Category: UNCATEGORIZED

If there was any doubt that yesterday’s flogging of big tech CEOs by Senate republicans was anything other than an electioneering stunt, president Trump has thumped the point home by tweeting a video message to voters in which he bashes “big tech” as (maybe) too powerful but certainly in need of being “spoken to” and (maybe) more.

The not-so-subtle suggestion being that a vote for Trump is a vote to break up the likes of Facebook, Google and Twitter .

In the video Trump signposts the DoJ’s antitrust suit against Google — ending with a call to his supporters to get out the vote. So the president is brandishing an anti-big tech message as the latest cudgel in his culture war, just a few days ahead of the 2020 US presidential election.

“For a long time I’ve been hearing about how powerful big tech is, whether it’s Facebook or Twitter or Google or any of them,” he begins the video, before making a quick vanity-dig about winning the 2016 election regardless of the “powerful” platforms being “totally against me”, as he glibly claims — entirely failing to mention that Facebook actually allowed its network to be a free and unfettered conduit for millions of pieces of anti-Clinton, pro-Trump propaganda cooked up in Russia.

Instead, he segues into a claim that the platforms have taken their power to a “a new level”, as he puts it — accusing them of “suppressing the corruption of Joe Biden” by ‘not letting the stories out’.

This is a direct reference to Trump’s Democrat challenger for the White House, and an indirect reference to a controversial New York Post story about a cache of emails purported to have been found on laptop hardware owned by Biden’s son Hunter — but which carry the distinct whiff of another election-focused political disinformation operation.

The big difference this time around is that ‘big tech’ is rather more alive to the reputational risks to their platforms and companies if they’re found ignoring another orchestrated episode of election interference.

Hence both Facebook and Twitter limited the sharing of the Post’s story.

Twitter initially blocked links to it citing its hacked materials policy — though it later revised the policy after Republicans screamed ‘censorship’. And CEO Jack Dorsey got plenty more grilling on that theme at yesterday’s Senate hearing as Republican senators used the hearing as an opportunity to try to mint gotcha soundbites on bogus claims of big tech’s ‘anti-Conservative bias & censorship’.

The tech CEOs mostly had to sit there and be bashed as it’s not politic for them to suggest Republicans might be experiencing more content moderation vs liberals because they break the rules more. Instead the electioneering pantomime ran on for hours.

Trump is just closing the loop on the politically biased soundbite fest by trying to turn tedious and trumped up claims of anti-Conservative bias into a bald ‘get out the vote’ message to his base.

“Big tech has to be spoken to and probably in some form has to be stopped,” is the closest he gets to an actual policy position here. So Trump voters shouldn’t get their hopes up that he might actually deliver a break up of Facebook et al either.

The ironies are of course hot and heavy, given evidence shows social media algorithms’ baked in preference for spreading controversial/outrageous content further and faster than the blander, more nuanced stuff that’s likely to be closer to the truth. Simply put, it’s human nature to click on the crazy stuff — and ad-funded platforms are fuelled by eyeball engagement. So lies have been great for big tech’s bottom lines.

That then means these very same ‘big tech’ platforms tend to amplify Republican messaging — certainly of the Trumpian flavor, i.e. where trumped up claims, lacking in evidence and/or reality, are preferred. (Like, say, Trump calling Mexicans rapists or claiming the pandemic is over as thousands continue to die. Or that he has immunity from COVID-19 when the scientific consensus is we don’t know how long a person may be immune after fighting off the virus and we know some people have been reinfected with COVID-19, and so on.)

So the scale of the nonsense being peddled by Trump’s Republican party is indeed very strong and very powerful. But then, well, we haven’t been in Kansas for a long time.

At the time of writing Twitter has also not placed any kind of contextual labelling on Trump’s tweet — despite the contents of the video arguably containing misinformation about big tech itself. But that’s just one more irony to add to the steaming pile.

And if you’re feeling a pang of pity for the tech CEOs caught in this partisan bind it pays to remember they made their bed by claiming to operate community and content policies they didn’t — and still don’t — properly enforce. Which makes Trump their very own monster.

Fintech startup Upgrade has been quite successful with its two flagship products — a low-cost credit card and personal loans. The company is making its credit card more attractive by adding rewards.

