With the continued presence of the coronavirus, 2021 appears far from “business as usual.” However, for many publishers, the pandemic acted as an accelerator in media innovation. New ideas for formats, operations and business models were quickly put into action. Now, we see that many of these quick pivots in business practices are becoming long-term plans. Reuters Institute’s annual report, Journalism, Media, and Technology Trends and Predictions 2021, identifies changes, trends and predictions for the media marketplace. Reuters surveyed 234 media leaders across 43 countries to create the report.
Two key themes identified in this study include newsroom transformation and a renewed focus on revenue diversification efforts (see full report for additional trends and predictions).
Newsroom transformation
Journalists continue to work remotely and use online tools like Zoom, Slack, and Teams for interviews and collaboration. 2021 brings a remix of the in-person and virtual to the newsroom. However, the sustainability of hybrid newsrooms looks uncertain with many questioning the creativity and production quality delivered in a virtual setting.
According to Reuters, journalists want more face-to-face interactions and to renew a community focus in their work. That said, new technologies and approaches may offer more community participation with crowd-sourced content and audience-driven investigations. In terms of format and delivery, news stories will focus more on data and visual storytelling formats. Breaking down complex stories to create easily understandable content is a key objective.
Revenue diversification
Media businesses face continued competition from Google and Facebook, which account for most of the advertising growth in the marketplace. This leaves publishers with little to no growth in their advertising revenues. Given this reality, publishers continue their efforts to grow digital subscriptions and other reader revenue in 2021. Further, publishers are exploring new member benefits and price reductions to retain readers who subscribed during Covid-19.
Reuters’ data shows that publishers, on average, report four different revenue streams as being important or very important to them this year. The top four revenue streams publishers are focusing on include subscriptions (76%); display advertising (66%); native advertising (61%) and events (40%).
Ecommerce opportunities
In addition, e-commerce is forecast to double over the next four years to $7 trillion, driving publisher interest in this area. Many plan to curate their content to offer a direct consumer pathway to purchases. Reuters cites Wirecutter from the New York Times and the Strategist from New York Magazine/Vox Media, as examples of successful sites earning affiliate revenue. Publishers are also joining the e-shopping sites, like Buzzfeed’s Tasty brand. They now create their own cooking products and link to the Tasty site.
Others seek to join in the subscription economy. They are testing their strength in selling other company’s subscription offerings in areas such as music, fitness, flowers, and food. Publishers with scale and strong data targeting may prove to profitable in these sales efforts.
Future focus
2021 looks to be another year characterized by experimentation and transformation. Publishers find themselves providing content across multiple connection points. However, many product offerings and end-goals remain the same. Publishers continue to focus on offering relevant and engaging content in exchange for consumer loyalty and long-term sustainability. The road to success is the ability to be nimble while speedily translating new learnings into actionable business practices.
Traditionally, many media companies earned the bulk of their revenue from display advertising. But as the pandemic continues, media companies face an increased need to explore more innovative models of monetizing their content. Here are several ways media businesses can generate new revenue streams:
1. Data
Data is the future of driving revenue. Consider what Conde Nast is doing with first-party data, with its Now|New|Next Segments. These explore what consumers are buying now, how the behaviors might change, and who will spend next. Increased audience engagement is driving the ability to discover new customer segments, opening the door for advertisers whose doors are closed during the pandemic.
Advertising spend decreased during the early months of Covid-19, but now media companies are starting to look at data offerings to entice advertisers. GDPR and additional privacy laws have dictate that this monetization strategy must emphasize a cookie-less future.
2. Monetizing Talent
Reputation and brand are important in the media industry. Quality journalism keeps people coming back — and talent is a big part of that. Media has begun to recognize the value of monetizing the individual. For example, Spotify gained exclusive rights to Joe Rogan and Michelle Obama podcasts, and The Athletic gathered a cult of the best sportswriters. Quake, a subscription-based podcast founded by media veterans, just launched in October 2020 with $2.5M in seed money. Its exclusive shows are headed by top talent in politics and media, like Laura Ingraham, Soledad O’Brien, Mike Huckabee, Andrew Gillum, Marc Lamont Hill, and Buck Sexton.
