Category results for "Revenue"

Paywalls and events are among the many strategies publishers are taking to diversify revenue

March 26, 2019 Rande Price, Research VP – DCN

Innovation is the key driver of sustainability and financial viability. This is why successful publishers are developing and testing new products, offerings and revenue models. A new report, 50 Ways to Make Media Pay, by Professor Damian Radcliffe of Oregon University in partnership What’s New in Publishing, offers an overview of 50 different revenue opportunities. It’s a collection of strategies—from paywalls to advertising tools, events, and commerce. Some are new ideas while others are not. It’s the collection and the variety of the revenue diversification options and the links to publishers executing these strategies that make this report so valuable.

Professor Radcliffe highlights the pivot to paywalls and a focus on reader revenue as a new norm. The New York Times, The Washington Post, The Financial Times, The Wall Street Journal, The New Yorker, and Bloomberg are some of those offering subscription products. Following its move to put Wired behind a metered paywall, Conde Nast has announced plans to follow suit with its other magazine brands.

One thing that paywalls offer (in addition to recurring revenue) is the opportunity and flexibility of real time learning.

Paywall Types

Publishers are experimenting with a number of different types of paywalls:

Hard paywalls will not allow consumers access to content without a subscription. Both The Financial Times and The Wall Street Journal use hard paywalls.

Metered paywalls allow users to read a set number of free articles before the user must pay the publisher (subscribe). Reducing the amount of content that audiences’ accesses for free is one way to try and drive consumers into paying for the content.

Hybrid paywalls offer some free content to users while other sections are secure behind a hard or metered paywall.

Vertical-only paywalls allow subscribers to pay for a standalone access to a vertical like sports, entertainment or food section.

Geo-location paywalls use IP addresses to identify users’ locations. Different locations may have different paywall limitations. A local audience may have more access and free articles than a user outside the local (target) area. This type of audience identification is often attractive to advertisers targeting a local audience.

Print and digital bundling began as a method to build digital subscribers. Originally, it offered loyal print subscribers, especially newspaper, a discount for digital access. Now, the tables are turned. In order to get the print product in front of more eyeballs, many offer free (or heavily discounted) print access to digital subscribers.

Online surveys offer a trade-off of user information for free content. There’s a consumer willingly to answer questions about themselves for free access. User information is a valuable commodity, especially to advertisers.

There’s also the pay-as-you-go strategy of micropayments. This approach enables readers to consume content one article at a time. Blendle, a journalism startup in the Netherlands, partners with many leading Dutch publishers to offer a micropayment plan.

Memberships offer new opportunities for publishers. It’s particularly relevant to a mission driven publication. Memberships offer the newsroom a chance to build a closer relationship with its members (readers). Memberships often offer access to bonus content and special events. Slate Plus is successful using this membership model.

Events

In addition,events are a solid revenue source for publishers. They can also act as a great marketing tool to attract new audiences and subscribers. Events allow for live interactions between the publisher and its audiences. A number of publishers are quite good at hosting an invite only industry offering with high level networking opportunities. (Think of Digiday’s Recode and FT’s Ignition.)

Live events and recordings include big ticket interviews of industry or popular icons (e.g. Hillary and Bill Clinton and Michelle Obama). Popular radio show events offer consumers the chance to watch a taping of the show in a live studio setting. Two radio shows, This American Life and Radiolab, completed successful live tours across the U.S.

Happy hours and socials are great vehicles to attract and build an engaged reader community. At these events, attendees have an opportunity to talk to journalists about a relevant and/or current topic. Events can be lucrative for small publishers too. Billy Penn, a Philadelphia based digital news outlet, reports that events constituted 80% of its revenue.

Publishers need to evaluate the brand relevance and potential of each revenue strategy. What works for one publisher, may not work for another. Experimentation is key to learning the best approaches for publishers to monetizing their content and first party relationship with their audiences.

Spring is in the air for advertisers and premium publishers. But we need to cultivate the opportunity for revenue growth.

March 25, 2019 Michael Tuminello, VP of Publisher Products—IAS

Maybe this is true everywhere. But in the northeast, we’ve reached the time of the year when nearly everyone has had just about enough of winter and is eager for warmer days. And, with OTT buds starting to bloom and brand safety and other concerns driving brands to invest with trusted partners, premium digital publishers may also be wondering if their long cold winter of online advertising could see signs of warming.

A recent report from MediaRadar, indicated that programmatic ad spend from a number of advertisers shrunk year-over-year from 2017 to 2018. While some brands may have become more reluctant to spend money in programmatic, directing funds out of the programmatic ecosystem is typically a temporary measure. Advertisers are building their internal expertise and seeking ways to get the benefits of programmatic (such as automation and the ability to leverage their increasing store of customer data) without the downside of low or unknown media quality. Emarketer has predicted increasing momentum towards private marketplace or programmatic direct deals through 2020. This reflects advertiser expectations that trusted publisher partnerships will best meet the demand for quality inventory.

Market Pressure

In addition to the growing sophistication of buyers, other trends in the marketplace are also conspiring to shift advertiser spend to premium publishers. Increasing consumer interest in privacy and data governance, kicked off by initiatives like GDPR and the California Consumer Privacy Act, will make it harder for lesser-known inventory providers to use targeting and consumer data to win brand dollars.

The rise of OTT gives premium publishers a unique carrot for digital ad buyers. This makes it difficult for lesser-known publishers to access inventory at scale across this new channel, unless there are significant changes to the ecosystem that empower smaller players. Given that publishers see the nascent OTT market as the first major bulkhead in winning the dollars currently devoted to linear TV, it’s unlikely that we’ll see the market open up to anywhere near the degree we have seen with mobile or desktop advertising. The winning platforms – companies like Apple, Amazon, and Roku – and the winning publishers – the major broadcasters and other household names for video content – are likely to keep the market under tight rein.

Value Matters & Values Matter

However, the wild card in this whole equation is the degree to which advertisers can feel confident that they are getting what they pay for. This applies not only to audience reach, but also a quality playback experience, meaning a viewable, brand-safe, and non-fraudulent impression. Without transparency on inventory quality, advertisers will continue to seesaw between investing in digital and pulling back spend to put it into other channels, as we have seen over the course of the last few years.

Transparency lays the foundation for trust between buyer and seller, and it is difficult for buyers and sellers to work together to establish this trust if they are relying on numbers from two different sources. All too often, publishers measure using one set of numbers while advertisers are using another. This inevitably results in discrepancies. It is difficult for publishers and advertisers to work together to support a transparent marketplace when they are measuring using two different methodologies. Standardizing on a single set of numbers on the buy and sell-side could also reduce the number of calls to supporting vendors’ ad code. It also makes it easier for buyers and sellers to work together to streamline the technology, reducing latency and other issues.

