Traditional journalism is suffering from a lack of reader trust. Regardless of political affiliation, 41% of Americans don’t trust their news sources. As an example, Fox News is trusted by 43% of Americans but not trusted by 40% — making it both the most-trusted and least-trusted major news source in the US. In another survey, 62% of people said that it’s difficult to stay well-informed with all of the news sources and different opinions expressed in it. Similarly, more than 65% of people said they felt worn out by the amount of news available.

One company that claims to have the solution to this problem is Frame. Through its mobile interface, the company changes the way that news is reported and consumed. Instead of providing news clips, long shows, and written content of a varied nature, Frame creates and distributes short, 10-to-15 minute documentaries. What happens is that the company identifies a story or an angle of a story it believes is valuable to its users. It then provides a deep-dive into that, providing users with a narrative nonfiction presentation that is plot-driven and tells the ‘human story’ at the heart of it all.

To further build on this experience, Frame’s stories include interactive content — such as maps that illustrate where certain events transpired and when. The stories can also be told in short clips that collectively comprise the whole topic at hand. All of these stories are delivered through SMS (text messaging). If a user is interested in a particular story, they have the ability to subscribe to it. Whenever updates are made available, they are notified. In a new twist on the news, Frame also will allow its users to message and receive responses from the journalists who report its stories. This is an enticing concept, but the question of scaling it up will be interesting. A news story that has 1,000 or 5,000 — or even more — comments/questions flooding in will be a challenge to manage. Add in multiple stories per journalist and the need to continue producing new content — this could be something that bogs down the company’s operations.

In order to monetize the platform, Frame intends to launch paid membership plans. These should be coming out in the first quarter of its 2021 fiscal year. Pricing for monthly plans has not been offered (assuming they will be), but for an annual plan the company intends to charge about $50. Another interesting source of activity for the firm are branded partnerships. Frame landed one of these with an unnamed ‘major US nonprofit’. Their goal is to land three more by mid-2021.

Frame’s platform has launched on a beta-testing basis so far, and it has been able to generate some revenue. However, the total amount is negligible in the grand scheme of things. From June 4th of 2019 through September 30th of the same year, the company’s revenue was just $261. Over the same timeframe it lost $81,966. Operating cash outflows during these months totaled $63,426. From June 4th of last year through March 31st of 2020, meanwhile, the company’s total revenue came out to $4,115. Its net loss ballooned to $168,583, while its net cash outflow was $169,776.

The market that Frame operates in is challenging. This is because it’s flooded with so much free content. The thought of paying for content in an age when Google can deliver most anything to you for free may seem absurd to some. However, what data does exist suggests that paying for news is the way of the future. In one study that covered 80,000 people across 40 countries, attitudes varied by nation. In the US, 20% of people admitted to paying for news in the past year — up from 16% a year earlier. These results echo another study of individuals across six countries (including the US and China). In it, researchers found that 53% of people expressed a willingness to pay for news in the future. That’s up from the 16% that currently pay for it now.

At the head of Frame is Ben Moe, the company’s founder and CEO. His only work experience listed is as a Segment Producer at Mic, a digital news company. Before that, he graduated with a B.A. in Anthropology from Columbia. Another key person at the business is Tom Barnes. Barnes is currently employed as Frame’s Chief Product Officer and Acting Editor. At present, he is also a freelance developer. In the past, he worked as a Senior Staff Writer and Editor at Mic. His education involves degrees from NYU in English and Psychology.

Based on our assessment of Frame and its prospects, the KingsCrowd investment team has given it a Neutral rating. On the plus side, the business is an interesting concept with some traction. Management has done well to develop the platform and test it. The industry it operates in is sizable, still growing at a decent clip, and consumer trends are turning in the company’s favor. Additionally, Frame’s $5 million valuation is quite reasonable for its development stage. These are all net positives for the company and potential investors. On the negative side, though, Frame is still very early in its lifecycle. Losses look significant, and they will only worsen as the business expands. Perhaps most importantly, it’s uncertain how attractive the company’s value proposition will be. This is especially true when you consider the many news alternatives already in existence. Add to this management’s inexperience and there’s a lot of uncertainty here that makes it hard to be more bullish than neutral at this point.