Sometime in mid 2011, Nick D’Aloisio became the youngest person ever to raise venture capital (!), when his news summarizing startup Trimit attracted the attention of Horizons Ventures, Hong Kong billionaire Li Ka-shing’s investment vehicle.
Rebranded as Summly, and having attracted $1.5m through more celebrity investors such as Stephen Fry, Yoko Ono, Ashton Kucher, not to mention tech stars such as Brian Chesky of Airbnb, Marc Pincus of Zynga, Spencer Hyman of Last.fm, the startup relaunched as an iOS app in Oct’12, and has already clocked 500,000 downloads.
News summarizing is presently the hottest investment wave in the news startup phase. And as it gathers steam, I wouldn’t be surprised if there are a few more entrants into this space in the next few months.
Interestingly, the previous wave (’10 – early ’11) was in the news reader space where Flipboard, Pulse, Feedly, Flud, Zite etc were all duking it out. There aren’t any clear winners though – Flipboard and Pulse are clearly ahead of others with 20mn+ users but Feedly is hanging in there as well. Flud has pivoted to an enterprise model, and Zite has been acquired by CNN but it continues to be in the consumer space.
Comparing the News Summarizing Apps
Circa is promoted by Ben Huh (CEO of Cheezburger Network) and has raised $750k in seed funding from investors such as former Digg CEO Jay Adelson, eonCapital, Quotidian Ventures, Tumblr’s David Karp, Eric Norlin’s SK Ventures, Soraya Darabi etc
Of the three, in Circa the summarizing is done by humans, while both Summly and Wavii leave this to their algorithms. Of course, this also means that they are weaker on the scalability front – presently they have only about 3 sections (US, Politics – which is again US-Centric, and World) – while Summly and Wavii have content across all topics.
For a news-junkie and someone who is a heavy print reader, Circa will clearly appeal – it is better curated than the others, and the layout and design of individual news stories are superior to Summly and Wavii. It also has a ‘follow the story’ feature, where it allows you to access updates on a story of interest, as opposed to looking for the story / updates when you revisit the app, as you are forced to do with Summly, Wavii.
Still, of the three, I found Summly the most relevant to me from an Indian perspective – it draws from most of the large media outlets in India, which Circa or Wavii don’t (yet). I also liked the feature where you can access the original story should you be keen to read the story in detail. Circa doesn’t seem to offer this feature.
For some reason, Wavii didn’t appeal to me instinctively. In the coming days I will go back and examine why. Perhaps it is the recency effect. I discovered Wavii last, and have had more time playing around with Summly and Circa. Perhaps I need to give the site that makes facebook out of google some more time before reaching a definitive conclusion.
The Future of News Summarizing Apps
In the long term, I wonder how many of these companies will exist in their present form? While summarizing does have value – The Week, (The UK / US one and not the one published in India) one of the fastest growing magazines in recent times, and amongst the few bright spots in the print business today is an example of consumer’s willingness to pay for distilled content – the presence of multiple players all offering a free app will likely mean that they will have to focus on advertising or selling data about consumers’ interactions with content to survive.
I am not too gung ho on advertising taking off on for news summarizing apps. Take Flipboard, which aggregates content but presents it without modifying content unlike Summly and Circa, though it modifies the structure to better fit tablet / mobile formats. I haven’t seen any positive stories on its ad revenue growth. On the other hand we have seen it struggle to hold on to its publishing partners. So if Flipboard has not been able to overcome its advertising challenge, I am not too confident of Summly, Circa, Wavii overcoming it.
So how will the sites survive? What is the exit plan for investors?
1) At some point, the sites might get readers to pay – either through a freemium model where certain services like Search are paid-for, or by charging for a section of content, and thereby covering the shortfall
2) They could get acquired – either by a Flipboard / Pulse or even an OS. Summly’s founder Nick D’Aloisio is frank about this. He thinks it makes sense for “…Summly’s home to be built into a pre-existing operating system, or another new service or search engine.”
3) I also think there could be interest from a facebook / yahoo which could buy one of these sites for the expertise that they have in the mobile design – UI space. Yahoo’s acquihire of Stamped comes to mind. So does Facebook’s acquistion of Instagram or even Google’s acquisition of Sparrow. Both Stamped and Instagram started with the phone in mind, and hence the product was designed keeping the constraints in mind. Unlike a facebook or a linkedin which was created for a larger screen size and has not adapted entirely well to the smaller screen.
Meanwhile, on the B2B Front
Paralleling the News Aggregation investing wave on the B2C front, we have the the Syndication wave on the B2B side. Media guru Ken Doctor calls this Syndication 3.0 in this fascinating article distinguishing from two earlier waves.
What Flipboard is to the B2C space, NewsCred is to the B2B space. A success story with some Bangladeshi roots (!), NewsCred recently acquired the NYT-funded DayLife, whose expertise in building online publishing tools such as image galleries, polls, charts should complement its content strengths considerably.
Two other sites that Ken Doctor mentions in his article are NewsLook, a video syndication site, and Upworthy which does what BuzzFeed does – highlighting content – videos and charts, that can go viral or is, but focusing on content that is also enlightening, and not merely entertaining.
The Next Wave
I would like to stick my neck out and say that the next wave is likely to be in the news video space.
Presently there is only one video-only site, NowThisNews, a videonews site from HuffPo co-founder Ken Lerer and ex-CEO Eric Hippeau, who are remaking news videos for a world where increasingly mobile is becoming the dominant device for news consumption. Upworthy does have videos but it is not necessarily all newsy and it is not only videos.
What are newspaper companies doing?
Given the need to drive audiences and revenues into their home brands, it is unlikely that newspaper companies would explore aggregation / news reader opportunities (I must cite one exception to this generalization and that is NYT’s news.me app which is now being wound down in favour of Digg, and incidentally for which the NYT got an equity stake in bit.ly). This is only natural. However to their credit, they or at least the top tier brands have been open to partnerships such as the NYT – Flipboard one or the recent News Corp – Summly one.
Additionally, the top tier companies have all set up R&D teams (all labeled labs as in NYT Labs, FT Labs, WaPo Labs etc) focusing on development of tools and technologies that can present their content better, be it WaPo’s social reader, FT’s columnflow or NYT’s Times Skimmer. I encourage you to take a look at them, especially NYT’s beta620 site. (I must confess I am not clear why NYT Labs and beta620 are kept distinct given that they both focus on emerging technologies in the digital space). Do see this for a deeper look at the interesting tools coming out of beta620.
In a coming post, I shall dwell a bit deeper on a parallel track of news startups, those focused on tools and technologies for newsmedia companies – such as Ryan Singel’s Contextly, Hearst’s Idilia etc – where we will take a deeper look at the R&D initiatives of newspaper companies.