Upgrade Card consumers will earn 1.5% cash back on all purchases made with the card — there’s no specific category, no partner retailer, no point system. It’s a straightforward, uncapped cash back program.

The company wants to encourage users to pay down their debt. So Upgrade isn’t encouraging you to spend more to earn more. Instead, you receive your rewards when you make your monthly balance payments.

With its credit card, Upgrade is trying to provide a consumer-friendly credit card. And Upgrade CEO Renaud Laplanche believes that it starts with lower rates. Instead of a normal entry rate of 12% to 13%, Upgrade promises an entry rate of 6.99%.

In order to avoid the endless trap of credit card debt, Upgrade combines monthly charges into installment plans that you can pay back over 24 to 60 months. You pay down your balance at a fixed rate with equal monthly payments. Of course, you can also prepay any amount — there’s no penalty.

When you sign up, you get a virtual card immediately and a Visa-branded plastic card a few days later. The company gives you a credit line of $500 to $2,000.

Over the past three years, Upgrade has issued over $3.5 billion in credit. The company is now on a run rate of $125 million in annual recurring revenue. It is profitable.

Interestingly, Upgrade describes itself as a neobank. There are many successful neobanks out there — such as Chime, Revolut, N26 and Nubank — but most of them focus on checking accounts and debit cards. They mostly generate revenue from interchange fees on card transactions, premium subscriptions with insurance packages and referral fees.

Upgrade has started with a different product offering focused on credit, which generates a lot of revenue. The company is now working on other banking products so that it can become a true alternative to traditional retail bank accounts. They should launch new products in the coming weeks.

One of the key side-effects of the Covid-19 pandemic has been how it has played out in the economy. There are currently 12.6 million people out of work in the U.S. alone, with estimates from the International Labour Organization noting that globally number some 245 million full-time jobs have been impacted.

To meet some of that challenge, today, LinkedIn is launching a new Career Explorer tool to help people find new jobs. Out in beta today in English (and adding further languages soon), this is not another job search engine. It’s a tool that matches a person’s skills with jobs that she or he might not have otherwise considered, and then provides pointers on what extra skills you might want to learn to be even more relevant.

Alongside this, LinkedIn is launching a new skills portal specifically to hone digital skills; subtle profile picture “frames” to indicate when you’re looking for work, or when you are hiring; and interview prep tools.

The Career Explorer tool is perhaps the most interesting of the new features.

Built with flexibility in mind, LinkedIn is leaning on its own trove of data to map some career paths that people have taken, combining that with data it has on jobs that are currently in higher demand, and are extrapolating that to help people get more creative about jobs they could go for.

This would be especially useful if there are none in their current field, or if they are considering using the opportunity of a job loss to rethink what they are doing (if Covid-19 hasn’t done the rethinking for them).

The example that LinkedIn gives for how this works is a notable one. It notes that a food server and a customer service specialist (an in-demand job) have a 71% skills overlap.

Neither might be strictly considered a “knowledge worker” (interesting that LinkedIn is positioning itself in that way, as it’s been a tool largely dominated by the category up to now), but both interface with customers. LinkedIn uses the Explorer to then suggest what training you could undertake (on its platform) to learn or improve the skills you might not already have.

The Career Explorer is a development on the skills assessment tool that LinkedIn launched last year, which were tests that people could take to verify what skills they had and what skills they still needed to learn for a particular role.

In the midst of a pandemic, that effort took on a more pointed recovery role, with skills training developed in partnership with Microsoft (which owns LinkedIn) specifically to address digital gaps in the employment market, which when filled could help the economy rebuild. LinkedIn said that to date, around 13 million people have used the those tools to learn new skills for the most in-demand jobs.

The idea with these new tools is that while people may be losing their jobs, there is still work out there. LinkedIn itself says it has more than 14 million positions open right now, with close to 40 million people coming to the site to search for work every week, and three people getting hired each minute. So the aim is to figure out how best to connect people with the opportunities around them.

