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InContext / An inside look at the business of digital content

Quick reflexes and hard news: The media industry’s new reality

March 26, 2020 | By Chris M. Sutcliffe – Independent Media Reporter @chrismsutcliffe

The onset of the coronavirus pandemic has galvanized the media industry into action. Even as audience numbers have “skyrocketed,” the advertising revenue that sustains much of the media ecosystem has taken a sharp hit. And this, even as a new batch of advertisers seek to reach a newly minted niche of stay-at-homers, big spenders in retail and luxury markets are suspending buying activity. According to chief executive of G/O Media Jim Spanfeller, the situation feels similar to that following 9/11.

For some publications that are dependent on local advertising – those in local and regional media and freesheets/ alt weeklies – the situation is acute. There have already been some high-profile newspaper closures. Some publishers are already making cuts, and taking drastic measures to keep costs down, while continuing to pump out the news people need.  

Fiscal responsibility

Even some incredibly well-known media brands are being forced to reappraise models that have seemed sustainable in the past, with the Evening Standard freesheet in London cutting its circulation to manage costs as advertisers pull out. Its chief executive Mike Soutar noted that “in the context of currently lower advertising volumes, it makes good economic sense.”

Unfortunately, overzealous, often blunt, keyword blocking, and avoidance have long been an issue around news content, particularly as automation and advertising exchanges delivering “blind programmatic” have taken off. Of late, the situation has only grown more dire. In response, many have called for brands, agencies, ad verification firms, and other companies in the digital advertising supply chain not to block the news.

However, for every publication like Playboy – which is cancelling all print issues for 2020 – there are other media companies launching endeavors in the light of what seems likely to be “the new normal.” Given the uncertainty about whether the advertisers that have decamped will return, coronavirus has effectively pressed fast-forward on trends that have been ongoing for years, forcing publications to adapt quickly rather than relying on a slow tail of dwindling print advertising, news avoidance, and limited growth in subscription revenue.

Rapid digitalization

Jokes about Zoom being responsible for the outbreak aside, the pandemic has demonstrated the extent to which media businesses with events-based portfolios are exposed to mass shutdowns. Even with government support, some events-oriented media businesses are looking at furloughing employees, making redundancies, or shuttering entirely.

It’s been gratifying, then, to watch the speed which publishers large and small have transitioned to digital-only events. UK-based news start-up Tortoise, for instance, used its ‘ThinkIn’s (intimate events for members) as one of its key selling points in the first few months of its existence. Within a week of the (inadequate) UK government advice, it had transitioned to hosting Digital ThinkIns instead.

By doing so it is continuing to provide for its core audience, delivering on what its cofounder Katie Vanneck-Smith has described as a club-like mentality model of membership: “I think people will pay for what they value, and really brilliant businesses and brands have always built their businesses based on consumer insight, understanding what customers want, and then super-serving it.

“But I think, particularly in my industry, if you’re a newspaper – we’ve always had an arms-length relationship with the consumer, and that physical manifestation of the relationship we had actually became in many ways a cultural manifestation. And I think we lost that relationship. We forgot that ultimately we’re there at the service of our reader.”

Meanwhile, UK magazine The Big Issue is primarily there at the service of the seller. The magazine’s content is excellent. However, it is better known for the revenue-share model it operates with its street vendors, in order to lift them out of poverty. Noting that it – and therefore the vendors – will be hit hardest by a lack of footfall in cities, it has prioritized its digital subscriptions. While it is yet unclear about how the revenue share will work in the meantime, it has brought attention to the existence of the digital subscription offer at a time when readers are becoming habituated to paying in that way.

In the states, Gannett, which publishes about 100 local papers and 1,000 local weeklies, is trying its hand at supporting the local businesses that, in turn, are the lifeblood of its advertising. The media company launched a new website, Support Local, which encourages users to support local businesses in their community by buying gift cards for use at a later time.

Subscription trials

There is a separate debate to be had about whether news publishers should make their coronavirus coverage free to access. Many already have. What is undeniable, however, is that a raft of media companies have loosened or dropped their paywalls for the foreseeable future.

While many are motivated by a mandate to keep the public informed during this pandemic, some are doing so because event cancellations mean that they effectively have no product to sell. As sporting events are postponed or outright deleted from schedules, broadcasters with tentpole sports channels have transitioned to retention strategies. In the US, for instance, both the NFL and the NBA have offered free access to their sporting archives in lieu of new content. What this means for The Athletic, which has recently been on a hiring spree, is less clear.

Some brands have spotted the opportunity of opening the vaults to fitness apps and services. Popsugar bumped up the launch of its fitness service Active. While there are still plans to monetize it further down the line, for now the service will remain free in order to act as a lightning rod for audiences seeking at-home fitness classes. Digiday’s Kayleigh Barber reports that Active’s general manager Angelica Marden said: “We’re happy to introduce the people to this platform in this weird time and hope that they will come back to us.”

By doing so, the hope of many is that a newly captive audience will develop a habit. Whether that’s because of appreciation for a service when they needed it, or because they got a taste of the quality that exists behind the paywall, it doesn’t really matter. Once something approaching normality has resumed, the hope is that those habits linger.

Step up

For newspapers the ambition is greater still. Trust in a title is the measure by which audiences choose which outlets to subscribe to. In an age where perhaps only ten international English-language news brands can sustain themselves through subscriptions, this is a golden opportunity for papers to demonstrate their worth.

Even brands that haven’t historically been known for their hard-hitting coverage are stepping up. LadBible, the youth-oriented social publisher best known for its “lads lads lads” school of content curation, was praised by the World Health Organisation for its ‘Cutting Through’ COVID-19 campaign.

For subscription-focused publications, the coronavirus has acted as a Trump Bump or Brexit Bounce in fast-forward (COVID Crunch?), pushing audiences to well-known brands in order to find out the facts about the spread of the pandemic. Bloomberg and The Atlantic have seen spikes in subscriptions. Given that they are among the titles that have dropped the paywall for coronavirus coverage it suggests that audiences are either altruistically supporting titles they believe are fighting the good fight, or that vital news coverage has a halo effect on subscriptions.

The inevitable tide

That said, some of these moves were not entirely unforeseen. Playboy, for instance, was already several steps down the path to repositioning as a “luxury bookazine,” while membership-based journalism projects like Tortoise were already looking to build digital audiences through online events.

Membership schemes were already on the rise. However, coronavirus is providing publishers with a clarion call to which supporters can rally. Even the sports broadcasters were already looking at their stock of past broadcasts in an effort to set themselves apart from competitors.

While there have been a few entirely novel projects – like a mooted magazine about self-isolation – publishers are still playing catch-up with the pandemic, particularly as they scramble to set up remote working and reel from the health impact on their own staff. There will undoubtedly be new business and journalistic opportunities launched over the coming months as the new reality becomes apparent. For now, however the dreadful treadmill of survival is setting an unforgiving pace, and an industry that was already perilously close to the edge is now forced to sprint to keep up.

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