Standards and Issues

The good news is that the industry has never been in a better position to solve the problem of transparent cross-screen measurement. We as an industry have for the first time introduced measurement-specific ad standards. Most notably, these include the Open Measurement initiative, including the Open Measurement SDK, and Open Measurement for web. Prior measurement efforts piggybacked on technical standards like VPAID and MRAID, which were introduced to support rich media, not to provide accurate reporting on inventory quality. Having a standard designed expressly to support measurement that works across all devices is a great development.

We need to move the industry towards a single technical standard for measurement. We must get publishers and advertisers on board to utilize a common methodology to measure inventory quality. And we need to tackle measurement issues head on when they arise. This proactive approach is surely preferable to finger pointing and fighting over makegoods.

Now we are at the point where it’s either springtime or more cold lean years for publishers whose content deserves better. We can let dozens of competing proprietary approaches fragment the nascent digital TV ad industry. Or we can agree not to let that happen and work together to align the buy-side, sell-side, and the standards used for measurement. The outcome of that decision could mean the difference between five years to a fully digital ecosystem – or 15.

About the Author

Michael Tuminello is VP of Publisher Products at Integral Ad Science. He works to ensure premium publishers inventory achieves its full value potential. He plays an active role in helping to develop and improve industry standards. Michael is a two-time winner of the IAB Service Excellence award (2015 and 2019), as well as the MMA Smarties award for individual contribution to the mobile advertising industry. He was previously a Product Leader at Innovid, Sizmek, and Unicast.

Podcasts are booming. So, what are the revenue models?

March 14, 2019 Bryson Masse – Independent Journalist

If someone asked you five years ago which type of digital media would be seeing its renewed heyday, the podcast might not have been on the top of your list. But indeed, the format – still firmly connected to its broadcast radio roots – is in the midst of a renaissance.

Achieving new heights of popularity means that publishers of the audio-only medium have started to experiment with new business strategies to find a path to monetization.

We’ve seen some innovative approaches in the podcast sector like digital ad insertion, or having ad slots be dynamically filled by more up -o-date or geolocated content. But analyzing the recent business moves gives us an idea of what’s coming next in podcasting revenue.

Will Revenue Follow Audience?

In early February, Spotify purchased podcast publisher Gimlet Media for a cool $230 million. In a conversation with Recode’s Peter Kafka, Gimlet co-founder and president Matt Lieber explained that Spotify wasn’t just its second largest partner but also its fastest growing partner. He went on to say the reasons why the acquisition made sense was a “disconnect between the number of people who are listening and the amount of shows they’re listening to, and the amount of money coming into podcasting.”

With the size and scope of Spotify, Gimlet saw opportunity to overcome one of the fundamental challenges of podcasting: discovery. The competitive landscape means that to have your podcast’s needle found in the metaphorical hay stack, you either need to be lucky or know how to appeal to the right audience.

Lieber told Recode that the data found at the Swedish streaming platform (and its 96 million subscribers) would help with that process. The lack of relevant listener and audience data has held back the podcast industry in the past. Platform controllers like Apple weren’t releasing detailed enough listening data. This made it it difficult to fine tune advertising budgets and understanding your audience.

Value Proposition

That’s not to say this new found access to audiences will change the fundamentally open nature of podcasting at the publisher. While there will be most certainly exclusive productions on the streaming platform, Gimlet’s most popular offerings won’t disappear from other podcast platforms. At the time of the announcement, Spotify said they had no plans on putting the content behind paywalls.

Similar to this approach, there are efforts like the premium Stitcher service which removes ads from their free shows and offers bonuses to subscribers.

Subscription Business

So what about the companies who do want to publish content behind a subscription fee? Podcast publisher Luminary has set its sights on being the Netflix of podcasts. With a planned launch date of June, the service will charge $8 a month to get access to podcasts from the likes of Trevor Noah, Conan O’Brien, and Malcolm Gladwell. The media start up hopes the draw of big names will have people opening up their wallets.

Although, there are those who are a skeptical of the reach of direct to consumer efforts.

“Well everybody wants scale and they want people talking about [their show] and to engage with it,” said NPR’s senior vice-president of programming and audience development Anya Grundmann. “So you haven’t seen a lot of subscription [offerings] from the very beginning when trying to build audience.”

Grundmann pointed out that podcasts often end up being the “carrot” that drives consumer purchasing of subscriptions to news publications. Recently, the Guardian began running podcast ads in the shows they produce for their membership program, which seems to be having positive results.

Reaching the Masses

However, there’s also a drive to reach as many people as possible, much like its predecessor, broadcast radio. “I don’t see us putting our stuff behind a paywall,” said Grundmann of the public broadcaster. “Our goal is to reach as many people as we can and not just people who have money.”

That doesn’t mean NPR has not benefited from new ways to monetize the format. Grundmann said it has extended its podcast-related events business because there’s “so much energy of people wanting to meet people and be part of a community.”

Whether through the draw of exclusive content for power users or listening experiences without ads, direct to consumer offerings from podcast producers are beginning to emerge. But it’s also obvious that the traditional subscription model might not be the best fit for the resurgent industry, as many producers are hesitant to go all the way and lock content behind paywalls. Creators will need to continue to experiment and test strategies to determine the best ways to monetize the connections with their audiences.

How The New York Times’ free student subscriptions strategy will pay off

February 28, 2019 Chris M. Sutcliffe – Independent Media Reporter

It does not come as a surprise that most digital publishers look to the New York Times for subscription strategy advice: On February 6th, The “failing” New York Times posted digital revenue of $709 million for 2018, based largely on its 3.4 million digital subscriptions. It also bucked expectations when it came to its ability to attract new subscribers. The NYT added 265,000 new digital subscriptions in the last quarter of 2018, which it calls “the biggest gain since the months immediately following the 2016 election.” As a result, the paper has set itself the new goal of having 10 million subscriptions by 2025.

This all suggests that while the “Trump bump” was a reality, there is more to the NYT’s success than simply being the target of The President’s ire. In an interview with Ken Doctor, the NYT’s Chief Executive Mark Thompson attributes much of its success to steady investment in the newsroom – which he calls a “very simple, old-fashioned model” – through having the highest number of journalists on staff in the paper’s history.

The vast majority of news publishers, however, do not have the coffers of a national title. Later in the interview, Thompson acknowledges that the NYT has unreplicable advantages when it comes to adding staff. However, the New York Times is employing a strategy that more publishers can and should emulate: It’s giving its news away for free – to 3 million students.

Premium value

On its face, the idea sounds crazy. Back in July of last year, the NYT’s ‘The Truth Is Worth It’ advertising campaign made paying for high-quality news the responsibility of the public. Its press release stated that its research had “found that seventy-three percent of U.S. news consumers who pay and subscribe to a news source say that it has never been more important to support quality journalism.”

That rhetoric has also been employed by publications including The Times of London, the Guardian, New Statesman, and others as they market their own paid-for news products. Even local and hyperlocal publishers are increasingly pushing the idea that, while “news” is readily available for free online, quality news needs to be paid for.

