The Business of News Apps

Key Takeaways:

• As users, we want news apps that have content tailored to me, the right volume for me, and from the perspective that’s right for me
• The market for news is dominated by a few aggregators (like Apple News), social media (like Reddit & Twitter), and publisher specific apps (Fox News, New York Times)
• There is significant room for innovation for apps that either serve specific groups or personalize better to serve the diverse range of needs user groups have

As we all tend to get news from everywhere — including social media, TV, our friends, and family — sometimes the market for news appears oversaturated. While this is invariably true, I will walk through the user needs from a product angle, some cool products solving them out in the market today, and what other areas of innovation we may come to see in the future. I think there is both a role for news apps and more innovation to come.

User Personas and Needs

There are many different groups of users personas we could focus on for news apps. After working through different groupings, I have conceptualized four key personas and their sub-types. The first group is customized topics; they have their areas of special interest, and they like to see news on that. Then, there are those who are interested in curated topics. They are open to a variety of topics and appreciate when the right one’s are curated for them. Third, there are people are specifically interested in local news. Finally, there are people who are interested in quality long-form: often distinct from the short-form, carbohydrate news that characterizes most of the press.

Within each of these, there are diverse sub-groups. As they say, “differences within groups are larger than differences between groups.” For instance, within quality long-form, some users are technophiles. They specifically like in-depth technology news. Others are just quality oriented: these scientists types do not want the pop science or sugary cereal of news. They are looking for the meaty entrees. Others have been converted by the high quality long-form that exists in substacks and newsletters. Finally, a fourth sub-group is yearning for old times. They are used to reading half page columns in the New York Times and other reputable media.

Across these different personas, as product people in news, we can conceptualize several key user needs. The first is a need for “content tailored to me.” Perhaps that means topic-specific, alternatively that may mean curated for your reading level. Another need is, “the right volume for me.” Some only have time for a few stories that are short. Others want one to two stories that are long. Still others love reading and want many long articles. Another key element is “from the perspective that’s right for me.” Some people want to live in their echo chamber — eg, the woke left who doesn’t want to see anything from the middle-left, let alone middle or right. On the other hand, others want a diversity of opinions from all points of view. So we can conceptualize user needs across these three key vectors (goal here is to be similar to Amazon’s selection, price, delivery time style needs):

1. Content tailored to me
2. The right volume for me
3. From the perspective that’s right for me

Market

With these user needs in mind, we can begin to evaluate what is out there in the market. Based on the data, these are the top apps in the news category.

Source: Category charts; figure my own

Aggregators

News Break ($151M venture funding)

Newsbreak has 28M monthly active users (MAUs) spending 9 minutes a day in the app, mainly in the United States. The app is clearly designed with the local user persona in mind. The app has a strong focus on local news upon open, there is a consistent local news section highlighted atop the ‘For You’ section, the ‘Local’ tab is the second most to the left after ‘For You,’ and a local ‘Bulletin’ tab is the third most to the left. (Local items in blue on pic.)

Generally, featured stories are there because they are clicked and engaged with. They are often negative and/or sensational. (Red items in pic.) The app also has an element of curation with tab titles for events as they happen. At the time of research, the ‘NFL Draft’ tab was prominently featured, as it was ongoing. In addition, it has elements of a social network with comments and likes (green in pic).

SmartNews ($180M venture funding)

SmartNews has 31M monthly active users spending 17 minutes a day in the app. The app’s biggest geography is actually Japan, followed by the United States. Based on the design of the local news tab to the left as well as the top tab focusing on local news, this is also an app that appears to have found at least some niche in local news (blue items in pic).

In a podcast, the app’s VP of Marketing mentioned that one of its key marketing channels as low CPM TV ads on MSNBC, CNN, and Fox News. Accordingly, the app also has quite a political focus. To that end, the app has a slider so you can choose where on the political spectrum you want your news from. The CEO has spoken about the mission of the company being to break the filter bubble. To that end, it appears the machine learning algorithm adapts to your political preference, to address the perspective that’s right for me need, but slowly exposes diverse perspectives slightly adjacent to one’s beliefs. (Purple items in pic.)

Just about everything on the app is available for free. However, the app is filled with ads. You’ll encounter full screen pop ups that force reading to finding the dismiss button, which appears in different places depending on the ad. There are also inline ‘native’ banner ads throughout. There is no paid version to get rid of these ads. (Red item in pic.)

The app is also trying to do many other things than strictly news. It has a section for weather, coronavirus, and deals. (Green items in pic.) It also known for it’s ‘Smart’ read feature which downloads articles for subway and other commuters who do not always have signal.

Opera News (OPRA: $1.36B market cap)

Opera has roughly 8M MAUs, with users spending 7 minutes a day in the app. Its top 5 markets are India, the US, Indonesia, Egypt, and South Africa. The app monetizes through ads that appear most often as a bottom banner when you click on an article. It also has social features like comments and likes (Green items in pic.)

Like News Break and SmartNews, it certainly seems to start assuming you may have a tendency towards local news. It seems designed for the local news persona first. I got the typical news I got in both other apps — another shooting in Durham. This news does not even qualify as local since it is in parts of Durham county far away from me. (Blue items in pic.)