And given that LinkedIn, now with 722 million users, has long made recruitment and job searches a central part of its business — both in terms of traffic and in terms of the revenue it makes from those services; I often think of it as the place where professionals go to network and look for work — launching these tools not only can help LinkedIn be a more useful partner in the job-search process. It helps keep that jobs business evolving at a time when it otherwise might feel somewhat stagnant. And after all, despite the activity on LinkedIn, unemployment remains high and some believe will get worse before it gets better again.

The COVID-19 pandemic has hit the hospitality industry especially hard, and hotels around the world are looking for ways to regain revenue. Today, Marriott International and Grab announced a partnership that will cover the hospitality giant’s dining businesses in six Southeast Asian countries: Singapore, Indonesia, Malaysia, the Philippines, Vietnam and Thailand.

Instead of room bookings, Marriott International deal with Grab focuses on about 600 restaurants and bars at its properties in the six Southeast Asian countries, which will start being added to GrabFood’s on-demand delivery platform in November. A joint announcement from the companies said the deal represents Marriott International’s “first extensive integration with a super app platform in Southeast Asia and Grab’s most comprehensive agreement with a hospitality group to date.”

Marriott International is the world’s largest hotel company. During the second quarter, as the pandemic curtailed travel and in-person events, it reported a loss of $234 million, compared to the profit of $232 million it had recorded a year earlier. Chief executive Arne Sorenson called it “the worst quarter we have ever seen,” even though business is gradually recovering in China.

The Marriott-Grab integration means the two companies will link their loyalty programs, so GrabRewards points can be converted to Marriott Bonvoy points, or vice versa. Marriott International’s restaurants and bars that accept GrabPay will also have access to Grab’s Merchant Discovery platform, which will allow them to ping users about local deals and includes a marketing campaign platform called GrabAds.

Other hospitality businesses that Grab already partners with include Booking.com and Klook. Klook is among several travel-related companies that have recalibrated to focus on “staycations,” or services for people who can’t travel during the pandemic, but still want a break from their regular routines.

Ford plans to reveal in November an all-electric version of its Ford Transit cargo van, the company said Wednesday as part of its broader third-quarter earnings report. The unveiling will showcase an electric van for all of the company’s global addressable markets.

The company has been talking about producing an electric Transit van for more than a year now. Ford announced in April 2019 plans to sell an all-electric Transit for the European market by 2021. Then this spring, Ford said it would also produce and sell an all-electric version of the cargo van for the North American market starting with the 2022 model year.

The electric Transit cargo van is part of Ford’s more than $11.5 billion investment in electrification through 2022, and more specifically, a strategy to go after commercial customers.

The decision to include commercial vans in its EV strategy is linked to sales in North America and the company’s outlook on future growth. The Transit van and the Ford F-150 are the two most important, highest volume commercial vehicles in our industry, CEO Jim Farley said during an earnings call Wednesday with analysts.

“We own ‘work’ at Ford and these electric vehicles will be true work vehicles, extremely capable and with unique digital services and over-the-air capabilities to improve the productivity and uptime of our important commercial customers,” he said. “We believe the addressable market for a fully electric commercial van and pickup — the two largest addressable profit pools and commercial — are going to be massive and we’re going straight at this opportunity.”

The announcement was tucked inside the company’s third-quarter earnings, which crushed Wall Street expectations. Ford reported Wednesday net income of $2.4 billion on $37.5 billion in revenue. Ford said it expects a positive full year 2020 adjusted earnings before interest and taxes, reversing a dimmer outlook it had previously provided.

Ford plans to reveal in November an all-electric version of its Ford Transit cargo van, the company said Wednesday as part of its broader third-quarter earnings report. The unveiling will showcase an electric van for all of the company’s global addressable markets.

The company has been talking about producing an electric Transit van for more than a year now. Ford announced in April 2019 plans to sell an all-electric Transit for the European market by 2021. Then this spring, Ford said it would also produce and sell an all-electric version of the cargo van for the North American market starting with the 2022 model year.

The electric Transit cargo van is part of Ford’s more than $11.5 billion investment in electrification through 2022, and more specifically, a strategy to go after commercial customers.

The decision to include commercial vans in its EV strategy is linked to sales in North America and the company’s outlook on future growth. The Transit van and the Ford F-150 are the two most important, highest volume commercial vehicles in our industry, CEO Jim Farley said during an earnings call Wednesday with analysts.