If media companies don’t start monetizing talent, the best journalists will begin creating their own micro-brands instead. This will further crowd the competitive space and the talent is likely to take their dedicated followers with them.
3. Ecommerce/Affiliate Marketing
Ecommerce in news media is poised for explosive growth. According to Digiday, 85% of CPG marketers are planning to buy more ads from retail media networks. Many media companies are forming partnerships with retail brands, as retailers are piggybacking on the reputation of established media brands, and vice versa. This could be especially lucrative during the holiday season.
Some ways to explore the Ecommerce opportunity include:
Creating newsletters with embedded content to promote either brand advertising or direct-response advertising.
Allowing partners to pay for news real estate by writing their own opinion pieces.
Opening an online shop, like BuzzFeed.
Offering affiliate links for products mentioned.
Opening a pop-up boutique and e-commerce shop for the holidays.
Promoting events with merchandise (for its livestream with Billie Eilish, Spotify is promoting with an exclusive t-shirt).
4. Paywalls
More media companies are putting digital subscription strategies ahead of other initiatives, and the numbers show that’s paying off. The New York Times has reported an increase in subscribers of 2 million year over year, and their digital subscription model is now finally more profitable than their print model.
And the latest report from the Digital Publishers Revenue Index, shows an overall increase in revenue from subscriptions over the past decade. 10 years ago, subscriptions made up only 7% of digital revenue, and now the data show that has increased to 22% of total revenue. Many publishers have begun to explore paywalls — from soft, hard, metered, and dynamic models. If you’ve not yet done so, now’s the time.
5. Communities and Membership Models
With the cancellation of in-person events and social gatherings, there has been a huge decrease in networking opportunities. Companies like Fortune are successfully solving two problems with one (big) concept. Problem 1: What’s a way to monetize virtual events to decrease revenue loss? Problem 2: What is a new way to bring in revenue and create a loyal customer base?
Traditionally, Fortune’s live events were designed for a finite number of people; there could only be 50 people at the Top 50 CEO’s retreat, for example. But Fortune realized an opportunity to grow its community to include previously untapped leaders and create a broader community by launching Fortune Connect in the fall of 2020. This online learning platform and community provides ongoing networking events and educational content to aspirational mid-tier leaders. Fortune is using a membership model to build, and grow, a sticky community.
6. Over The Top (OTT)
A growing list of brands are expanding into broadcast and streaming TV to grow their brand, engage their audience where they go, and bring in a new revenue stream. TIME & Univision won an Emmy. Vox has a top-ranked Netflix show. Axios is on HBO. Vice, New York Times and BuzzFeed have turned to streaming content. Beyond their well-known “Explained,” Vox has branched out further into unbranded production shows.
OTT is no longer an opportunity limited to legacy video or television brands. Media companies of all sorts are finding creative ways to monetize their video investments because it engages a new audience and establishes a new habit for the consumer to connect to the brand.
7. Education
Media companies are providing a growing number of learning/education courses for readers. For example, TIME has expanded its iconic TIME100 people with TIME Talks. The Wall Street Journal launched a mobile app to help provide resources on managing finances during the pandemic. Morning Brew has been putting together 101 courses on topics like Marketing, Finance, and Branding. And Axios is starting 101 video courses on topics like 5G, which are sponsored by companies related to the topic.
Publishers are seeing an opportunity to develop deep subject matter expertise and be the go-to source on certain topics in addition to news stories. It improves the value they can provide to subscribers and pulls in more targeted advertisers since they can reach a highly engaged niche audience on long-shelf life content that can continuously draw an audience.
