Reuters announced Wednesday that it is cancelling its Next web site project after two years of development and, apparently, a fair amount of money. According to memo to Reuters staffers from CEO Andrew Rashbass, Next remained “a long way from achieving either commercial viability or strategic success, despite some good early reviews.
The goal with Next was to move the wire service beyond its B2B roots and establish Reuters as a major, consumer-facing news brand by creating a new, bells-and-whistles destination web site that would showcase the news organization’s vast content resources and help direct readers to relevant content, as well as a suite of Twitter-style mobile apps with stories embedded in a “river of news.”
That goal apparently remains, in fact, even as the company abandons the Next effort. According to Rashbass’ memo:
It is vital for us also to present our news directly to consumers first, because doing so is a source of revenue and potential profit for our business; second, we can’t achieve our aspiration of being the greatest news organization in the world without a direct consumer audience; third, it is important for our brand strength, for the reach we need so that big names with big news want to speak with us and for keeping us an attractive place for the best journalists; and finally, a successful consumer offering allows us to find new customers for all parts of Thomson Reuters.
But is it vital for Reuters to become a consumer-facing brand? For starters, establishing a new(-ish), general interest consumer news brand seems like a pretty heavy lift at a time when long-established consumer brands with roots in the print age like the New York Times and the Washington Post are struggling. The Post, after all, just sold for a all of $250 million while the Times just sold the Boston Globe more or less for scrap. I’m not sure I’m seeing the financial upside in trying to become a destination consumer brand for news, especially as Reuters has given every indication that it intends to keep producing more or less the same sort of content it’s been producing for decades.
Contrast those deals with the $1.65 billion Yahoo recently spent for Tumblr, or Twitter’s $10 billion pre-IPO valuation. Those valuations, even discounting for new media hype, are not based on the content those platforms host per se but on the value created by their network of users as they generate and share that content.
The critical distinction, in fact, is that Tumblr and Twitter have users, not readers. That’s how value is created on digital platforms: through use, not consumption.
If legacy news organizations are going to survive (or be revived) they will need to learn to treat their audiences as users, not simply readers. Ironically in this case, Reuters ought to be well-positioned to make that transition. It has a long and distinguished history of making its content usable to its B2B clients.
It’s those B2B learnings Reuters should be looking to leverage, through an online strategy based on APIs, real-time content exchanges and an open platform. Consumers today can create their own brands.