“We own ‘work’ at Ford and these electric vehicles will be true work vehicles, extremely capable and with unique digital services and over-the-air capabilities to improve the productivity and uptime of our important commercial customers,” he said. “We believe the addressable market for a fully electric commercial van and pickup — the two largest addressable profit pools and commercial — are going to be massive and we’re going straight at this opportunity.”

The announcement was tucked inside the company’s third-quarter earnings, which crushed Wall Street expectations. Ford reported Wednesday net income of $2.4 billion on $37.5 billion in revenue. Ford said it expects a positive full year 2020 adjusted earnings before interest and taxes, reversing a dimmer outlook it had previously provided.

Today’s Senate hearing on immensely important legal protections for online platforms quickly proved to be little more than an excuse for Senators to accuse the CEOs of Twitter, Facebook and Google of partisan interference with next week’s election. The actual law being considered for revision was mentioned only a handful of times in the nearly four-hour hearing, the balance being taken up by partisan bickering and, ironically, misinformation.

The hearing, assembled and convened with naked haste in order to get ahead of the election, was dominated by Republican bullying and bloviating and Democratic expressions of distaste. Section 230, a law which is under serious and justified consideration for revision, was barely a footnote.

That the hearing, which promised “legislative proposals to modernize the decades-old law,” was thrown together at the last minute was evident from a lack of focus or coordination. Senators asked redundant questions, presented scant and conflicting evidence of the practices they accused the companies of, and generally used the time to mint sound bites with little substance.

An excellent example of all this was the case, brought up three separate times by Republican Senators, of tweets by the Iranian Ayatollah Khameini calling for war and questioning the Holocaust, which were not taken down, while Trump’s tweets regarding COVID-19 had warnings placed on them. Why, they asked again and again, does this not constitute a double standard and a clear example of bias against Trump?

Twitter CEO Jack Dorsey explained what should be a well known fact by now, especially by legislators who purport to have an interest in this topic: that there is no policy for general misinformation and that world leaders get special consideration anyway, and that the policies that resulted in warnings placed on tweets lately relate specifically to public health and election-related misinformation. This issue has been raised before, you see, and the explanation is quite simple.

The Republican Senators avoided Section 230 altogether, using their time to berate Dorsey, Alphabet/Google CEO Sundar Pichai, and Facebook CEO Mark Zuckerberg:

• An irritable Sen. Ted Cruz (R-TX) shouted over the hearing’s guests, calling those three specifically “the greatest threat to free speech in America.”
• Sen. John Thune (R-SD) accused the companies of not having sufficient “ideological diversity” in their leadership, and others asked the CEOs to report the party affiliations of their employees. (The CEOs said they don’t ask, though Pichai admitted to Thune’s obvious pleasure that it the young, highly educated tech sector  skews left.)
• Sen. Marsha Blackburn (R-TN) said Twitter had “censored Donald Trump 65 times,” and Biden zero times, though as Dorsey pointed out none of Trump’s tweets have in fact been removed.
• Sen. Mike Lee (R-UT) asserted that the companies were committing false advertising in saying they were not politically motivated. He then asked the CEOs to provide “examples of censoring liberals.” They bridled at being asked to tacitly admit what they do is censoring, but with that reservation did provide examples — which Lee dismissed as insufficient.
• Sen. Ron Johnson (R-WS) accused the platforms of deliberately exerting influence on elections, citing as misinformation and political bias Twitter declining to take down a tweet that was obviously satirical.

Despite repeatedly claiming that the platforms were biased towards the left, the Republican contingent did not produce any examples of material from Democrats that should, in their estimation, have been taken down but was not. This seems an important part of making the argument, or it leaves open the distinct possibility that Republicans simply break the rules more.

Only Sen. Shelley Moore Capito (R-WV) didn’t get the memo, and proffered constructive, informed questions relating to Section 230. She asked the tech leaders whether they thought the law’s use of the phrase “otherwise objectionable” as a catch-all was too expansive. They replied unanimously (and predictably) that it was not, and that, as Alphabet/Google CEO Sundar Pichai put it, the wording “is the only reason we can intervene with certainty” in cases like the dangerous “Tide pod challenge” and other situations that aren’t covered specifically by the law. Sen. Capito, to all appearances, took their answers seriously.