In fact, the NYT is making a bet on free as a long term investment in demonstrating the value of quality journalism. As with the growth in its newsroom headcount, this is an investment the NYT is making in its future. And, while there might not be straightline attribution between these free subscriptions and total revenue for the foreseeable future, it is a smart bet that it can convert some readers who might never have paid into lifetime subscribers.

It’s a clever strategy for a number of reasons. However, it all builds upon the idea that free subscriptions for a particular demographic can convert a proportion of people –0 who otherwise might never pay for digital news – into regular subscribers.

Subscription satiation

While young people are more likely to pay for news than previous generations, there is a hard cap on how many news subscriptions they can afford. The latest Digital News Report from the Reuters Institute for the Study of Journalism found that just 14% of people globally currently pay for online news. And it’s vanishingly unlikely that the majority will pay for more than one subscription. Additionally, the price of an annual news subscription can take a back seat to entertainment services, though this is not a phenomenon unique to young people. Competition for those 14% of people, then, is going to be fierce.

(The NYT’s scheme is currently limited to students in the United States. However, the increasingly international NYT plans to open it up to international students as well, where the propensity to pay for news is typically lower than in the US).

So by offering the subscription for free, the NYT is effectively betting that it can create a relationship with enough students to make the scheme worthwhile. Having that preexisting relationship with a potentially lucrative audience is vital: With more players entering the subscription space, it’s unlikely that more than a handful of truly international publishers will be able to sustain themselves solely with the revenue from the 16% of people who are willing to pay for news in the US.

Those subscribers are a rare commodity, and getting young people on board early could mitigate some of that conflict with the NYT’s peers.

Retention costs

The Axios piece that trumpets the NYT’s 3 million student subscriptions contains a telling quote from Hannah Yang, head of subscription growth at the paper: “We already have high retention, but I think this could make it almost bulletproof.”

It’s a vote of confidence in the NYT’s ability to retain subscribers, but it’s also tacit acknowledgment that the cost of acquiring new subscribers far outstrips re-upping the contracts of existing ones. By some accounts, it costs up to five times as much to acquire a new subscriber than to retain an existing one.

While it’s never been explicitly stated, that is presumably the main reason behind similar subscription schemes at at The Financial Times, and sharply discounted student pricing from The Times of London. From an acquisition point of view, it’s far cheaper to reignite an existing relationship than forge a new one from scratch.

Corollary benefits

Having an extra 3 million subscribers – particularly younger ones – on the books also has a beneficial impact on the NYT’s relationship with advertising. Brands are keen to reach as many people as possible, and younger demographics are highly desirable to some. So, while marketing subscriptions relies on having the depth of content that the NYT’s expanded newsroom offers, marketing products and commodities requires reach.

Additionally, having data on those self-selected subscribers is invaluable. Thompson makes this observation, both in the Nieman Lab article and in the press release, noting that “we are more attractive to the world’s leading brands than we would be if we didn’t have a digital subscription business. That’s why we’re growing our digital advertising business.”

Having those logged-in users also allows the NYT access to user data that allows it to refine its publishing strategy and the types of content it highlights to interested readers. Over the course of the last few years, The Times of London has been using exactly that sort of data to reduce consumer churn by appealing to their favourite aspects of the subscription. The greater the sample size, the better the refinements. Therefore, 3 million extra subscribers equals a huge amount of data points.

From a purely altruistic point of view, too, offering subscriptions to those who might not otherwise be able to afford one fulfils the journalistic remit to inform the public. That was explicitly the reason the FT announced it was extending its free access to FT.com to 16–19 year olds globally.

The downsides

In a recent episode of the Media Voices podcast, we discussed the practical difficulties of other publishers trying to emulate The New York Times. It has, after all, a number of inherent strengths that most newspapers simply won’t be able to replicate.

In particular, it has a profitable business that allows it the luxury of both investing in its newsroom and the time to let those free subscriptions percolate and, eventually, have a chance to develop into full subscriptions. As a national title, it also has strong brand recognition, and can reach students from coast to coast.

Some other publishers, particularly local papers, simply don’t have the time to let those experiments play out. They also may not have enough students or other potential future subscribers in their patch to make it worth their while, and consequently we are already seeing many local publishers iterating on a hard paywall model rather than letting a particular demographic in for free.

Ultimately, it all comes down to whether free student subscriptions allow a newspaper to bypass that hard cap on propensity to pay for news. If reducing the friction of onboarding, deepening the relationship with the user during their free trial, and using their data to support other parts of the business adds even a few percentage points to the number of people who will re-up that subscription, the endeavour will have been worthwhile.

Advertising | Innovation | Revenue

CPM is old news: The business case for selling content differently

February 12, 2019 Trisha Stefani, VP, Media Partnerships – Pressboard

Of the millions pieces of content that are published online every day, only 10% are ever seen.

If that shockingly low statistic makes your heart sink, you’re certainly not alone. Publishers across the globe are fighting the increasingly difficult battle to get their articles in front of the right people – or even just real people. From fake ad impressions to the death of organic traffic, the digital maze that your content needs to navigate its way through before appearing on the newsfeeds of your target audience is becoming more and more complex.

This crowded, often disingenuous advertising landscape has brought the industry to something of a crossroads. Quality engagement is both publishers’ most valuable and scarcest commodity. It’s also more expensive to achieve than ever before. So how do publishers give advertisers more of what they want without spending themselves into the red to deliver it?

Perhaps the greatest obstacle to winning the fight for engagement is the CPM, or cost per thousand impressions, model. Only by tossing this outdated method of ad performance measurement out the window can the industry move forward. But what’s so bad about CPM, and what should be called upon to replace it?

Out With the Old…

The CPM model was created during a time when banner ads and impressions reigned supreme. Getting an impression on a banner ad only required a reader to open the webpage and view the ad for a second, which is fine when you’re raising awareness of a shoe sale or a flight deal. But it simply doesn’t work for content. Whether that content is an article, a video, or a social post, its power comes from engaging readers or viewers with a story for an extended period of time, during which they become aware of your values and develop a connection with a brand’s voice. Scrolling past a sponsored headline on your homepage just doesn’t deliver the same result.

The mass publisher shift towards branded content and content marketing arose out of a desire to forge more meaningful relationships with customers — and when was the last time you made a connection with someone in a second? For this reason, selling on impressions and praying you succeed doesn’t work. This model also doesn’t put value on the thing publishers are best at: crafting an engaging, powerful story. Content needs a new measurement (and pricing) strategy that better reflects its strengths and rewards publishers for their efforts.

… And in With the New

If you’re seeking guaranteed, meaningful interactions with your stories, one possible solution could be the Cost Per Read (CPR) model. Where CPM measures split-second impressions better suited to display ads, CPR bundles the content with a number of high-quality reads, so advertisers know exactly what to expect.

