newscred-new-logo-oNewsCred launched in 2008 with a contrarian business model in digital media that its founder Shafqat Islam admits was “naive”—a plan to spotlight premium journalism. Since then, the plan has matured.
Having created powerful curation technology for its partners, NewCred has licensing agreements with hundreds of blue-chip sources, ranging from The New York Times to Getty Images, The Economist, and the Mayo Clinic. With a killer’s row of partners, NewsCred is quickly becoming a force in creating custom content in brand marketing for some of the biggest players in the world. Among its diverse clients are Orange Telecom, Pepsi, BBDO, and General Electric. Savvy major brands realize it’s smart, if not essential, to be publishers now. And NewCred has created a business to serve those brands by custom building topic-specific digital publications drawing from top quality news organizations from all over the world. “Through social media, Facebook, Twitter, whatever, brands have all these followers, built all this engagement and they want to build on it,” says Islam. “We offer them a way to do it that’s cost-efficient and effective.”
If a Best Buy came to NewsCred, for example, NewsCred could put together a custom publication for distribution to the chain’s customers, culling articles from its content partners who would then be paid a royalty. “It might have the look of the Best Buy site,” says Islam. “But the readers would see the byline of the piece and the publication it was from.”
This is not the NewsCred model Islam and his partners, all three engineers, originally pitched to investors. What they first conceived was not a business-to-business play. It was an idealistic consumer-facing news platform that culled the best content from blue-chip news organizations. Lifting a page from Digg and Reddit, it would let readers rate, tag, comment, and vote on the quality and credibility of the news. But even with several millions in venture capital, their businesses model didn’t work.
NewsCred was entering a crowded arena where long-established brands like the Associated Press and Reuters had a firm beachhead. “A lot of startups have tried, but few have figured out how to make money on quality,” says Islam, noting The Huffington Post as a prominent exception among a sea of costly failures in the space.
It was time to pivot, based on the realization that NewsCred was technology that could fill a void in the marketplace as professional news organizations looked for profitable ways to distribute content. “I was looking closely at the A.P.’s business model and everybody licenses that same content,” says Islam. “We had this massive opportunity to upend a fairly large ecosystem.”
NewsCred had developed sophisticated technology that could help publishers extract more value from content quickly. According to Islam, “pure naiveté” led NewsCred to go after a who’s who of news organizations, offering them its technology in exchange for content that it could syndicate to third parties. “We were going to these organizations and I’m sure the initial reaction was ‘who are these friggin’ guys?’” says Islam. “But we had developed a truly efficient curation tool. We didn’t have money to pay them. But we had tools to extract value from their content that would be quite expensive for them to do on their own.”
The first marquee brands to sign on were Bloomberg, The Economist, and Forbes. Others have followed suit, including The Guardian, The New York Times, CNN, and Getty Images. “We said, ‘We’re not a competitor, we are a technology company,’” says Islam. “We said, ‘you give us your content for this exchange we are building and we will give it back to you with intelligence built into it, so if you want to build news businesses on top of it, please be our guests.’ We knew we were asking a lot. We wanted their most cherished asset: their journalism.”
Some publishers resisted at first handing over their content to the NewsCred syndicate, but still became clients. For example, wanting to publish a regular supplement for the burgeoning Indian population, The New York Daily News asked NewsCred to cull from its 2,500 news sources around the world, resulting in royalties for all those outfits. Fees paid out to some member news organizations have climbed into six figures and could exceed $1 million a year, according to Islam.
As a real business model began to take shape, NewsCred took another crucial pivot. With awareness that in the digital age every major brand was a network—essentially a media company—NewsCred saw an exploding market that was not being served. As many major brands build audiences in social media, they want to build on that engagement to further connect with customers. “Sixteen months ago all our clients were publishers,” says Islam. “Now 65% are brands.” Among them: Pepsi, Orange Telecom, and Zurich Insurance.
Whether the curation is done for brands or publishers, NewsCred’s relationship with its content partners demands transparency. Wherever the work appears, it is clearly labeled by author and content partner. Islam admits that a big part of his job is convincing his content partners that their most precious resource will be handled with transparency and care. It also must provide revenue to those partners. Privately-held NewsCred will generate “double digit millions” in revenue, according to Islam. “Ultimately, our success will be if we’re driving money into the journalism ecosystem,” says Islam. “We’re trying to help leverage the amazing body of work produced by journalists around the world every day.”
You can follow J. Max Robins on Twitter @jmaxrobins.