The Democratic Senators, for the most part, cannot be said to have addressed Section 230 substantively either, but a few took the opportunity to address the issue ostensibly at hand.

Sen. Tammy Baldwin (D-WI) asked about the failure of Facebook to take down the Kenosha Guard group, which was actively fomenting violence against protestors, despite hundreds of complaints. She managed to extract from Zuckerberg that Facebook had stopped making group recommendations based on political preferences, while it has worked to clean up its private groups, now notorious for conspiracies and violent militias.

Sen. Maria Cantwell (D-WA) had a timely reminder about what free speech actually is: “Maybe we need to have a history lesson from high school again — yes, free speech means that people can make outrageous statements about their beliefs. What the CEOs are telling us here is what their process is for taking down health care information that’s not true, that is a threat to the public, and information that is a threat to our democracy.”

The others primarily used their time to register their discontent with the obvious election-related motivations of the hearing.

Sen. Brian Schatz (D-HI) led the pack by declaring he would not take part. “I’ve never seen a hearing so close to an election on any topic, let alone on something that is so obviously a violation of our obligation under the law and the rules of the Senate to stay out of electioneering,” he said. “We never do this, and there’s a very good reason that we don’t call people before us to yell at them for not doing our bidding during an election. This hearing is a sham. I will be happy to participate in good faith, bipartisan hearings when the election is over.”

Sen. Ed Markey (D-MA) derided the “false narrative about anti-conservative bias,” saying “the issue is not that the companies before us today are taking too many posts down, the issue is they are leaving too many dangerous posts up, in fact amplifying harmful content.” Out of context this may seem an endorsement of censorship, but it’s clear that he was referring to things like deliberate disinformation campaigns, conspiracy theories, and public health hazards.

Though Republicans had tried to downplay the idea that they were “working the refs” by saying that Facebook et al. shouldn’t be refs in the first place, Sen. Tom Udall (D-NM) explained that “when we say ‘work the refs,’ the U.S. government is the referee. The FCC, Congress, the Presidency, and the Supreme Court are the referees.” He warned of the danger of federal laws aimed at actions, such as restricting the reach of the NY Post’s highly suspect story, that were in his opinion the right thing to do, if difficult to get exactly right the first time.

Sen. Tester (D-MT), clearly out of patience with his colleagues across the aisle, deplored the double standard he believed he saw: “We’ve heard a lot of information out here today where when you hire someone you’re supposed to ask them their political affiliation. If that business is run by a liberal, we’re gonna regulate em different than if they’re run by a conservative outfit,” he said.

“That reminds me a lot of the Supreme Court, where you have two sets of rules, one for a Democrat president, one for a Republican. This is baloney, folks.” If he could have dropped the mic, no doubt he would have.

As for the CEOs themselves, they hardly had a chance to get a word in edgewise except in their opening statements. When they did speak it was mainly to acknowledge that they need to work on transparency, but that they were doing their best in unprecedented circumstances with policies that must be reworked on a daily basis.

Reserve your sympathy for these poor captains of industry, however, until those companies answer for their role in producing the problems of mass disinformation in the first place.

This isn’t the last we’ll hear of this issue by a long shot, but with the election looming, unbelievably, in less than a week, the next time a hearing like this is held it will be under altered circumstances.

New Zealand launch provider Rocket Lab has put its 15th commercial payload into space, delivering ten Earth observation satellites each to their own orbit. The company is getting back into its stride after an upset in July dampened plans to set a record for launch turnaround time.

Aboard the latest Electron launch vehicle to leave the Earth were nine of Planet’s “SuperDove” satellites, the newer generation of observation craft that allow that company to provide frequently updated imagery of an increasingly large proportion of the surface.

Canon’s CE-SAT-IIB is a demonstration craft, showing off “a middle-size telescope equipped with an ultra-high sensitivity camera to take night images of the Earth,” along with some smaller ones for more ordinary observation. The rideshare with Planet was organized by launch rideshare specialists Spaceflight.

The launch was originally scheduled for last week but stood down at the time because “some sensors are returning data that we want to look into further.” Fortunately there was no shortage of backup launch dates, and today was set for the new attempt.