The rapidly growing and evolving digital advertising landscape also demands a greater degree of flexibility and control over content. To cover the reach limitations of models like CPM, publishers often tack on things like banners, social posts, and e-newsletter mentions in order to drive engagement. These tactics (and their associated costs) can earn pushback from advertisers who want to see as many of their hard-earned dollars go towards content as possible. To better reflect this modern mindset, the CPR model focuses solely on drawing in quality views to a piece of content, making investing in branded content less risky and removing ambiguity around campaign deliverables.

How the Death of Organic Traffic Killed the CPM

CPR also puts publishers back in the driver’s seat in terms of amplification. Organic traffic has been rapidly declining since 2014. And when Facebook swung its metaphorical axe down upon the News Feed in 2018, it seemed as though the industry would never recover. Publishers had spent years honing their Facebook promotion skills and building a larger, more dedicated audience through the platform, only to have that effort made to feel pointless. Reaching the same readers they used to reach suddenly cost significantly more, making content amplification a loss-leader for many sites.

But it doesn’t have to be. Business models like CPR allow publishers to charge a premium on amplification. That’s because advertisers want to leverage a publisher’s brand and audience to reach as many people as possible. From a profitability standpoint, it also creates an opportunity to generate more revenue on additional earned reads. As long as you’re confident in your story and your amplification skills, you can earn incremental revenue for every new person reached.

Additionally, CPR allows you to grow site traffic on someone else’s dime, because the cost of the social amplification used to drive traffic to branded content is factored into the pre-set cost per read. This wider readership closely aligns with your own target audience, meaning you can connect with new readers who may someday become a loyal part of your audience.

Digital advertising is an innovative, fleet-footed industry that demands a great deal of adaptability from publishers, brands and agencies alike. In the tug-of-war over audience engagement, you’ll want the business model that favors quality attention over cursory impressions on your side.

Why everyone’s getting into streaming and how they plan to compete for eyeballs

February 7, 2019 Erik Martin—Independent Journalist

Want to keep up with the latest plays in the streaming game? You practically need a scorecard and the guidance of a fast-talking play-by-play announcer to keep up. For proof, consider just some of the latest streaming service bombshells to hit the news in the past few weeks:

Viacom purchased Pluto TV, an AVOD service.
Sinclair introduced Stirr, featuring content from its 191 TV stations.
Amazon debuted IMDB Freedive, an AVOD service.
Netflix and Hulu raised subscription prices.
NBCUniversal is prepping a free, ad-supported video on demand (AVOD) service available to anyone who already subscribes to a pay-TV plan or for $12 to those without pay-TV.
BBC and Discovery to pool wildlife programs in subscription streaming deal
WarnerMedia decided its forthcoming streaming service will feature some content supported by ads.
NBCUniversal announced its OTT roadmap.
ESPN+ passes 2 million subscribers in under a year
The Criterion Channel set an April launch date for its streaming service.
Disney continues to ramp up its Disney+ streaming service, expected to launch later this year.

All of these moves speak, of course, to a larger and evolving trend: Anybody and everybody in the media business seems to be getting in on the OTT act. The idea is to take their product direct to the consumer via an AVOD or SVOD (subscription-supported video on demand) model. And that’s creating an increasingly crowded field of competitors.

It will be fascinating to see who else enters the fray and who will survive and thrive in a crowded OTT world where consumers only have so much viewing time. To help make better sense of all the market chaos—and understand what streaming services will need to do to stand out from the crowd—I spoke with several industry experts.

Why more media players want in on streaming

It’s no big surprise why news and entertainment companies are jumping in and jostling for position in an already congested OTT pool: Consumers crave streaming content.

“They don’t want the same bundle of channels they receive today. And they don’t want the same, scheduled experience they’ve had for decades,” according to Peter Naylor, senior vice president/head of advertising sales for Santa Monica-based Hulu, which now has 25 million subscribers. “Consumers want choice and control in their TV experience. In order to continue to reach consumers, TV must move from a business ruled by cable and satellite gatekeepers and by a traditional schedule to a model where the consumer truly gets to choose.”

Billy Nayden, research analyst for Parks Associates in Dallas, agrees. “Younger consumers are watching traditional television at decreasing rates. In order to reach them with video content, internet video is a necessity. A dedicated streaming service helps facilitate delivery of that video and gives consumers a centralized place to access content,” Nayden says.

Offering a direct-to-consumer streaming service also provides some unique benefits.

“Broadcasters and content companies are able to collect data on consumption and their audience, which is often not available through over-the-air broadcasts or pay-TV providers. Direct offerings also provide a hedge in pay-TV licensing negotiations, allowing networks to reach consumers even when blackouts occur on pay TV,” adds Nayden.

Overcoming multiple challenges

However, experts caution that fragmentation of content sources, changing viewer habits, multiple direct competitors, and rising content costs make competition in streaming extremely difficult.

“The number of streaming services available globally has exploded in the past few years, and they are now competing not just with other streaming services but also pay TV, user-generated content like YouTube, and digital entertainment options like video games for consumer time and eyeballs. Standing out and innovating in a crowded ecosystem is a major challenge,” says Nayden.

Laura Martin, senior media analyst for New York City-headquartered Needham and Company, says discovery and clutter are huge problems. “Roku has nearly 4,000 video apps of free TV and about 1,000 apps of SVOD that the 28 million connected TVs in their network can choose from,” she says. “That’s many more choices than the 200 channels you typically have in a linear pay TV bundle.”

Additionally, to succeed long-term in the streaming space you need deep pockets, says Dan Rayburn, principal analyst at Frost & Sullivan in New York City. “Think about who’s behind the big services today—Sling TV is owned by Dish, Direct Now is owned by AT&T, and Hulu is co-owned by Disney and Comcast” (as well as Fox and AT&T), Rayburn points out. “A lot of these services can’t stand on their own as a profitable platform because the costs to license and create all their content is too high.”

You also need a deep library of content to compete effectively, per Alan Breznick, cable/video practice leader for Light Reading in Toronto. “Although, if you’re a niche player going after a specialized market, like wrestling fans or hobbyists, and no one else has such a channel yet, then you don’t necessarily need a huge library of old content,” says Breznick.

Another huge hurdle? Retention. “You’ve got to worry about churn rates and how to keep your customers as well as keeping the cost of acquiring customers down,” Breznick adds.

Plus, “it’s going to get harder for the smaller companies because so many of the big competitors entering this space—like Sinclair, NBC and Disney—have free marketing opportunities. They have other media outlets with unsold ad inventory they can use to promote their streaming services,” says Martin.

A myriad of models

In the OTT space, there is no such thing as one size fits all. A variety of service models and pricing tiers exist that often make it difficult for analysts and consumers alike to compare apples to apples (see Sidebar for an overview of the major services). Some brands strictly follow a direct-to-consumer formula while others also partner with a pay-TV service (by, for example, offering authenticated streaming apps). And some services run ads while others don’t.