8. Evergreen
Most hard-news outlets saw a drastic hit to their advertising revenue this year. Even an increase in subscription revenue failed to offset the advertising losses. But evergreen sites like Dotdash — which owns sites like SimplyRecipes and TreeHugger — have seen an 18% increase in revenue. While Dotdash does rely on an ad revenue model, they use ads about ⅔ less than a traditional news outlet and bet on fast page load and better UX for their growth.
What makes it particularly effective is their diversification of brands and content. Their travel brand ads, for example, have decreased while their health verticals have exploded. Having evergreen content allows them more flexibility in what content to create and how valuable each piece is to them since it doesn’t have a shelf life.
As news media becomes increasingly competitive, companies must find innovative new methods of generating revenue that also help attract and retain new customers. By exploring a wide range of approaches, with a focus on your core competencies and customer needs, news publishers are able to stay competitive and build healthier diversification of revenue sources.
Digital subscriptions have helped shape a stronger business for publishers. FIPP’s latest Global Digital Subscriptions Snapshot (Q3 2020) shows that subscriptions are serving to support publishers during the pandemic. In fact, research by Press Gazette reports that during the Covid-19 crisis the largest newspaper groups in the US and UK gained more than one million new digital subscriptions. Not only are large publishers faring well but smaller, regional and specialist brands are also showing record subscriptions.
Despite positive performances in digital subscriptions, Covid-19 brings with it challenges to the industry. Zenith Media expects a 9% decline in internet ad spend this year. The agency estimates a 6% recovery in 2021, driven by the rescheduled Tokyo Olympics.
On a global front, the middle east and Africa will be hardest hit with a 20% decline in advertising revenue. Western Europe anticipates a 15% decline and Latin American a 13% decline in ad spend. The Asia Pacific, Central and Eastern Europe markets are estimated to decline by 8%, respectively. North America expects to register the smallest decline (7%) due to the large spend on political advertising this year.
FIPP Q3 findings:
News publishers’ subscription growth
The Athletic reports 1 million subscribers as of September 2020. Unfortunately, with only a few new subscribers in Q1 2020 and cancellation of live sporting events, the company laid off approximately 8% of its staff. In addition, there were pay cuts across the company to offset expenses.
Caixin Media in Beijing grew subscriptions by 70%, adding 210,000 new subscribers for a total of 510,000 this year. It’s the first media company in China to place all of its content behind a hard paywall.
Dow Jones reports that digital revenue now accounts for 71% of total revenue, up from 63% compared to the same time period last year. Total subscriptions, across print and digital products, is at 3.8 million, driven by a 28% increase in digital subscriptions. Interestingly, 2.2 million of the Wall Street Journal’s 3 million subscriptions are digital-only. Across the entire Dow Jones group, digital subscriptions account for 67% of subscription revenues.
Gannett is centering their business around digital transformation. To date they are close to one million paid digital subscribers.
The New York Times’s added 669,000 new digital subscriptions in 2Q 2020 for a total 5.7 million digital subscriber. In fact, for the first time ever, digital revenue now exceeds its print revenue. Overall, the company’s operating profit of $52.1 million is down 6.2% compared to same time period one year ago.
Magazine closures
South Africa magazine closures:
Associated Media – company closure
Caxton – selling off 80 titles
Media 24 – closed 2 of 5 titles
UK magazine closures:
Immediate Media – closed 11 titles
Bauer Media UK – closed 10 titles
Broadly – exited New Zealand, closed 8 titles and consolidated with Australian Mercury Capital
PLC – closed 6 titles
T1 media was acquired by Future
Streaming growth
Netflix consistently delivers content with new productions and licensing deals to the consumer market. As of Q2 2020, there are a 193 million subscribers globally.