Everything proceeded nominally and the satellites were on their way and able to be reached about an hour after takeoff.

This is the second launch since Rocket Lab was briefly grounded following the loss of a payload in July — not to any flashy explosion but to a rather graceful shutdown due to an electrical fault before it could reach the desired orbit.

Fortunately the company’s quick investigation meant they were ready to fly less than a month later.

Incidentally, all that and more will be on the table for discussion at TC Sessions: Space 2020 in December, where Rocket Lab founder and CEO Peter Beck will be joining us.

Apple might be building a Google competitor, Audible adds more podcasts and an ad measurement company raises $350 million. This is your Daily Crunch for October 28, 2020.

The big story: Apple seems pretty interested in search

Apple has a growing interest in search technology and might even be working on a product to compete with Google, according to The Financial Times.

The most visible change is the fact that in iOS 14, Apple is now showing its own results when you type queries in the home screen. In addition, there seems to be an increase in activity from Apple’s web crawler.

There may be more of an opportunity here as the U.S. Justice Department has sued Google over what it claims are anticompetitive behaviors around search. However, this doesn’t necessarily mean Apple and Google will soon be going head-to-head in search — it could just be a sign that Apple’s Siri voice assistant is getting more search queries.

The tech giants

Joe Rogan, Alex Jones and Spotify’s illusion of neutrality — Spotify is facing criticism after Joe Rogan brought Alex Jones of InfoWars onto his show.

Audible further expands into podcasts — Audible is adding approximately 100,000 podcasts.

Apple eyes the TikTok generation with an updated version of Clips — The update brings much-needed support for vertical videos, allowing for sharing to TikTok and the “Stories” feature in other social apps.

Startups, funding and venture capital

DoubleVerify, a specialist in brand safety, ad fraud and ad quality, raises $350M — DoubleVerify’s technology can detect fraud, viewability and brand safety.

Outrider raises $65M to bring its autonomous tech to distribution yards — The startup has built a three-part system that includes an autonomous electric yard truck, software to manage the operations and site infrastructure.

Lunchbox raises $20M to help restaurants build their own ordering experiences — CEO Nabeel Alamgir said that if restaurants can handle more online orders themselves (rather than just relying on delivery apps), they’ll make more money while also maintaining a direct relationship with their most loyal customers.

Advice and analysis from Extra Crunch

As venture capital rebounds, what’s going on with venture debt? — While venture capital is back setting new records, it appears that its lesser-known sibling won’t be able to match the past few years’ results.

Current and upcoming trends in Latin America’s mobile growth — Latin America is home to one of the fastest-growing mobile markets in the world.

Dear Sophie: Any upgrade options for E-2 visa holders interested in changing jobs? — Another edition of Sophie Alcorn’s column answering immigration questions about working at technology companies.

(Reminder: Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Qualtrics CEO Ryan Smith is buying majority stake in the Utah Jazz for $1.6B — Smith sold Qualtrics to SAP for $8 billion in 2018.

US online holiday sales to reach $189B this year, up 33% from 2019 — That’s according to a new forecast from Adobe Analytics.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Access to information in the United States is fragmenting along social lines. This goes beyond the fuzzy, qualitative feeling many of us have that people can’t agree on key issues anymore — data show that people are increasingly breaking into disconnected ideological camps. While this is commonly viewed as a left/right issue, the reality is much more pernicious: It is a rich/poor issue.

Americans today are exposed to fundamentally different facts based on their news sources. Data are often arranged to fit narratives rather than the other way around. This effect spans the political spectrum: It is as relevant to The New York Times as it is to Fox News. One of the contributors to this information split is the rise of site-wide paywalls, which divide access to information along socio-economic lines.

As one magazine editor eloquently puts it, “The truth is paywalled but the lies are free.”

It’s time for us to think critically about how we can build business models that reunite information bubbles, so that people consistently get access to all sides of the story.

Ringing the division bell

Media polarization is not a new phenomenon. Studies have shown for over a decade that, when it comes to news, people have been dividing themselves into information camps. Social media platforms — quickly replacing publishers as the “front end” of news — act as an accelerant, using likes and reads to pattern-match content to readers. However, these studies often address the left-right split; little is said about the more fundamental difference in beliefs driven by a difference in ability and willingness to pay for news.