“Ads have always been in the mix for many of these subscription channels because the cost to make and license the content is still too high—you can’t make enough money on subscription alone,” says Rayburn. He notes that ad-free Netflix—despite its 139 million paying subscribers—still expects a negative cash flow of $3 billion in 2019. This is likely a big reason why it recently raised (and will continue to raise) its subscription fee.

“It’s tricky. We’ve had this mentality as consumers that content should be free for a long time, thanks to YouTube and others. Now, we’ve got several channels charging up to $15 or more per month and live services like YouTube TV charging $40 and up monthly,” Rayburn says. “The question is, how much higher can streaming services push their prices before consumers say no?”

Strategies for success

Ian Wishingrad, creative director/founder of BigEyedWish in New York City, says the formula for sustainability and profitability in the streaming market is simple. “Have award-winning content. ‘The Handmaid’s Tale’ legitimized Hulu and ‘House of Cards’ legitimized Netflix. You also need the right price. If you’re good and your price is right, you’ll get hits,” says Wishingrad.

Nayden seconds that sentiment. “To maintain subscribers, services must offer a variety of compelling content exclusive to their particular service,” says Nayden.

That’s why, according to Naylor, “over the last year, we’ve focused a lot on adding more content to the service, including full series runs of shows like ‘ER’ and ‘Lost,’ and new originals like ‘Castle Rock.’”

Content may be king, but so are customers, insists Breznick.“You really have to know your customers and the market you’re going after.”.

Offering your patrons more choices—in programming as well as pricing—can go a long way, too. “Convenience to the consumer is the new service. Giving options makes you flexible and cool, versus ‘this is the rule, take it or leave it,’ Wishingrad adds.

Ask Martin and she’ll tell you that the best way forward for OTT services is to “have at least two revenue streams, such as subscription-supported, ad-supported, eCommerce, micro-payments, etcetera.”

And, as mentioned, partnering with pay-TV providers could bring increased visibility and exposure to your service, “especially among consumers who otherwise would not have known about the service,” suggests Nayden. “Until recently, the operator set-top box has remained one of the few in-home connected devices that OTT video services were unable to penetrate. The pay-TV set-top box is often used daily. Being available on that box is a big boost to user convenience.”

A booming market

Virtually all of the media giants have launched or announced an impending standalone streaming service by now. But there are others poised to make a splash, and legacy video brands are far from the only players looking at the streaming opportunity.

Nayden foresees major print media brands entering the fray eventually, too. “While print media has found it financially difficult to transition to the new digital marketplace, I think the space for news-based OTT services represents a significant opportunity for content creators,” Nayden explains. “Cheddar and Newsy give us an example of what is possible. If a traditional newspaper like The New York Times or Wall Street Journal could partner with a video content creator and build a service that combined access to premium print and video content, I think it would attract a significant amount of paying news junkies.”

Breznick also envisions a day coming soon when college sporting programs—like Notre Dame football—roll out their own streaming service. “And at some point, every single broadcast channel out there is going to have to think about it,” adds Rayburn.

Major Streaming Services and Monthly Costs*

Live services

YouTube TV: $40
Sling TV: $25 and up
PlayStation Vue: $45-$80
FuboTV: $45 and up
Hulu Live: $45-51
DirectTV Now: $40-$75

SVOD (subscription video on demand) services

Netflix: $9-$16
Amazon Prime Video: $13 (when included with Prime membership) or $9 as a standalone service
Hulu: $8 (ads) to $12 (no ads)
HBO Now: $15
Showtime: $12
Starz: $9
MLB.TV: $25 and up
CBS All Access: $6 (ads) to $10 (no ads)

(*rounded to the nearest dollar)

Advertising | Perspectives | Revenue

The threat to CPGs creates advertising opportunities for publishers

January 22, 2019 Todd Krizelman, CEO – MediaRadar

Packaged goods are typically the biggest spenders in advertising. Not only is a CPG company’s brand and product mix massive, but the competitive threats from e-commerce and direct-to-consumer brands are significant and growing. The competition has taken a toll. In the last two years, CPG sales have declined. As a result, marketers are spending billions on advertising to safeguard their market share and stay top-of-mind among consumers.

For publishers, however, the competitive marketing environment has created a substantial revenue growth opportunity. CPGs are notorious TV spenders, but they also spend considerably on print and online. For publishers to compete for those dollars, it’s important for them to know these CPGs as well as possible.

CPG Ad Intelligence

With that in mind, here’s an advertising-intelligence snapshot of three of the biggest CPG advertisers – according to annual revenue from 2018 – based on MediaRadar data.

Nestle SA – Nestle is the top CPG by revenue, with nearly $90 billion on the year. But it only grew by 0.4%. Still, in North America, the brand spends nearly $640 million on ads. According to our data, Nestle invests in premium ad units, and it advertised on over 250 different media properties in the last year across multiple formats. For publishers, this could mean opportunities with digital video, native and other premium formats. Nestle launched and advertised 90 new products in the past 12 months. There are nearly 125 people on file in marketing roles at Nestle, as well as over 50at their agencies. This offers a lot of targets for publishers.

Procter & Gamble – P&G’s sales declined in 2018, down nearly half a percentage point. Still, the company brought in more than $65 billion in sales. The company’s marketing budget has been slashed by hundreds of millions in certain areas in an effort to adapt to the sales outlook with cuts of $200 million alone in digital). Still, even with a contraction, the company is one of the world’s most prolific marketers, pouring more than $7 billion in advertising globally. Like Nestle, our data finds that P&G invests in premium ad units on over more than 250 properties. They launched slightly fewer products, though, with “just” 83 in the last year. P&G’s marketing team is comparable to Nestle’s, with over 125 people in marketing roles, according to our data. We’ve also identified nearly 130 agency people who work on P&G business. Perhaps that speaks to chief brand officer Marc Pritchard’s push for agency streamlining and transparency.

PepsiCo – PepsiCo beat out Unilever in sales with $63 billion total on the year. The company is one of the few CPGs to see some sales growth, with an uplift of 1.2%. Everything from Frito-Lay snacks to its beverage portfolio have helped the company rise above some of the stagnation experienced by its peers. In terms of where PepsiCo is advertising, the numbers were fairly similar to those for Nestle and P&G. All three prefer high-impact inventory and spend on hundreds of media channels. But PepsiCo only launched and advertised 17 new products in the past 12 months. That seemed to benefit their sales (a more focused approach, possibly). However, it likely doesn’t help publishers who would benefit from the company’s need to promote more new products. Additionally, PepsiCo has the smallest overall marketing team, with almost 100 people on file in marketing roles and over 50 at their agencies.

As CPGs come under threat, they will consolidate some of their marketing spend. However, overall, these companies continue to be massive sources of revenue for publishers. A careful analysis of their growth and marketing strategies – investing in premium formats, new product launches and more – can help publishers unlock more value from existing relationships or even build new ones.

