A News App Dies, and the News Biz Stays the Same as Ever

Circa folded because it failed to solve the longstanding problem of making money off the news in new ways.

Silicon Valley has altered much of our lives. It has changed the way we communicate, shop, and travel. But when it comes to the news---at least the business of news---the old ways have been hard to shake.

One-time media and investor darling Circa News announced this morning that its app is now on "indefinite hiatus." The startup, which had promised to deliver breaking news and updates in a faster, more streamlined, more mobile-friendly way than anyone had before, ran out of money to continue operating.

"Producing high-quality news can be a costly endeavor and without the capital necessary to support further production we are unable to continue," Circa’s CEO and cofounder Matt Galligan wrote in a public farewell post on Medium.

Matt: news organization to news organization, let's just say we get it.

The news is hard, expensive, not especially profitable work. It doesn't scale cheaply. It's hard to automate. In finding this out, Circa seems to have come up against the very same problems traditional media organizations have been wrestling with since the rise of the web---and haven't really solved as reader habits and technology continue to change faster than business models can keep up. The problems haven’t changed all that much, and no one seems all that intent on truly solving them. They're all too busy trying to attract an audience, sell ads, and just get the news out---just like always.

News Blues

When it launched in 2011, Circa sold itself to investors as something different. It was mobile-based. It valued short bursts of information in a card-like format, rather than long swaths of text better suited to paper. It had push notifications. It could aggregate stories from other sources quickly---getting breaking news out faster than anyone else. But that didn't prove to be enough.

Four years ago, all of that was somewhat original. But today mobile news apps that aggregate information, send push notifications, and value succinct updates are commonplace. Since Circa started, The New York Times launched NYT Now, BuzzFeed released BuzzFeed News, Al Jazeera started AJ+, and the Wall Street Journal is reportedly set to release a new app called What’s News. Add the hundreds of mobile newsreaders and other standalone news apps, and you have a very crowded field competing for the same audiences and ad dollars.

Despite the influx of new media upstarts, like say BuzzFeed or Vox Media, ultimately, the ways of making money as a publisher---or monetizing your eyeballs, as we like to say---have stayed pretty much the same, which venture-backed Circa acknowledges.

“We could have compromised and included off-the-shelf advertisements or charged a subscription for the product,” Galligan wrote in his post, “but we never felt like any of the simplest solutions would pair well with the high-quality experience we wished to achieve, or even bring in enough to make a difference.”

No New Money

No major media organization has been able to find a real solution to the problem of monetizing news online in a new way. As Galligan notes, ads and subscription models are ultimately still the standard---as they have been since publishers first started to sell news. So when Circa's venture funding fizzled, so did its app. At WIRED, for example, we depend on magazine subscriptions and ads. Even new upstarts function similarly---BuzzFeed sells native ads and The Information charges a hefty subscription fee. Despite new revenue streams, like events or sponsorships, ads and subscriptions remain key for most publishers.

So startups out there listening---if you want to fizzle, like Circa, or have a slim chance of being acquired, like Wavii, Summly, and Pulse, do more or less the same. But if you can solve the real problems that have faced news organizations since news first made its way online, you may have a chance of making it on your own. Do what no one else can do: find new ways to profit off the news. Otherwise, you're in it with the rest of us.