The past 12 months were pretty brutal for large swathes of the media and creative industries. We witnessed unpresidented (sic) attacks on the mainstream media from the Oval Office and White House surrogates; digital darlings like BuzzFeed and Mashable, missed targets, laid off staff or saw their businesses valued at a fraction of their previous levels. Meanwhile, the #MeToo campaign rightly garnered considerable attention, with its ramifications still being felt in early 2018.
So, what can we expect in the year ahead? Here are three key strategic areas that media execs must keep an eagle-eye on:
Show Me the Money: Making Media Pay
“Journalism needs new revenue models, particularly ones that align all our business incentives with our editorial ones,” Wired‘s editor-in-chief Nick Thompson wrote in a recent Facebook post.
His comments came at a time when both Wired and The Atlantic, publications which have predominantly eschewed these income models, have decided to pivot to paywalls. Previously these outlets have typically encouraged readers to “whitelist” their sites, bypassing audiences ad-blocking preferences.
The move by The Atlantic is particularly notable given that they’re one of the organizations enjoying a discernible “Trump bump” as younger readers “flock to old media.” It also comes, just a few months after introducing The Masthead, a new $100-a-year membership program which promises “founding” members exclusive content “at a moment rife with challenges for independent journalism.”
Meanwhile, The New York Times — fresh off the back of hitting record levels of subscribers — has decided to halve the number of articles it offers for free each month (from 10 to 5), as it seeks to further grow its subscriber base by putting more content behind the paywall. The move mirrors a similar approach in 2012, when the Times reduced the number of free articles non-subscribers could access from 20 to 10.
As of December 2017, the Gray Lady now has more than 3.5 million paid subscriptions and over 130 million monthly readers; more than double their audience from two years prior. Their efforts to become “a subscription-first business” were reiterated last year in their 2020 report, “Journalism That Stands Apart” which argued:
Breaking news: @nytimes now has more than 3.5 million paid subscriptions and more than 130 million monthly readers, more than double our audience just two years ago.
— Adam Goldman (@adamgoldmanNYT) December 7, 2017
Efforts to generate more paying consumers, and to double-down on opportunities to create additional income from loyalists, are understandable.
But they beg two key questions:
Firstly, is there enough money to go around? Will 2018 be the year when we hit peak-paywall? Afterall, general audiences have historically been pretty reticent to pay for content.
Secondly, if there is a finite pot of subscription monies to go around (and I believe there is), then local news outlets are the ones most likely to suffer. They don’t have the scale that national and international outlets can potentially tap into. That’s an outcome which if far from desirable, given the pressures the sector is already under.
To counter this, local newspapers (the medium most at risk) will need to aggressively make the case (to readers and advertisers alike) that supporting their outlet isn’t just about your own consumption needs, it’s also about supporting the type of society you want to live in. And that’s one where we should guard against the expansion of media deserts, and stress the need for strong original reporting from across all parts of the information ecosystem.
Primary Colors: When Politics and Policy Collide
If 2017 was the year of “fake news” and “alternative facts” then 2018 promises to be a year where the media landscape risks becoming even more partisan and polarised.
In the coming months, we won’t just see missteps and mistakes in the mainstream media being weaponized, we can also expect to see regulation, competition rules, as well as M&A activity, being increasingly viewed through a political lens.
As a case in point, consider the AT&T – Time Warner case, Sinclair’s proposed Local TV expansion, or that the FCC’s decision to overturn net neutrality was split down party lines. Against this backdrop, it will be interesting to see how the huge Disney-Fox plans play out.
Whatever your political persuasion, it’s hard not to detach the different approaches being deployed here from the current political climate. That may always have been the case, but in 2018, this promises to be more overt than ever.
The implications of these developments, of course, will resonate far beyond Washington and the boardrooms of Fortune 500 companies.
Changes in net neutrality rules may make it more difficult for local players and start-ups to afford new access fees; it will certainly be much harder for them to access the super-fast highway than content creators with deeper pockets.
Moreover, consumers may find themselves facing higher internet and phone bills, more politicized local news coverage, and the need to subscribe to yet another OTT service, as Disney launches its own on-demand products and removes its content from Netflix and other rivals; as it seeks to grow its own audience (and direct revenues) in this space. Despite the financial implications, it’s a move that becomes more appealing to mouseketeers the world over if/when Fox’s vast library is also folded into the mix.
I, Robot: Emerging Tech
Writing on these pages at the end of last year, Mark Glaser, Founder and Publisher of MediaShift, highlighted how we are already witnessing considerable interest – from publishers and platforms alike – in Audio and Voice as potential delivery platforms.
Even though it’s early days for products like Amazon Echo and Google Home, research from the Reuters Institute for Digital Journalism indicates some of the potential. CNN, the BBC,Wall Street Journal, and many others all experimenting with these technologies. Voice assistants have the potential to transform local search and content, with local newspapers joining NPR, the Washington Post, and a plethora of other publishers, who are exploring whether these platforms can deliver new audiences and fresh opportunities for monetization.
To these digital horizons, of course, we also need to add Augmented Reality (AR) and Artificial Intelligence (AI).
Speaking at the Global Editors Network conference (GEN Summit 2017) in Vienna, Austria, last summer, Amy Webb, founder of the Future Today Institute,felt that newsrooms and media companies – by focussing on virtual reality – had been “following the wrong fish.”
Reflecting on the energies being poured into these areas by some of Silicon Valley’s biggest companies, she argued that “the future of news involves object recognition and Augmented Reality. “But,” she said, ”there isn’t a single news organization that I know of on the planet that’s working on a visual object recognition strategy for revenue advertising or for content.”
Perhaps that will change in 2018, not least because I expect Facebook and Snapchat to get much more behind these tools/platforms, especially AR. Facebook has already made some noises about this; and just as they incentivised publishers and celebrities to help kick-start their live video offering, it’s not unreasonable to expect they may take a similar approach to another format that they’re particularly keen to grow.
Finally, with AI tools already being used for live reporting, work being done by agencies, and the automation of some content – such as the local news experiment, supported by Google Digital News initiative – this fast-moving technology remains one to watch.
The Dollars Trilogy: What this Means for You
How you categorize, these digital-led developments (the good, the bad and the ugly), will vary – depending on your particular standpoint. But, these new realities cannot be ignored. Each of these trends has the potential to impact your bottom-line. For good or ill.
As we enter the end of the current decade, the media landscape probably feels more like the wild west than it has for some time. The impact of the three topics outlined here, coupled with ongoing strategic considerations — such as ad-blocking, the consequences of changes to Facebook’s algorithm, and the continued reliance on many third party platforms and services — means that many media companies continue to face an uncertain, unpredictable, future.
Yet, at the same time, this uncharted territory also offers tantalizing prospects for content innovation and potential opportunities for new revenue streams.
The world is full of digital cowboys, but with 2018 promising more paywalls, evolving policy and the growth of emerging tech platforms, media companies may need a few more gunslingers. Change is in the offing, and as a result, execs will need to carefully marshal their resources, and once again saddle up for another year where change and opportunity will go together hand-in-hand.