Revenue

A new hybrid revenue model for OTT

January 14, 2019 Dana Ghavami, CEO—Spotible

New times call for new hybrids. In the fragmented, highly competitive, and fast-paced world of content, publishers cannot rely on a single source for anything. Social media and network monetization are barely bearing their weight as one of the three legs on the revenue stool. Subscriptions are gathering steam and have serious potential as a second leg (given the emergence of OTT). But this leg is still a bit wobbly. Remember that there’s only one content company that rhymes with Get Trix that relies solely on subscription revenue. Advertising in all its forms, especially sold direct, sponsored and native, is the third leg. Right now it bears 20%, 40% or more of the revenue load for top tier subscription-based content companies.

Ad Experiments Emerge

As advertising is coupled with subscription in the business of content, it will become increasingly important to identify and maximize what I refer to as the consumer tolerable revenue threshold (CTRT). This requires entirely new ways of thinking and advertising. A total ad payload optimizing revenue needs to be defined and delivered across total content consumption time that is tolerable to each type of viewer (subscriber or free viewer).

Today, the predominate form of video advertising is instream. This takes the form of programmed commercial breaks during live streams or pre/mid/post rolls in video on-demand (VOD) content. Compare this to the traditional TV ad model, which averages 8 minutes of commercials for every 30 minutes of content watched.

Viewer’s attention dwindles as content and screens proliferate. Going forward, the digital model will need to adapt and evolve. As a result, new ad models and formats are being invented to maximize CTRT beyond instream. In order to create a new hybrid in OTT, CTRT requires more flexibility in ad load and controls for ad exposure for a viewer’s content journey in the totality of their time spent with subscribed content. The methods of optimizing CTRT today will need to evolve beyond ad selection and rotation instream to managing user experience across different ad forms and sponsors throughout the interaction with content.

Adapt to Survive

As new formats emerge, content companies will need to be flexible in order to experiment and manage CTRT to maximize ad revenue with subscription revenue. Every moment a viewer spends with content needs to be seen as an opportunity, including when the content is paused. For example, displaying commercial messaging in between viewers pausing streams for their own breaks while an increasing amount of video content is being watched on demand (VOD).

Every ad a viewer sees needs to be seen as a prospect to create engagement with a brand, including interactive ads that drive user action. For example, content providers need to come up with ways to input data from interested viewers or distribute information / coupons to the personal devices of the viewer.

Every member of a household and targetable data parameter needs to be factored in each ad experience, including viewer sentiments. Essentially, every exposure and interaction with an ad needs to be managed as part of the total user experience to formulate a new hybrid for success.

In the prevailing world order, it is not the biggest or the smartest who will prevail but those that are most able to adapt. In the emerging opportunity of OTT, along with diversifying revenue sources with subscription and advertising, the publishers that prevail will be the best and most nimble in experimenting and adapting new models with viewer experience in mind. The optimal CTRT will create the most profitability, for all.

Subscriptions make sense. But how many will consumers pay for?

January 10, 2019 Bryson Masse – Independent Journalist

It’s no secret: In the coming year, readers will run up against more memberships, more pleas for donations, and more paywalls. In short, more opportunities for money to escape their wallets to bolster media outlets they have previously accessed free of charge.

Companies like Buzzfeed and Quartz have recently embraced direct-to-consumer business models, joining traditional subscription outlets in a rush away from digital advertising reliant models. Beset by multipronged threats like the internet giants Facebook and Google sucking up all traces of revenue growth, declining consumer trust, and an alarming trend of fraud cases, it’s not hard to see why digital media companies are looking for alternatives.

But this shift comes at a cost. While ad based revenue models optimized for reach, the new normal will be the tailoring of niche content to attract a reliable paying clientele. The Atlantic’s Derek Thompson recently predicted that the entire industry will return to the early days of journalism where a “party press” would stoke the partisan emotions of their readers.

“News media of the future could be as messy, diverse, and riotously disputatious as their audiences, because directly monetizing them is the new central challenge of the news business,” wrote Thompson.

That means that digital publishers will need to navigate the real risk of subscription fatigue. How much are consumers willing (and able) to pay for?

What it will take to survive in this new DTC world?

“As loose paywalls tighten and everyone seeks reader revenue, I imagine audiences will be forced to make choices, especially in what is looking like a dramatically slowing US economy,” said former GIzmodo Media Group CEO and Columbia University professor Raju Narisetti.

He expects that people will begin to add it all up and realize that — given other recurring payments like internet service, mobile, and subscription-based everything from meal services to shaving supplies — their content selection might need to be more discriminating.

Needless to say, publishers need to figure out how to compete for limited discretional dollars. One approach that many are trying is aggregate services like Flipboard, Texture, and Blendle.

Adding Texture

An obvious option could be an even more widespread integration into an app like Texture, purchased by Apple last year. Texture offers a service similar to Netflix wherein a group of publishers bands together to offer a wide range of branded content for a single rate. While currently available to use, there are persistent rumors of a spring relaunch of the service included in a future Apple News update, foreseeably offering an increased amount of content above and beyond the current free selection. It’s hoped that the move would have the same omph Apple brought to its Apple Music platform. At least that’s the pitch.

Publishers remain skeptical, though. “Some executives fear Texture could end up doing more harm than good. Their concern is that Apple could steal their current subscribers, who would save money by reading articles on Texture instead,” reported Bloomberg.

One thing that could change that calculus is the confidence boost of a New York Times-shaped news outlet taking the plunge, according to Narisetti. While he admits it’s natural for the larger players to be cautious, there’s a vector for profit in the service.

“That’s because they are currently giving away up to 20 stories entirely for free on Apple News. So, in my mind, they are actually likely to incrementally gain by monetizing that via Texture, than lose any significant, core loyal direct subscribers to lower-priced subs,” he said.

Once that’s overcome, “the US news floodgates will open up on Texture, much like how NYT paywall given the confidence to the American general news industry,” he added.

But there are always more than one way to approach the problem.

Infinite Scroll

Focusing on user experience, the creators of Scroll.com want to offer a direct to customer alternative which side-steps competing with a publishers revenue models by offering to remove the ads from a collection of publishers for a monthly fee. Sites load faster, users can opt out of advertising, and publishers get a new revenue stream.

“We avoid the problem of cannibalization and instead get to complement rather than compete with them. Most publishers see us as a middle of the funnel service, creating more engaged users who can then be converted into their own plans,” said Scroll founder Tony Haile.

But perhaps the industry needs to learn from the experience of the wider technology industry. Subscriptions are an increasingly popular way of packaging any digital-adjacent service (often dubbed Anything as a Service, or XaaS), whether it be a ride sharing plan, in-app purchases, or even the meals you make for dinner. But they’ve even suffered through the same issues as facing the digital publishing industry.

Value for Life

“As a media company looking at some of the struggles of consumer XaaS companies like Blue Apron last year, I would make sure to focus relentlessly on reducing my churn rate, and increasing the Customer Lifetime Value (CLV) of my paid subscriber base,” said Gabe Weisert managing editor at Zuora, a subscription management platform provider.