Amazon Prime Video, part of Amazon Prime, is very successful in the SVOD market. Subscribers reached 150 million globally. The company does not break out Prime Video from Amazon Prime. The company does not provide details on active users of Prime Video. However, the Kantar Entertainment on Demand Report offers a third-party analysis SVOD users. The Kantar Q2 2020 analysis shows that Amazon Prime Video subscriptions account for 23% of all SVOD subscriptions. That marks a 14% increase from the prior quarter.
China’s merger discussions between Tencent Holdings and iQIYI could establish the world’s largest streaming service with more than 231 million paying subscribers.
Disney+ is exceeding all expectation with currently has more than 60.5 million subscribers.
Apple TV+ claims 10 million subscribers. However, many subscribers are part of a 1-year free trial offer because they are users of the hardware. Further, Bloomberg estimates that about half of Apple TV+ subscribers never used the service.
The coronavirus’ impact on the advertising industry further strained publisher revenues and forced several to close their doors and others to consolidate. The pandemic also showcased the consumers’ need for trusted news and entertainment content. This need feeds into the relationship of publisher and consumer. Its why consumers value the content and are willing to pay for it.
A life-changing event is when something happens that reshapes everything in your life. And many people see the pandemic as a life-changing event. We’ve altered our work environment, transformed our social behavior, and changed our media habits. However, according to Damien Radcliffe’s new report The Publisher’s Guide to Navigating Covid-19, some Covid-era changes will become new norms. To capitalize on these opportunities, publishers need to emphasize their audience-first focus.
Key findings:
Renewed consumer focus
Businesses across different sectors are reporting negative financial impact due to Covid-19. The most significant revenue declines to date,according to WARC, are travel and tourism (-31%), leisure and entertainment (-29%), finance services (-18%), and retail (-15%).
Within the entertainment sector, the media business is showing financial declines for the year.GroupM expects the US advertising market performance to decline 13% this year (excluding political advertising for 2020’s presidential and other elections). WARC estimates advertising growth for three specific media platforms: social media, online video and search. The hardest hit medium will be newspapers. PwC’s Global Entertainment and Media Outlook 2020-2024 report estimates newspaper advertising (print and online) in the U.K. will register a decline of 27% over the next five years Global Entertainment and Media Outlook 2020-2024 report estimates newspaper advertising (print and online) in the U.K. will register a decline of 27% over the next five years.
With a downturn in advertising, publishers see the importance of a renewed focus on the audience. By doing so, they can accelerate their efforts to establish new revenue streams to lessen their dependency on advertising — an industry imperative that has come into even sharper focus of late. Finding the right path to fulfill audience needs can help publisher identify new revenue opportunities.
Audience-first directs path to new revenue
By all reports, consumption of content increased during the pandemic. In part, working from home during Covid-19 offered the audience more opportunities to consume content. There were marked rises in internet usage and streaming video viewing. Even local news publishers are benefitting from consumer interest in information relating to Covid-19 in their neighborhood.
Further, record traffic metrics and increased subscriptions illustrate a strong and trusted relationship between publisher and consumer. Publishers are also experiencing churn improvement according to Piano, a digital analytics company. Piano’s data analysis shows that U.S. publishers’ churn rate is flat and European publishers’ churn rate declined 34%.
Unfortunately, increased media usage alone does not equate to increased revenue. However, an engaged audience, producing less churn, can help direct a path to subscriptions, new product launches, and other monetization opportunities.
Getting back to normal
Even amidst the ongoing pandemic, consumers are trying to return to some sense of normal. According to a GlobalWebIndex (GWI) survey of more than 17,000 internet users in 20 countries, consumers no longer want to see Covid-related ad messaging. Further, Pew Research reports that 71% of US consumers say they need to take a break from news about the coronavirus. A full 43% report that news leaves them emotionally drained. Consumers are seeking out new content as a pathway to escapism.
Without a doubt, the pandemic has profoundly impacted consumer media habits. The increase in content consumption and subscriptions, cannot be taken for granted. Consumer boredom and discretionary income can easily change given today’s social and economic vulnerabilities. By renewing their audience-first strategy allows publishers will be able to focus on avenues for new revenue.
