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Situational awareness: Coming this year: Season Two of "Axios on HBO."
Happening today: The largest annual gathering of local news publishers in the U.S. will be in Las Vegas. Facebook has sent its director of new initiatives Anne Kornblut there to walk them through Facebook's efforts around local news. Go deeper.
1 big thing: Japanese app quietly pushes traffic to millions
You may not have heard of SmartNews, but the Japanese news discovery app has quadrupled its U.S. audience over the past 2 years and now drives more traffic to publishers than Apple News, according to traffic news referral service Parse.ly.
Yes, but: SmartNews' audience is still tiny in the U.S. compared to that of other news aggregators and it's not considered a strong partner for strategic news distribution.
"It's very much just sugar rush traffic," says one audience development manager.
Details: SmartNews is a free news discovery app that was created in Japan in 2012 and launched in the U.S. in 2014. It's raised $88.3 million to date, and at the time of its last funding in 2016 was reportedly valued at around $500 million–$600 million. It has an audience of roughly 15 million users, mostly from Japan.
- But the company is aggressively pushing to expand its U.S. presence, in part because audience and ad revenue opportunities are great here. It's hired 25 people across 3 offices in San Francisco, Palo Alto and New York City, the head of U.S. marketing Fabien-Pierre Nicolas tells Axios.
- The company has also been buying cable news ads across Fox, MSNBC and CNN. Its goal is to attract older news consumers in the U.S. across all demographics and political ideologies.
Be smart: In Japan, SmartNews is a market leader and considered one of the top news discovery apps, with roughly 3,000 news publishing partners. But in the U.S., it so far has only signed on 350 publishing partners.
- According to Parse.ly, SmartNews didn't start to really distribute traffic to publishers until the summer of 2017. Last March, that growth accelerated even further, and has been trending upwards ever since. Traffic referrals to publishers have grown by 125% over the past year, per Parse.ly.
How it works: SmartNews is similar to Apple News in that it selects traffic distribution partners to work with and helps them set up channels that users can follow. But when it comes to most traffic referrals, the app relies on algorithms to elevate news from vetted publishers in its feed.
Between the lines: Axios spoke with several audience development professionals and while most agreed that the added traffic surges from SmartNews are helpful, many argued that they haven't yet become a very strategic audience development partner for a number of reasons.
- It doesn't have a great sense of editorial strategy. News coverage from outlets that didn't actually break the news is alerted.
- Traffic spikes are high, but not as sustained. "Traffic shoots up but quickly wanes after it's moved from the top position on the SmartNews feed," says one audience development manager.
- Bounce rates are very high. People visit the article after it's pushed to them, but don't engage further with a news brand after that.
- There's no pitch process. It only ranks news algorithmically after a publisher is added as a curated source.
My thought bubble: SmartNews is starting to send a lot of news traffic to U.S. publishers, but there's no real mechanism to build an audience yet. For now, it's an added bonus, but not a platform that a company can really invest in strategically.
Go deeper: Read the full piece here.
2. American journalists detained in Venezuela
Univision anchor and U.S. citizen Jorge Ramos and his crew were temporarily detained in Caracas by Venezuelan President Nicolas Maduro, before later being released.
Officials seized the journalists’ equipment and detained them because Maduro didn‘t like the questions Ramos was asking, a Univision spokesperson tells Axios.
The big picture: The action comes after a weekend of turmoil in Venezuela in which Maduro blocked international aid at the border, accusing the U.S. of orchestrating a coup as he continues to deny that the country is suffering from a humanitarian crisis.
Details: Ramos began by showing a video clip that he shot from the day before of Venezuelan kids eating out of the garbage and asked for Maduro's reaction, which is when Maduro got upset and ordered them to be detained.
- Authorities confiscated all of Ramos' interview material and equipment. Ramos called Daniel Coronell, president of news for Univision, for forty seconds before his phone and backpack were confiscated forcefully by authorities.
- He and his crew were held for about 2 hours 50 min in the presidential palace in Caracas. When they were finally allowed to leave, they had to leave all of their equipment, phones and material behind.
What's next: The journalists were released this morning. They stayed in a hotel overnight that was surrounded by Maduro's armed forces. Their equipment, cellphones and the interview material were not returned.
The bottom line: In an Instagram video posted from Ramos' Facebook Watch show "Real America with Jorge Ramos," he says he doesn't ever expect to get the footage back: "They don’t want world to see what we did."
3. New Bleacher Report CEO: Revenue 4-5x higher since 2012 exit
Bleacher Report, the millennial and Gen-Z focused digital sports franchise owned by Turner, has no plans to put its free app — which is accessed by millions of people — behind a paywall, the company's new CEO Howard Mittman tells Axios.
