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Startup Newstag Launches Crowd-Curated Video News Service
"The business of news is broken," says Newstag CEO, but the company claims to have the answer in its approach to news sharing through social media.

On the day that the BBC slashed its newsgathering resources by more than 400 personnel in a restructure intended to put more emphasis on digital, Swedish start-up Newstag brought to market a concept it believes can solve the “broken economic model” of news dissemination and consumption.

Its novel revenue-sharing scheme could help professional news teams, brands, NGOs, and regular users make money from news content.

"The great paradox is that there never been as much content available as today but there is no financial model to support the editorial work of journalists," says Newstag CEO Henrik Eklund. "But if people are spending a billion hours on Facebook a month, we have to tap that and let the crowd curate content to feed value back into the system. You have to let people themselves set the value, otherwise the news industry will not be able to pay for quality journalism."

The company has just announced $1.3 million seed funding from a Swiss bank, private investors, and its own management, plus a further $150k Swedish Innovation grant.

Here is what Newtag, which launches commercially in September, proposes. In essence it aggregates video feeds from professional news suppliers, who also automatically populate its database, and serves them up to mobile users for free. Users can tag the news topics or genres they are interested in and create a personalised newscast viewable on smartphones or on TVs via Roku, Chromecast or Apple TV devices. Sharing of personalised newscasts to social networks is key.

AP, Reuters, AFP, and Sweden's Tidningarnas Telegrambyrå (TT) are among the agencies that have signed on, but Newstag goes further and includes news feeds created and distributed by brands and NGOs (such as the World Wildlife fund and Red Cross).

So far, so what? Here's where it gets interesting. Content could be sponsored so that occasional users would see pre-roll or sponsored feeds. Regular users could opt to select just the brands they want to receive ads from. User data could also be sold by CPM and per category (sports, for example).

Newstag iPhoneThe revenue is divided among the content owner, Newstag, and its user-members. Members will be awarded credits per activity, such as tagging news with self-selected NGO and brand sponsors, and sharing it. Up to a certain level, and for tax purposes, according to Eklund, these "points" translate into money that can only be allocated to NGO causes or research projects of the user's choice. Beyond a certain threshold, say 10,000 followers of a person's newsfeed, the users themselves can begin to collect financial reward—acting, in effect, as micro-publishers.

Eklund is not divulging which brands have boarded but gives clues. They are of necessity global (news knows no frontiers after all) and include a sports brand, a bakery, a car rental agency, and a famous Swedish interior design firm.

"What we offer is a totally new way for content owners to make money," says Eklund. "The self-selection of ads is a way for brands to properly target people who actually find your message relevant, so brands win hearts and minds."

Eklund feels this service will gain traction among users because many are fed up with being force-fed news agendas and instead want to discover and judge news content for themselves.

"Viewing news from different angles and sources provides a more global picture of news events," he says. For example, the news agenda of the Syrian crisis in the West is dominated by a rebels "good"/government "evil" narrative, but this can be rebalanced if news reports from Russian news agencies are given equal weight.

"People want to judge the value of news on their own terms," he says. He argues that the younger generation in particular are tired of the filters and agendas applied by traditional news organisations like the BBC, ITV, CNN, or Fox News. Short bulletins do not provide the depth of news content that some people require, and the economic model for 24-hour news channels is a failed one that organisations are struggling to divest themselves of.

Even as more and people are turning to Google and Facebook to provide them with news, there are issues there, too. Google, Facebook, Twitter Reddit, Yahoo, and others are all busy curating the vast amount of content online for users to digest. Newstag wants to be the only one that doesn't somehow manipulate that feed by algorithm, emotional graph (as in Facebook's case), or editorial lead (as in Yahoo's case). It says its video news feeds will be self-curated and self-shared.

He backs this up by suggesting that news is more likely to be accepted from sources that people trust. A study performed by researchers from UCLA and HP found that the original publisher of an article was the fundamental factor in predicting the spread of content online.

There is something particularly Scandinavian about the ethical corporate responsibility that the service seeks to instil. The idea is that crowdsourced promotion will both be a boon to brands that associate themselves with good causes but in the same way pressure might be applied to brands who are seen, for example, to avoid tax or manufacturer their products using child labour.

"Corporate social responsibility is important to brands," says Eklund. "They can get closer engagement to customers who endorse them but they need to keep aware of CSR or they will lose that value. It's all interlinked."

That said, if there's a danger for brands in being associated with the wrong type of news (Pampers adjacent to stories about the UK paedophile investigation, perhaps) then the brand can counter this ahead of time by blocking such tags out.

Similarly, where there is a clash of interest in a particular region where, as in Sweden, it works with agency (TT) and a broadcaster (TV4) to whom the agency also supplies content, then geoblocking can be enforced.

"It's taken 25,000 hours of hard work to handle video the way we want," claims Eklund. It has a patent pending on its ability to move vast amount of data around in real time, a proprietary search engine, and a cloud-based streaming platform. When traffic volumes become too large, it proposes to hook up with a CDN.

Newstag launched a beta version (under another name) last December with 4-5 people, rapidly amassing 5000-6000 users a day, it claims.

"We learned a lot about how people consume news and how they like to tag and also that they like to share news," says Eklund.

It has plans to incorporate user-generated news content, which may also be validated by the crowd.

Eklund previously founded Kamera, a Swedish online and mobile TV content aggregator acquired by KIT Digital for $11m in 2008. "I was working with content owners and realised the news model was falling apart," he says. "The only solution was to cut costs and cut costs again. It was not sustainable."

This view was backed up by the two years he spent subsequently as director of digital partnerships and distribution in EMEA and Asia at Associated Press. He says he learnt at first hand how new media players like YouTube could hurt the whole newsgathering industry.

"The news business is broken," he says. "The problem is not the lack of content but that there is too much of it. Nor is there any lack of professional produced content. The problem is that traditional news broadcasters do not have the resources to curate, plan and editorially present that content."

Newstag has a staff of 20, with satellite offices in Sofia, Cairo. and Singapore (the latter two were also one-time headquarters of Kamera). The company chairman and founder, Camilla Dahlin-Andersson, has been a member of the Swedish parliament and is currently finishing a doctorate in Innovation Management at Stockholm School of Economics and Mälardalen University.