Digital publishing revenue declined 2.3% year over year against Q1 2019, according to the latest quarterly Digital Publishers Revenue Index (DPRI) from the Association of Online Publishers (AOP) and Deloitte. During the first three months of the year, income from subscriptions experienced strong growth of almost 20%. However, display and recruiting advertising both suffered significant declines, falling by 22.5% and 12.8% respectively in Q1 2020.
Diversification
Publisher revenue diversification efforts helped offset the ongoing decline in digital ad revenue for publishers, as the duopoly continues to account for the vast majority of growth in this sector. This decline was, of course, intensified by the pandemic.
On a 12-month rolling basis, subscriptions and miscellaneous revenues performed strongly, growing by 18.8% and 25.9% respectively. Online video revenue grew by 10.7% and sponsorship experienced a slight increase of 3.2%. Growth in these areas however failed to offset the substantial reduction in revenue from display advertising formats — down by 17.1% year-over-year. Overall, digital revenue fell by 4.0% on a 12-month rolling basis.
Despite downturns across multiple revenue areas, the B2B sector was able to maintain revenue by growing sponsorship (10.9%), online video (10.6%) and subscription (2.3%) income.
Priorities
A growing number of AOP board members reported prioritizing non-advertising revenue growth and cost reduction strategies. According to the DPRI, almost 90% of publishers cited non-advertising revenue growth as a high priority for the next 12 months, up from 78% who said the same in Q2 2019. Meanwhile, 78% of publishers identified cost reduction as a high priority for the next 12 months, up from 44% who were focusing on this area in Q2 2019. None of the publishers surveyed reported seeing expansion by acquisition as a strategic priority over the next 12 months, reflecting their need to focus on existing business operations.
As Richard Reeves, Managing Director, AOP, commented, “Ten years ago, display advertising made up 58% of digital publisher revenue and subscriptions only 7%. Subscriptions now account for 22% of total revenue; with display advertising having shrunk to 42%. As income from display continues to decline, the shift towards subscriptions and other diverse revenue sources is only set to grow, accelerated in part by the pandemic. The publishers that adapt to this change will be the ones that have the most to gain when the storm passes.”
It’s a familiar scenario. One of the big ad tech players announces a change and we are all left to interpret what exactly it means. The only certainty is that it will take some effort to understand the full picture, the driving force behind it, and a plan of action.
As the big players quickly and quietly expanded their walled garden ecosystems, many publishers found themselves left without a key. We all know these big players own most of the market share and also dominate most of the growth as well. By the end of 2020, it’s predicted that nearly 70% of US digital ad dollars will be spent with Amazon, Facebook or Google.
However, publishers do have options for regaining control, especially when it comes to new growth areas like connected TV (CTV). Even before Covid-19 drove consumers to CTV and streaming in record numbers, 2019 saw a 330% rise in programmatic OTT/CTV ad transactions with CTV market advertising spend in the US valued at $6.94B last year. As you begin to build out your CTV strategy, it’s important to learn from the lessons of the past to avoid making the same mistakes.
Own your audience relationships
Distribution and tech partnerships often begin with great promise. When Apple introduced their Newsstand offering, it was positioned as a lucrative way to expand subscriber reach on iOS devices. Once Apple announced they would only allow single issue sales and began acting as an intermediary by keeping the subscriber data collected on their platform, the need for a business model more balanced with publisher needs became evident.
Nothing is more important than your audience and the ability to maintain control over the close audience relationships you cultivate. Effectively identifying these loyal audience segments and estimating user lifetime value is the foundation of a successful strategy. If you’re not working with an independent tech provider, it’s important to consider the potential implications and potential risks of partnering with a competitor or potential competitor and what impact that might have on your audience relationships.
