004).

Entrepreneurial thinking in online journalism is popular and promising, but the environment has not yet born fruit to create a “comfortable place” to work (the work available is often too flexible, irregular, with low wages, no social security, and no pensions). There is also an inherent doubt in the entrepreneurial community if these sites are a sure investment for the future as only a few cases were actually profitable; the rest could be more aptly described as surviving.

The reasons for this may reside in some of the market characteristics explained at the beginning of this chapter: concentration – both in the media firms and the advertisers – internationalization, high competition, and low switching costs. These factors combine to create high levels of unemployment (56% of young people do not have a job), fragile support from public administrations and a huge number of media students and professionals for so little supply. In this way, all the entrepreneurial digital journalism projects offer a lifeline and a promising business in particular cases, but still a fragile market in industrial terms. As Simon Waldman said, maybe the solution for journalism as we know it is not in the Internet per se, but rather a mix of elements. Some of them, in the Spanish cases, are very physical and real.

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References

El Semanal Digital, “El Gobierno desprecia olímpicamente a nueve millones de internautas”, 13 de marzo de 2007. Link: http://www.elsemanaldigital.com/version_anterior/arts/64694.asp

Fumero, A. & Roca, G. (2007) Web 2.0, Fundación Orange Report, Madrid. Link: http://fundacionorange.es/areas/25_publicaciones/WEB_DEF_COMPLETO.pdf

Palacios, M. & Díaz Noci, J. (2007) (eds.). Ciberperiodismo: métodos de investigación. Una aproximación multidisciplinar en perspectiva comparada. Bilbao: Servicio Editorial de la Universidad del País Vasco. Link: http://www.argitalpenak.ehu.es/p291-content/es/contenidos/libro/se_indice_ciencinfo/es_ciencinf/adjuntos/ciberperiodismo.pdf

Salaverría, R. (2008) La Investigación sobre Ciberperiodismo en España: Tendencias, resultados y perspectivas, in López García G. (ed.) `Comunicación Local y Nuevos Formatos Periodísticos en Internet: Cibermedios, confidenciales y weblogs, University of Valencia, Valencia. Link: http://cibermediosvalencianos.es/ComunicacionLocal.pdf#page=15

Sanchez Tabernero, A. & Carvajal, M. (2003) Media Concentration in the European Market, The International Journal on Media Management, Vol.5, No.4, 308. Link: http://www.citeulike.org/article/40166

 

 

1 In Spain, the first online newspaper with general information was Estrella Digital, founded in 1998. From then on, a large number of similar initiatives appeared: among the most popular, El Semanal Digital, Diariocritico.com, Libertad Digital, Diario Ibérico, ElPlural.com, Diari de Barcelona and Ara.cat (Apezarena, 2005).

2 Despite these impressive figures, everything is far from perfect: as some journalists say in the II Congrés de Comunicació Electrónica in Barcelona (Electronic Communication Congress, Barcelona, 2008) this is still “a market with more future than present” (Colegi de Periodistes de Catalunya, 2008).

3 This type of ads revenue represents today a 13.6% of total investment in media, occupying the second place after Newspapers (19%). (IAB Spain, 2011).

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