The topline: Intensifying pressure on ad revenue requires media companies to deepen audience relationships and leverage emerging tools and strategies to diversify revenue.

The past year has been a difficult one for many media companies. After the rapid bounce back from early Covid-era travails, more than 20,000 jobs were lost in the US media sector alone in 2023, with few publishers emerging unscathed. 

At a local level, news deserts continued to grow, while digital darlings like BuzzFeed News shuttered and Vice Media filed for bankruptcy. Meanwhile, august publications like Bloomberg Businessweek and The Nation announced plans to reduce the frequency of their physical products, and the venerable National Geographic laid off the last of its staff writers.  

At the same time, concerns increasingly arose about compensation and copyright infringements from Generative AI platforms, as well as the impact of tools like ChatGPT on media traffic and search habits. 

Furthermore, dramatic drops in referral traffic witnessed by many leading publishers from major search engines and social networks added a further set of challenges for content creators to deal with. 

2024’s major media trends

So, how do media companies respond to these many challenges and put their best foot forward in the year ahead? Here are three essential recommendations:

1. Revenue diversification is more important by the day

Media companies have known for some time that they need to diversify their revenues. This need is only going to become more acute in the year ahead. Although global advertising spending is expected to exceed $1 trillion for the first time in 2024, this growth is not being felt by most media companies. 

Fresh analysis from WARC finds that spending on content media (TV, publishing, audio and cinema) has remained largely stagnant over the past decade. While advertising markets have boomed in that time, media players have seen their share of total advertising revenues decline from 71.0% a decade to 27.2% in 2024.

With these new monies flowing to the likes of Alibaba, Alphabet, Amazon, ByteDance and Meta, publishers and broadcasters “are fishing in a finite pool.” They’re essentially competing against one another for existing revenues, rather than attracting new ones, argues Alex Brownsell, Head of Content at WARC Media. 

Put another way, “every media owner – from NBCUniversal and The New York Times, to Snap and JCDecaux, to Disney and Spotify – is competing for share of a largely fixed market,” Brownsell concludes.

Against this backdrop, the need to reduce advertising dependency and diversify income sources becomes more apparent than ever. 

Within this, expect to see a greater emphasis on bundling as a means to drive loyalty and grow revenues. Blending different editorial propositions and purposes (e.g. news and non-news content) can be key, as The New York Times has shown. An ability, depending on your subscription type, to share access to your NYT bundle with friends and family can further deepen perceptions of value and reduce churn. 

“So far most of these bundles have been intra-company collaborations,” observes Nic Newman in his latest annual trends report for the Reuters Institute. “But in 2024 we can expect to see some publishers partnering with other providers to add extra value to their bundle,” he predicts.

Globally, media players are also placing a greater emphasis on the value of hosting events as part of a revenue diversification strategy. Respondents to a survey by WAN-IFRA found that almost a fifth (18.8%) of publisher income comes from sources beyond advertising and subscriptions. This reinforces earlier findings shared by twipe, pointing to areas such as premium audio content, events and e-commerce as some of the most promising areas for income growth.

2. AI remains in the spotlight

The impact of Generative AI dominated every media conference I attended last year. That’s not surprising given how rapidly this technology is developing.

Lest we forget, its posterchild ChatGPT only launched in November 2022. It had 140 million users a month at the time. By its first birthday, it boasted 100 million a week , demonstrating how quickly it had been adopted, including by more than 92% of Fortune 500 companies. 

Despite this general enthusiasm, “the response from publishers [to Generative AI] has been a mix of defense and offense,” observes Kevin Anderson at Pugpig. On the one hand, publishers are embracing this technology and exploring its possibilities in areas such as automation, personalization and the creation of new products. 

In Norway, for example, Aftenposten, the country’s biggest daily newspaper (part of the Schibsted group), has used AI-generated audio articles to deepen engagement and engage younger audiences. Within six months of launch, the audience for these AI-generated audio stories was akin to that of their podcasts, demonstrating the potential efficiency of this tool once it has been set up.

At the same time, they are also looking to limit the ability of AI platforms to be trained by scraping their content for free. “What media companies are saying is AI won’t be built without us,” contends Vincent Berthier at Reporters Without Borders.

This tension is perhaps most publicly prominent at The New York Times. Just before Christmas, the company launched a lawsuit against Open AI and Microsoft for copyright infringement, highlighting how “millions of articles from The New York Times were used to train chatbots that now compete with it.” The move came hot off the heels of the Gray Lady appointing Zach Seward as their first Editorial Director of A.I. Initiatives. It’s a role that encompasses training, experimentation and prototyping, as well as identifying when the company should, and should not, use Generative AI. 

