As media companies look to their portfolio of brands to build or maintain their role as content destinations, it’s important to evaluate the production and consumption cycles of their news and entertainment content. To better understand these cycles and their business implications, the World Economic Forum (WEF) surveyed more than 9,100 consumers in China, Germany, India, South Korea, the United Kingdom and the United States. WEF also conducted six workshops with approximately 100 executives across the media industry to supplement their findings. Their new report, Understanding Value in Media: Perspectives from Consumers and Industry, offers key insights for the digital media marketplace.
Destinations versus ecosystems
WEF makes an important distinction between content players. There are content destinations, those companies where their content is the end point for consumers, such as a TV series or a news article. In contrast, content ecosystems are media companies, such as Amazon and Apple where the content is used as a tool to generate incremental revenue from their existing users. Another distinction is that destination media companies compete to become leaders in their respective areas, whereas ecosystem players are there to capture time, spend and data.
Content engagement is strong
Consumers are engaged with news and entertainment media as daily touchpoints. Eight in 10 consumers listen, read or watch news while nine in 10 watch entertainment content within a 24-hour time period. Further, close to 60% of consumers qualify as fully engaged, defined here as those who completed some form of registrations, either free or paid. In terms of future prospect, 53% report a willingness to pay for news in the future, up from 16% who pay today and 70% are willing to pay for entertainment content, up from 44%.
Young consumers, ages 16 to 34, are the most likely to pay for content. An average of 61% currently pay for entertainment content and 17% for news.
Paid news and entertainment services, now a complement to advertising sales revenue, may serve as the future alternative to ad sales. Currently, more than two-thirds of news publications (69%) in Europe and the US operate some form of metered access.
Consumers report a global willingness to pay for content with 35% agreeing that they should be responsible for paying for and funding access to news and 44% agreeing for entertainment. They also expect governments to play a role in funding news compared to entertainment (35% versus 18% respectively). The findings suggest that consumers recognize the importance of news publishers to ensure a healthy political discourse. Further, close to a quarter of consumers think that tech platforms should also be responsible for supporting and paying for content.
Key strategies for publishers
In moving forward, publishers need to strategic and thoughtful in their approaches to the media business. WEF identified three key strategies:
Identify economies of scale
Publishers must focus on growing subscriptions by expanding audiences. Seemingly already in progress, publishers continue to identify new products to market to current subscribers as well as news prospects. This strategy extends to technology and telecoms offering products across media verticals (e.g. Verizon and ATT).
Make the consumer the primary customer
This approach looks to match consumers’ interests with marketing that speaks directly to them. Usually this is a combination of unique content and personalization. WEF’s research shows evidence that consumers are willing to pay more for personalized media and tailored content and it also helps with churn rate.
Focus on identity
The “identity economy” refers to expenditures on products and services to form self‑expressions for consumers. Major advertisers are building closer alignment with identities and values in order to create a relationship with consumers. Some brands execute by sharing a brand values or partnering with a cause (companies giving proceeds to charity, etc.).
As the digital marketplace continues to grow, it’s important to pay close attention to how ecosystem companies integrate media into their activities. Publishers need to continue to think about the supply and demand of their content. It’s time to rethink the process of content creation, monetization and discovery especially in a media ecosystem and in an on-demand environment.