The pivot by major publishers to erect site-wide paywalls is a recent phenomenon, an answer to the “grand ad-supported content bargain.” These paywalls have grown in popularity, driving people to subscriptions as an alternative to ads revenue. In doing so, they have undoubtedly helped stem (and maybe reverse?) the decline in news revenues driven by the internet.

How bad has this decline been? Just see this OECD visualization of how circulation, titles and revenues have dropped over time.

As Rupert Murdoch said, “… sometimes rivers dry up.” From 2007-2009 alone, the U.S. saw a 30% decline in newspaper publishing. Staff layoffs have become the norm for smaller and midmarket news services, which find themselves driven to consolidate into larger news orgs in order to bring down prices and expand the reach necessary to attract ad spend.

The message is clear: If people want to continue consuming news, they and media companies need to work together to develop a business model that can support it. Yet, as news bookmarking service favor.it notes, “There is now a real cost to the user associated with acquiring accurate, insightful and well-produced news. [ … ] Exacerbating the problem is the fact that there is now serious competition to real news. Free, less-reliable news sources and aggregators that can push articles into a [F]acebook Newstream that go viral in a matter of seconds whether they are completely true, or properly researched, or not.” The data bear this out: an MIT study across 126,000 stories found that fake stories proliferate on average 6x quicker than true ones.

The new iron curtains

Across six European countries and the United States, the average price for paywalled news is about $15.75 per month. In a time where half of Americans are working low-wage jobs and many are experiencing a severe savings crisis, most don’t have the available funds to shell out for a $15 monthly news subscription — much less a subscription for each outlet they want to access. Free news and clickbait headlines on social media, much like fast food, are the easiest and most freely available options to a swathe of people who have neither the resources nor the energy to do the fact-checking for themselves.

A perennial suggestion is that outlets syndicate their content into a “Netflix for news” bundle. Indeed, aggregator initiatives like Apple News have grown to over 100 million users. Yet this still doesn’t solve a fundamental problem, which is that, in an age of instantly available free online media, most people are not willing to pay even for bundled news.

As Don Richard, senior PM at Shopify, puts it, “I just don’t think the mass appeal for a text-content bundle is as high as many tech folks believe it is [ … ] most people view text content as a less-valuable medium than TV and music  —  valuable being defined as worth paying for based on your personal needs and preferences. And when people have other expenses they have to pay for, paying for a text-content bundle will be hard to justify. Since a text-content bundle doesn’t exist today, the money for a text-content bundle has to come from somewhere else in the monthly budget for most people. That means the bundle price has to take share-of-wallet over something else. Basic needs (food, shelter, utilities) aren’t being reduced for a text-content bundle.”

So we end up with two fundamentally different types of media: On the one hand, free media, supported by independent journalists, freelancers and threadbare content teams; on the other, paywalled media, supported by more robust fact-checking teams and editors. As Robinson puts it, “It costs time and money to access a lot of true and important information, while a lot of bullshit is completely free.”

Coming back to the accelerating polarization of the American public, this media divide is not without consequence. People can always reasonably disagree about beliefs and ideas, so long as they have the shared context of facts. They cannot have productive debates if the facts are in-question.

This is where claims of “fake news” originate: Dividing the world into free facts versus paywalled facts means we are increasingly talking past each other. As favor.it puts it, we’re “moving toward a situation where there will be haves and have-nots in the very critical area of having basic, accurate information about what is going on in the world.”

Where do we go from here?

It is clear that the internet media model predicated on paywalls needs to be revisited due to these shortcomings. But what are the alternatives? Targeted ads have been shown to have their own disadvantages and provoke reader ire.

While this is not a comprehensive answer, here are a few suggestions:

Free facts, upsold details. Pull the key facts out of news stories and make them freely available to people, upselling the deeper and richer storylines. TechCrunch has found an elegant middle-ground of this format: The core news stories on the website are free, while the value-added analysis, investigative deep-dives and richer opinion content are available to subscribers.

The New Paper is another, newer service experimenting with a condensed version of news headlines to combat newsletter and information fatigue (albeit one that still plans to charge $5 monthly). This is something being spearheaded by the rise of platforms like Substack today for independent journalists; content producers with a good following or smart coverage can create self-sustaining businesses.