There was also a heavy focus, at least at first in the default starting For You tab, towards the type of news that is made for engagement, not quality. For instance, I saw “Mum Gives Birth to Second Biggest Baby Girl In the UK Weighing 12lb 14oz” from Lad Bible with a picture of a chubby baby. Then I saw at least three articles on crazy, horrible negative stories: “Woman Sees Crying Man at Gas Station, Then She Notices His Wife and Goes Straight to Her Trunk,” “Terrified 11-Year-Old Gives Teacher A Secret Note From Mom, Teacher Immediately Calls Police,” and “Raleigh man charged with murdering 4-year-old girl admitted to hitting her in the stomach, attorney says.” (Red items in pic.)

Apple News ($2.21T market cap)

We learned from Tim Cook that Apple News had 125 million monthly active users as of last April. That’s roughly a 19% penetration for iPhones, impressive but demonstrative of the potential for other players as well.

The app espouses a design philosophy putting the curated topics user first. The app has a fairly standard list of articles that appear the same to just about everyone at any given time. This results in a high quality bar. (Green items in pic.) However, many articles are also behind a paywall. At any time, 30–60% of the articles are only available to Apple News subscribers. (Red items in pic.) It also often links to sources like The Wall Street Journal and The New York Times which have a monthly limit of free articles, after which you must verify your subscription.

Unlike most of the apps, Apple News distinguishes itself with a clear focus on audio. A variety of stories are audio, plus there is a specifically a bottom tab section for audio. (Purple items in pic.)

Google News ($1.59T market cap)

Google News has 142M monthly active users spending 11 minutes a day in the app. Of the aggregators, the Google News app at first glance might appear aligned with the Customized Topics persona. (Purple items in pic.) However, after investigating several users’ views of the news, I found that it is actually mainly curated topics, with a global focus. Almost everyone I found had the same headlines at the same time. (Blue items in pic.) The app also curates special interest topics; currently, Covid-19. (Green item in pic.)

The app might be powered by a machine learning algorithm, in keeping up with the Google ethos, or has a curation team that is okay including the sensational, “click-bait.” My second story was about a bear death, which we know are highly rare. (Red item in pic.)

Social Media

Reddit ($919M venture funding)

Reddit has 104M MAUs who spend 20 mins/day in the app. Being primarily a social media/ Internet Forum 3.0, it is the best place for niche communities and news. At the same time, then, however, it includes tons of jokes, memes, and other “less-educational” content. (Green items in pic.) These items are all prioritized based on engagement, as is everything else in the app. (Red items in pic.) Reddit is squarely within the customized topics persona.

But the team at Reddit clearly wants to focus on News. The News tab is actually the leftmost top tab. The news tends to be global in focus. Because it is engagement based, there also tends to be more engagement click-bait. (Blue items in pic.) But it also can be a place to see integrated news, like sports. (Purple item in pic.)

Twitter (TWTR: $44.1B market cap)

Twitter is by far the biggest and most engaged app on this list, with 488M MAUs spending 22 mins/day in the app. Depending on how you follow, you can make it totally your own. Predictably for me, my feed shows finance and gaming topics. (Blue items in pic.) Because it is a social media site, it is engagement driven. But where it really distinguishes itself (as we have seen in global uprisings like the arab spring, Belarus protests, etc) is the trending in real-time. (Red items in pic.) Twitter is squarely within the customized topics persona.

Twitter also seems to have some news in the background. In the second bottom tab, and the fourth top right tab, one can navigate to global news. This tends to be national/global in nature. (Purple items in pic.)

Monetization

Most of the apps — aggregators and social media — monetize with ads. Apple News has one of the most interesting subscriptions, Apple News +. Although Apple News does not monetize with “ads,” it does have plenty of ads for its Apple News + service. It would be interesting to see if other apps in this space adopt alternative monetization through an ad-free experience. I certainly know I would pay Twitter to remove the ads, and I also have subscribed to Apple News+ in the past.

Comparisons & Context

Putting this all in context, news only represents about 14% of American’s daily media diets. When Americans do consume news, it is still overwhelmingly from Television. But as trends shift towards mobile, and consumers around the world cut the cord, it is likely that these social media and news apps will grow to dominate more of the discussion.

When it comes to time per day, users spend the most time in Twitter, followed by Reddit, and then Smart News (although I could not find an estimate for Apple News). When it comes to MAUs, Twitter is the largest, followed by Google News, Apple News, and then Reddit. Within the news apps niche players, SmartNews is in the lead, behind News Break and then Opera News.

Further Opportunities for Innovation

I think there is significant room for innovation in this space and expect to see new startups rise, or I expect one of these existing apps to significantly innovate. I expect there to probably be some apps that design particularly well for specific personas or customize based on the persona you are.

Imagine an Apple News, with links to quality topics, but that was all free, had tons of long-form, and personalized for you. Some sort of mash-up that takes the best from all these apps is sure to burst onto the scene.

As we have seen here, no app is perfect, but the user needs are there.

Will you create it?