{"id":13462,"date":"2015-06-25T10:56:06","date_gmt":"2015-06-25T15:56:06","guid":{"rendered":"https:\/\/beta.pewresearch.org\/pewresearch-org\/short-reads\/%year%\/%monthnum%\/%day%\/why-a-mobile-news-startup-couldnt-survive-in-a-mobile-news-world\/"},"modified":"2024-04-14T03:19:39","modified_gmt":"2024-04-14T08:19:39","slug":"why-a-mobile-news-startup-couldnt-survive-in-a-mobile-news-world","status":"publish","type":"short-read","link":"https:\/\/beta.pewresearch.org\/pewresearch-org\/short-reads\/2015\/06\/25\/why-a-mobile-news-startup-couldnt-survive-in-a-mobile-news-world\/","title":{"rendered":"Why a mobile news startup couldn\u2019t survive in a mobile news world"},"content":{"rendered":"

Circa is the latest casualty of a fragile digital news scene that is by no means immune to the risks facing startups in general. The mobile-native news app garnered a lot of attention when it launched in 2012 for its features that made it easier for people to follow a single news story over time. But it announced on Wednesday<\/a>\u00a0that it has been put on \u201cindefinite hiatus\u201d after running out of capital.<\/p>\n\n

\"Using<\/a><\/figure>\n\n

It\u2019s easy to see why the company made a big bet on mobile: A 2014 Pew Research Center survey<\/a> found that 68% of smartphone owners at least occasionally use their device to follow breaking news events. And our analysis of comScore<\/a> data from January 2015 found that 39 of the top 50 news websites had more traffic to their sites and associated applications coming from mobile devices than from desktop computers. It\u2019s also worth noting just how quickly<\/a> smartphones have flooded the market: In September of 2012, just before Circa launched, 45% of U.S. adults owned one. By the fall of 2014, that share was up to 64%.<\/p>\n\n

Despite the opportunity, Circa \u2013 a venture-funded news organization that did not cultivate an advertising or subscription base \u2013 was not able to garner the revenue to keep itself afloat.\u00a0While venture capital interest in media companies has attracted headlines<\/a> lately, their investments\u00a0in journalism\u00a0amount to\u00a0a small fraction<\/a>\u00a0of total funding for the U.S. news industry.<\/p>\n\n

\"\"<\/a><\/figure>\n\n

Advertising, on the other hand, accounts for about two-thirds of all news revenue, though little of that comes from digital advertising. In the mobile news economy, the clear winner is Facebook, which\u00a0took in\u00a0more than one-third<\/a> of all U.S.\u00a0mobile\u00a0display revenue in 2014, according to eMarketer data. Our\u00a0research shows<\/a> that a\u00a0sizable portion of Facebook\u2019s user base is using the site as a source for news.<\/p>\n\n

The challenge for any startup is to build enough of an audience to produce a substantial revenue stream, whether in the form of subscriptions, advertisers or events, before investors lose confidence. Social networks such as Facebook, as well as digital publishers like BuzzFeed or the The Huffington Post, succeeded, and have become fixtures of the U.S. news landscape. Many others have not.<\/p>\n\n

Circa was not only building a product seeking to reimagine news for a mobile era \u2013 it was investing in editorial staff, which requires substantial resources of any\u00a0newsroom.\u00a0Venture capital can provide runway for a startup to get off the ground, but\u00a0in the case of\u00a0Circa, this didn\u2019t last long enough for the company to develop a sustainable revenue stream.\u00a0It won\u2019t be the last experiment in digital journalism to meet such a fate.<\/p>","protected":false},"excerpt":{"rendered":"

Circa is the latest casualty of a fragile digital news scene that is by no means immune to the risks facing startups in 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