Could newspapers take a page from Scandinavian ticketing practices and charge based on income? A tiered subscription price adjusted to payroll could allow wealthier readers to create a public good for poorer ones.

Yet, when people pay for news, they should not just be paying for stories — they should be paying for the knowledge that an army of editors, fact-checkers and investigative journalists uncovered the truth behind a story. That is a good that Substack likely cannot provide.

Develop a publicly available, consensus-driven score for fact-based news outlets and prioritize this score in algorithms. The way we access information has changed; aggregators now sit at the top of the news funnel. This has created a significant user surplus — people are able to locate information by story, without being constrained by outlet. However, it has also created an ad-revenue-driven model that prioritizes unique views, which are in turn driven by people’s search for sensationalism and confirmation bias in media. Search engines, social media platforms, and aggregators should come together to develop a public, transparent scoring mechanism for information quality in news and implement that to drive more viewers to more trustworthy sources. An independent rating for factuality that becomes a key input into search and social rankings could significantly help curb the virality of fake news stories, but it would need to take into account the sometimes long half-life of the truth.

Public initiatives. The government needs to re-enter the business of protecting the quality of journalism.

One step is for the FCC to reintroduce the Fairness Doctrine, which required journalists to represent both sides of a given story.

Another is to increase funding for public news sources of all stripes: liberal, conservative, etc., and for those sources to submit to routine information quality audits. Every area in which we’ve taken public institutions and allowed people to pay their way out of the default option — healthcare, education — has led to wild underinvestment in the public option; news is no different.

The library model is surprisingly effective for those who select it as an option: well-funded and maintained public libraries still provide an amazing, information-rich resource to those who avail of their services. Digitizing library resources and allocating partial budget to make information not just available, but also surfaced at the right contextual moment could combat misinformation.

A last option would be to implement information quality scores, similar to public health and safety standards. A score could be as simple as an A-F grade on a restaurant or a calorie count on a fast food menu.

Micropayments and stories a la carte. As long as news media has been dealing with internet-related pressure, technologists have proposed micropayments as the answer. The desire to read an individual news story is stochastic, while media subscriptions are continuous. Few people, myself included, have the willingness to submit to a monthly or annual news subscription just to access the content in one article. Publishers should offer individual stories, sold in exchange for micropayments of, for example, $0.10 per story (10x the payout of some publishers to their content creators). Digital wallets embedded into browsers (see Metamask and Brave Browser as examples) can support these micropayments fluidly, either with opt-ins for each story or working in the background, to allow readers to move seamlessly around the internet, so that readers aren’t asked to pay for each story. As futurist Jaron Lanier noted 10 years ago, “Digital technology … unsettled the so-called ‘creative class’ — journalists, musicians, photographers” when access to information became free; micropayments (and royalties) could help rebuild that class of jobs. With that said, there’s a discrepancy between the amount that periodicals spend to publish a story (e.g., $100) and people’s propensity to pay (e.g., $0.10); unlike songs and movies, people only consume news stories once.

Alternative revenue streams. Media companies should again explore whether events, classifieds, paid editorials, in-depth research and other information-related services could allow them to offer “just the facts” as a loss leader. The New York Times, famously, launched The Daily podcast and spun off its cooking and crossword products into standalones. Publications should reinvest in hyperlocal journalism with local sponsorship.

The truth is that, as site-wide paywalls continue to be erected, there will be a real divide of news into haves and have-nots. There is no silver bullet solution to this problem. The public benefits from open news; factual reporting creates positive externalities. Yet we have not found a commercial structure to support these organizations. The answer is probably a combination of the above along with other revenue streams (including, yes, ads). But it is paramount to the strength of our social fabric that we continue to search for that answer.

We should ask ourselves what surplus is created by good news coverage, by deep investigative research and honest reporting? Who benefits? At this critical juncture when the stress fractures in our fragile democracy are beginning to show, it is obvious that all of us benefit from that surplus as a society. So let’s work together to support it, for the sake of society.

Thank you to Danny Crichton, Danny Zuckerman, Jason Wardy and Orion de Nevers for reviewing this piece.