The coming year will likely only see this type of dichotomy grow even more pronounced. 

We can expect to see greater moves towards AI regulation, more lawsuits issued by publishers as they seek to protect their material. We will also see more partnerships, like those inked between OpenAI and major publishers including Axel Springer and the Associated Press. Meanwhile, insights from a new survey conducted by the Reuters Institute point to a focus on using this technology for “under the hood” services such as transcription and copyediting. 

Whatever your approach, having a strategy for using and deploying AI remains key, not least because of the potential reputational harm when this is poorly executed.

3. Audience development grows in importance

A third area of focus for many media companies in the year ahead will be audience development. 

Alongside continued exertions to reach and engage with new audiences, businesses will be increasingly absorbed in efforts to deepen relationships with existing consumers. This will involve creating opportunities for interaction, dialogue and feedback, as well as moves to understand, and better serve, audience needs and preferences. 

It’s an area where AI can help, argues Dmitry Shishkin, the incoming CEO at Ringier Media. For Shishkin, data and suggestions generated by AI should be used as an “editorial co-pilot” that will inform content strategies and efforts to ensure “necessary distinctiveness.”

“Media success now thrives on differentiation and specialization,” he told Journalism.co.uk. That means an emphasis on “quality and focus,” he said, as newsrooms seek to “establish a compelling reason for repeated engagement.”

To help generate this engagement, outlets may look at fresh ways to develop more personal and direct relationships with audiences. 

Tools like Subtext enable media organizations and creators to text their audience as you would a friend.  New York Times Opinion columnist Farhad Manjoo holds Office Hours where he chats with readers on the phone. Tortoise Media in the UK holds open editorial meetings. Other outlets are experimenting with mechanisms like WhatsApp Channels and Discord to reach audiences in new places. 

All of this is a counterpoint to what Kevin Anderson notes was the “volume-over-value strategies” that many publishers pursued for too long. Media markets have changed, Anderson argues, remarking that reaching large audiences through search and social and then serving them with ads is seldom a model that’s fit for purpose. “It’s all about relationships,” he writes. 

In doing this, as we’ve argued before, publishers should be learning more from the Creator Economy. That’s a sector steeped in nurturing and leveraging relationships to drive revenues and loyalty. 

Demonstrating that there is no one-size-fits-all solution, Francesco Zaffarano writes in Nieman Lab about the success of “platform-based news brands.” These outlets do have large audiences on platforms like Instagram, TikTok and YouTube. They harness this to generate revenues through paid partnerships with brands and donations using similar tactics as those in the Creator Economy. 

Zaffarano cites outlets such as Impact in the USA, The News Movement in the UK, Hugo Décrypte in France and Ac2ality in Spain, as examples of this phenomenon. Arguably, their success hinges on aligning their work’s tone and relevance with their target audience, coupled with a presence in online spaces where their audience already spends a lot of time. 

In those instances, this takes the form of mainstream social networks. But, for other audiences and media outlets, the answer could lie closer to home, or in smaller (even niche) online communities. Media players will need to continually analyze audience needs and habits to find the solutions that are right for them.

A strategic path forward for digital media

In the fast-evolving media landscape, 2024 promises to be yet another year of rapid transformation and adaptation. The year ahead looks set to be defined by the need for media companies to focus on diversifying revenue streams, navigating the complex realm of AI, and prioritizing audience development. 

Revenue diversification remains a paramount priority for media companies, especially as their slice of global advertising revenues stagnates. In that climate, retention and fresh sources of income continue to be critical.

Secondly, the role and impact of Artificial Intelligence cannot be underestimated. Media players will continue to experiment with the potential benefits that this technology can unlock. Yet, they’ll do this while also seeking to protect their assets from being cannibalized by it. Navigating this tightrope will not be easy, but it’s one that organizations large and small will have to tread. 

Lastly, as media companies strive to deepen relationships with existing consumers at the same time as expanding their reach, audience development has to take center stage. Fostering meaningful relationships will see the use of different tactics and platforms. Nevertheless, the end goals are the same: to demonstrate value and distinctiveness, and in turn drive retention and loyalty. 

As media companies prioritize these areas, they need to be mindful of being strategic in these efforts. The pace of change can be daunting, but it also presents considerable opportunities. Leveraging new AI tools, diversifying revenue streams, cultivating stronger connections and delivering distinctive content are all areas that can enable media companies to do more than just survive 2024. Executed correctly, it should also enable them to thrive for some time in the years ahead.