Why it matters: Mittman believes people will pay for live sporting events, but not necessarily sports journalism and analysis. For this reason, he doesn't expect to ever build a subscription model for the 20 million people who have downloaded the Bleacher Report app, which drives 50% of the company's traffic and revenue.
Yes, but: Bleacher Report does charge consumers for live games or access to its over-the-top live TV app, Bleacher Report Live.
By the numbers: Mittman says the company currently brings in 4 to 5 times the amount of revenue that it did when it was acquired by Turner in 2012, which was roughly $40 million at the time, according to reports.
- The app is currently driven by ads, which bring in between $80 million and $100 million for the company, according to estimates based on revenue ranges from Mittman. Users have to sign into the free app through an authentication service, like they would for a paid subscription. That helps the company collect better first-party data and in turn, sell ads for a higher premium.
- The app has 10 million people signed up to get push alerts, which Mittman believes will be a critical service once real-time betting becomes widespread.
Mittman takes over as CEO in place of Dave Finocchio, one of the company's four original founders, who announced his summer 2019 departure last week.
Read more from the full interview.
4. Best Picture winners make more money before nominations
Winning the Best Picture at the Oscars is a prestigious milestone, but it doesn't necessarily drive people to the theaters. Data from Comscore shows that most Best Picture winners make the majority of their revenue between the time of the nomination and the Academy Awards telecast — not after they win.
Why it matters: "There's this misconception that winning Best Picture makes you a ton of money, but most of the time it doesn't," says Comscore senior media analyst Paul Dergarabedian. "Winning is not about sheer dollars and cents. It's more about prestige and the movie's legacy that lives on."
The big picture: Most studios will expand the theater distribution of Oscar contenders either the weekend before or after nominations are announced to take advantage of the prestige that drives pre-show viewership. But most don't expect big bumps after the show.
This year's Best Picture winner "Green Book," for example, made 40% of its box office revenue after it was nominated for the highest award, says Dergarabedian. "It was kind of sleepy before that. Once nominated, it was reinvigorated as a mainstream, crowd-pleasing hit."
5. Media plays tech watchdog while regs stall
Investigative reporting from news outlets over the past 2 weeks has led to some swift changes from some of the biggest tech companies.
Why it matters: Despite an onslaught of hearings and statements from Washington, virtually no regulation has actually passed in the past couple of years to significantly address the potentially harmful practices of tech companies. Media reports have driven most of the changes to date, especially around privacy.
- Facebook says it’s working on an improved compliance and audit process for the third-party contractors that moderate content on its platform, following a brutal exposé Monday by The Verge's Casey Newton on workplace conditions at a facility in Phoenix, Arizona.
- Popular health and fitness apps have stopped sharing data with Facebook after a Wall Street Journal report last week detailed how many do so without users knowing.
- Facebook will shut down its controversial Onavo VPN app in the wake of backlash following TechCrunch’s investigation about Onavo code being used in a Facebook research app that sucked up data about teens.
Yes, but: Changes without the weight of law can be temporary, or promised but not delivered, Axios' Ina Fried points out. Remember that "clear history" feature Facebook promised? We're still waiting for it to arrive.
- Plus, these actions come as regulators begin meeting on Capitol Hill enter a series of hearings this week. But, as Axios' David McCabe notes, "The privacy debate in Congress has seen a lot of press attention and not much movement."
6. Skinny bundles may not salvage Pay-TV declines
The total number of pay-TV subscribers, or people who buy cable or satellite TV packages, dropped 4.1% year-over-year last quarter, according to research firm MoffettNathanson.
- Why it matters: Cord-cutting seems like an inevitable conclusion to the onslaught of streaming services entering the market today, but last quarter we saw a newer trend which was that Pay-TV losses weren’t offset by cord-cutters signing up for digital "skinny bundles," like Sling TV or YouTube TV.
- Yes, but: "Given all of the new OTT options available both free and streaming, it’s inevitable that cord cutting is going to start picking up," says Alan Wolk, co-founder and lead analyst at TV[R]EV. "But it’s also important to note that in a market with around 80% penetration, a loss of 1% of the customer base is still a trickle and not the tsunami that so many in the press make it out to be."
7. 1 fun thing: Digital ads expected to crush traditional
U.S. ad dollars spent this year on digital channels, including desktop, mobile, search and social media, will surpass the total spent on non-digital ad channels, like television, out-of-home (billboards), radio, newspapers and magazines, according to a new projection from eMarketer.
Why it matters: 2017 was the first year that digital ad spending passed the television ad spend in the U.S. Now, digital is growing so quickly that it's slated to surpass revenue from all of the old-school mediums that for decades dominated the entertainment landscape.
Of note: One company is expected to grow its ads business by 50% this year. Guess who.