He explained that the way towards healthy CLV is to drive usage at every opportunity. Keeping people engaged keeps them paying customers. Strategies which achieve that include cross-selling and upselling. For example, the New York Times saw solid growth of new subscribers from their crossword and cooking app offerings.

To entice their audience, Buzzfeed is offering tote bags for new subscribers, but Amazon is taking those subscriber-enticements to a new level. The Seattle-based retail giant has started offering free sample of items of products based on users’ shopping habits data—with the only goal to getting us to buy more.

“CLV should be the gold standard metric of every media company. That’s all Netflix cares about. It’s all Amazon cares about. That’s why [subscription services] keep giving us “free” stuff — they know exactly how much those investments materially affect the value of their subscriber base,” he said.

Why publishers see a future in a DTC/advertising hybrid model

December 13, 2018 Chris M. Sutcliffe – Independent Media Reporter

After a brief hibernation, the era of direct to consumer revenue (DTC) is back and booming. Over the past six months, paywalls have sprung up around areas that used to be free and become smarter about who they let through. Paid newsletters are booming, even emerging around topics like cryptocurrency. Podcasts have gone members-only, membership models have undergone a Cambrian explosion and emerged vastly more disparate, and new funding methods for “slow journalism” outlets have come into being.

It’s a far cry from the distant days of 2016, when nearly every news publisher was rushing headlong into distributed publishing on social channels, relying primarily on the reach of the platforms and their ad networks to deliver significant revenue. Now, following some high-profile casualties of that publishing model and the “Trump bump” reviving interest in subscriptions, direct to consumer revenue is the name of the game for many publishers.

The value of a subscriber

The benefits of regular revenue straight from audiences are obvious and mutually reinforcing: Compared with other sources of digital revenue, the number of players is small, so less gets taken out of the value chain between consumer and publisher. At a time in which the digital advertising space is overcrowded (and dominated by two or three players), it’s no surprise that publishers would prefer to earn revenue directly from one consumer over sharing a tiny piece of the ad pie.

Consequently, one paying subscriber is worth many times that of a consumer monetized through advertisers. According to Jasper Jackson, digital editor of the New Statesman, which went behind a paywall in March of 2018: “One subscriber is worth many thousands of digital readers that you’re only monetizing through advertising. I’m pretty certain that subscription revenue is a better funding mechanism for good journalism, and particularly for the kind of journalism we do.”

Are subscriptions the right move?

That is also the contention of News UK around its subscription-based news products. Alan Hunter, head of digital for The Times and Sunday Times, said that while the industry has been in the grip of the chase for advertising revenue through scale, the pendulum is now swinging back the other way:

“When we first introduced subscriptions, people thought we were crazy. For a long time we’d go to conferences and people would pat you on the back and say ‘Oh I’m really sorry about this’, but if you look back on it it seemed very logical that journalism costs money and you have to pay for it one way or another.”

Subscription history

Similarly, many of the larger English-language newsbrands have a history of DTC revenue from their time as physical newspapers, when a significant proportion of their revenue came from subscriptions. Many of those organizations were in the early stages of figuring out how to convert digital readers to a similar system years ago, before they were seduced by the appeal of digital ad revenue through platforms.

Small wonder then that as the promise of digital advertising revenue failed to materialize for quality content producers, they have transitioned back to subscriptions and memberships to sustain them. It does mean trading a large proportion of the scale that comes from existing as a ‘“free” ad-supported publication. Jackson says that “pure reach is a wonderful drug.” However, for publications that have the requisite reputation and audience to make it work, the trade-off is worth making.

The New York Times, for example, reported 2017 subscription revenues of $1 billion early in the year. It also reported annual average growth of almost 50% for its digital subscriptions since the paywall was introduced in 2011. Based in the UK, The Financial Times is close to having 1 million subscribers, almost 80% of them digital.

The Guardian, too, has made direct-from-consumer revenue a core tenet of its plans for the next few years. And a strong showing from its membership scheme to date suggests that engaged audiences might be willing to pay for content that is nominally free from a brand that they feel an affinity with.

Subscriptions: not just newsworthy

Nor is the drive to direct monetization of users limited to newsbrands. Consumer-facing titles are introducing new membership tiers to generate more revenue from core audiences. And, while it’s now reportedly struggling to make it work effectively, even Google’s YouTube is feeling the pressure from OTT services like Netflix to introduce its own subscription-based premium video packages.

While these brands have a strong legacy to lean on, some digital pureplay brands are transitioning to hybrid advertising-membership models. Quartz, for example, has launched a membership model based around a partial paywall and the ability for its members to talk directly to editors and journalists, a perk that is also in effect to a greater or lesser degree at the Guardian, The Times and The Atlantic. Meanwhile, BuzzFeed, which was the poster child for scale, social distribution, and branded content revenue for years, has also launched a membership scheme … with mixed response.

DTC takes work

However, these shiny new opportunities for DTC revenue come with new considerations for publishers. Outlets like The Times are investing more in tech to reduce churn, since research from The Financial Times demonstrates that it costs four to fives times more to attract new subscribers than to retain existing ones.

The propensity to pay for online news is still relatively low outside the Nordic countries. according to the latest Reuters Institute Digital News Report, only 16% of people in the US currently pay for news online, and mainly to liberal leaning newspapers (though the proportion is increasing). That suggests that there is currently not enough digital subscription revenue going around to support all the outlets that are transitioning to direct reader revenue.

Risky business

Despite these new challenges, publishers have taken note of the fate of outlets like Mic and Mashable, whose strong valuations in earlier years belied an over-reliance on social distribution to achieve scale and indiscriminate digital advertising revenue. Subsequently, their respective collapses have galvanized other publishers to seek to transition to direct to consumer revenue.

Despite that, most digital publishers are not seeking to abandon other sources of revenue entirely. Many media businesses recognize that advertising can still provide a significant source of revenue. Jackson from the New Statesman explains: “Digital advertising, if you do it well, cleverly, can bring in significant revenue. There’s also an argument that pure reach is a very good marketing tool for print sales.”

In the future, then, it’s unlikely that direct-to-consumer revenue will entirely supplant advertising revenue as the primary means of monetisation for digital publishers. Instead, both will continue to play a role in publisher business models based around a wider variety of revenue streams.

Advertising | Perspectives | Revenue | Video

How OTT will be sold in 2019 and beyond

December 11, 2018 Dana Ghavami, CEO—Spotible

OTT content is now viewed more on TV screens (connected TVs or CTVs) than smartphones. From an advertising perspective, that means larger and more valuable video. Large digital video (greater than 400 pixels wide) has always translated to higher value. However, the biggest determining factor of worth is determined by how its sold: direct or programmatic.

By and large, connected TV (CTV) inventory is sold at a higher value than digital video. In the world of video advertising, the television screen represents the pinnacle of value. With it comes the notion of a captivated audience in their living room, and true scarcity of time and inventory.

Like Cable TV, the OTT video landscape viewed on CTV and other connected devices is highly concentrated across the “Big 4.” The largest amount of monetizable minutes reside on Hulu and YouTube, along with Netflix (which remains ad free together with Amazon Prime Video—for now). The remaining three out of ten minutes in OTT are spent with high quality publishers and broadcasters, such as TV network brands. These create a direct sale value of twenty-something CPMs. These prices are in close proximity to traditional/linear TV rates.

The price of programmatic

As of now, publishers and virtual Multichannel Video Programming Distributor (vMVPDs), including established providers like Dish and startup vMVPDs, sell a predominate amount of OTT ad inventory programmatically, most often through private marketplaces (PMPs). Here, the average price point is in the teens, with CPMs maxing out in the mid-range of around $15.

There are a few reasons media brands are leaning toward programmatic rather than direct sales. For starters, many organizations lack direct sales teams. Furthermore, OTT is nascent. Thus, the industry needs to contend with tracking on a household level where it is getting harder to obtain IP addresses to map out connected devices. Then there’s the international reality of GDPR, which classifies IP addresses as personally-identifiable information (PII).

All in all, it’s harder to correlate traffic from OTT ads. It is also difficult to measure viewability with server-side ad insertion (SSAI), which stitches ads into content streams, especially when sold programmatically. And then there’s the issue of fraud. A quarter of all CTV impressions this year were fraudulent (never seen) according to Pixalate.

The contentious issue of fraud among broader tracking issues are keeping programmatic pricing weighed down. Where, with the employment of programmatic monetization the most a publisher can expect to optimize CPM rates is by 10-15% above the current average programmatic video price point keeping overall value in the teens CPM.

Direct sales proposition

However, by selling directly, a publisher can more than double ROI to 30-40% or higher price points above $20 CPM. These price points are well above the possible rate optimization that can be made accessible through programmatic means.

So, looking ahead to 2019 with the continuing expansion of OTT traffic and monetization opportunity, it is a good time to reconsider selling directly. This means assembling or training existing digital sales teams to sell your emerging OTT inventory, which is worth its weight in video gold. In a premium video medium with true scarcity, the future will be directly sold.

Featured Post | Innovation | Perspectives | Revenue

In 2019, these 4 shifts offer opportunities for trusted media brands

November 29, 2018 Jason Kint, CEO – DCN

Successful media companies have always relied upon having a direct, trusted relationship with consumers and advertisers. Consumers want to know the brand and the experiences they’ll get from them. And advertisers that want to build this same level of customer relationship directly seek out these trusted media brands or tune advertising algorithms their way.

The teams at trusted content brands wake up every day and create content people love, products that serve them well, and safe and valuable advertising environments—all while maintaining the high level of ethics and professional standards that benefit viewers, readers, listeners, and a healthy marketplace. And we’re here to support you.

What makes our members unique is also what makes DCN unique. By focusing at the brand level across the entire media strategy, we’re able to advocate and work to advance the future of trusted news and entertainment and partner to develop all sources of revenues. We can also do it without needing to curry favor or meet the needs of a few large tech platforms with out-sized influence who are required partners for any modern publisher.

As we turn toward 2019, it is a good time to reflect on the top-of-mind trends for media companies. Here are four important shifts happening in digital media right now—all of which play into the strengths of trusted media brands:

1. Revenue, direct from audience.

With our quarterly and annual members-only benchmark report, DCN has unique access to market research specific to premium publishers. Importantly, our research isn’t skewed with numbers from Google and Facebook. (This is a very common issue in industry research. Always look “under the hood.”) Our research is based solely upon our members. One of the things our benchmarks tell us is that approximately 80% of members’ digital revenue comes from advertising. However, we’re finally seeing growth in direct revenue from audiences whether it comes in the form of membership, subscription, or donation.

Trusted publishers are uniquely positioned for this shift because they offer exactly what people want: high quality news and entertainment – that’s worth paying for. It remains to be seen how the market evolves in order for this revenue segment to grow as it must, but we’re thrilled to see our members playing a proactive role in shaping the opportunities.

2. Distributed platforms, going over the top

The list of platforms is endless and evolving: YouTube, Facebook, Snap, Twitter, Apple News, Flipboard. While publisher revenues on these distributed platforms have been promising at times (YouTube), they’ve often been disappointing (Apple News, Facebook Watch). But right now, quality content creators are seeing the fastest movement in the video space, particularly long-form and over the top (OTT).

Our best practice research on OTT earlier this year showed how our members are taking aim at these opportunities. However, new gatekeepers are surfacing in the OTT space like Amazon and Roku. And while Google and Facebook don’t like being called “walled gardens,” every new platform will no doubt be planting their own seeds to maximize their profits off your content. Experimentation is essential. But protecting your IP and deal terms early on is critical.

3. Ad targeting, rebirth of context

In the EU, the impact of GDPR has just started. There are new claims calling into question the entire way Google has collected consent for its ad supply, how real-time bidding operates, not to mention endless class-action suits mostly focused on Google and Facebook. DCN has distributed research on Google’s unique and unavoidable ability to mine behavioral and location data significantly beyond user expectations as you browse the web and walk the streets . We’ve argued towards raising the bar on companies who collect data across most of the web while recognizing the inherent trust in choosing to visit your environments, brands and context.

Global leaders are asking more questions than ever. Looming large over the discussion is a new law in California which will impact the very companies that are now (albeit, ironically) advocating for federal laws to save them through preemption. It’s been a wild year when Google, Facebook and its trade group, IAB, are now finally pushing for a federal privacy law thereby admitting their existing frameworks may be failing consumers. Quality publishers have a unique role in shaping any solutions as consumers seek more controls and alignment with their expectations. Consumers don’t know the hundreds of ad tech companies mucking up their web experiences, but they do know you and your brands. And, of course, this value then transfers to ads in this environment.

4. Advertising, direct to consumer

Research from the IAB, as well as industry discussions, has driven a DTC (“direct to consumer”) movement as the next big thing. Here is the great news about this conversation: It’s no longer focused on the plumbing, data, ad tech, and vendors. It’s focused on how brands have value and can connect directly with audiences and consumers, bypassing gatekeepers and intermediaries. This is the sweet spot for quality content companies. In fact, I’d say if anyone wants to better understand how to go direct to consumers, they should start with the members of DCN.

But here’s the rub: Many players in the market won’t ever really be able to go “direct to consumer” without relying on the brand equity of trusted media. In order to find scale, they’ll first need to build demand, be willing to bundle, and find quality brands to associate with and carry their flag. They’ll want to be near those with purpose and value recognized by the public.

I’m sure each of these movements will surprise us in ways we can’t predict. They may develop more slowly than anticipated or accelerate at light speed like the privacy regulation has with GDPR and Facebook’s mishaps hitting in the same quarter. But either way, premium publishers should be ready as, with the right proactive strategy, there are opportunities in all.