Control and leverage your data
Your data is a key asset in your private garden. Controlling who gets in and what goes out is especially important as GDPR, TCF, and CCPA come into full effect. These changes have immediate impact on your revenue, but also secondary costs from the business model adjustments needed when third-party cookies are disabled.
Niche targeting, personalization, and frequency capping all depend on transparency and insights derived from data. Controlling and fully understanding your data makes it possible to hone your monetization strategy and create innovative opportunities for advertisers. When others have control over your data, it becomes more challenging.
For example, concerns have been raised around Google’s proposed TURTLEDOVE solution and its less frequent reporting structure. This poses a big challenge around leveraging data to fully optimize and capture revenue. As publisher first-party data becomes increasingly valuable and offers more monetization opportunities, it’s important to consider whether your provider is data neutral or more interested in harvesting your data.
Control your infrastructure
Make sure you are the one in charge of all the tech decisions in your private garden. In a technologically nuanced space like CTV look for partners that provide the expertise and infrastructure needed to ensure data protections, but also allow you to maintain control. Be wary of partnering with players who are also competing for your audience’s attention. And ensure that you will have enough flexibility in customization and business rules.
When Google first acquired DoubleClick back in 2008, they promised it would offer publishers more tools, enhanced productivity and additional revenue while freeing up resources to allow publishers to focus more on building and maintaining a web presence. In reality, it was one of the first deals that helped Google establish dominance and affect changes in customization and control that continue to ripple through the entire industry. Again, be very careful with who you let into your private garden.
Diversify your revenue
The end of third-party cookies means short-term revenue losses are likely. Many publishers have already begun exploring ways to diversify their revenue streams. Meredith is a great example of strategically embracing data management and ownership. The launch of their Data Studio and e-commerce sites connected back to their brands has helped optimize revenue streams.
Engaging loyal audience segments through registrations and subscriptions is another strategy that many of you have begun to embrace. Build upon existing successes like The New York Times has done with the introduction of their stand alone NY Times Crosswords and NY Times Cooking offerings. This is another avenue for strengthening audience relationships while building more robust first-party data.
This industry shift towards CTV offers another consideration for diversification. It also provides a prime opportunity to take back control and build your own private garden. Learn from the past in order to make careful choices around who you partner with and how you protect your investments from the start. This will give you the key to your own private garden and bring success in expanding into new growth areas.
Many media companies have turned to virtual events as a way to engage audiences on a personal level during the pandemic. From webinars to virtual festivals, teams have worked to evolve their offerings as the long-term outlook for physical events remains uncertain.
The Financial Times, The Atlantic, and Bloomberg, are among media companies that produce events as one of their diversified revenue streams. They are also among those that have had to evolve their revenue strategy as their teams hit their stride with virtual events.
Maturing virtual events strategies
In March, FT Live went from being completely focused on physical events to virtual in just days. As a test, they launched The Global Economic Emergency webinar. And with just three days of promotion, they racked up over 7,000 attendees who logged in to watch.
“We had these huge numbers, and it was a bit of a lightbulb moment for us,” explained Orson Francescone, the Managing Director of FT Live. “We quickly realized that we could do something bigger and bolder.”
Weeks later, the company launched The Global Boardroom. The three-day event featured 110 remote speakers and boasted 52,000 registrations. The event focused on the impact of coronavirus on policy, business, and finance. And it was so popular that a second edition is scheduled for November.
The Atlantic has seen similar success with online registrants, with over 20,000 attendees attending their 28 virtual events. “It’s a larger audience than we would have been able to convene in person,” said Aretae Wyler, COO of The Atlantic. “It’s more international, and we’re seeing the same caliber of attendees.”
Bloomberg faced a different challenge with virtual events, as they already had an established Bloomberg TV offering. For them, it wasn’t a matter of a pivot to video. Rather, it was creating a distinct experience and value proposition for a new offering. This meant the focus for its virtual events had to be on the level of interaction attendees could have, and what the value would be for sponsors.
“Once we got crisp on these elements…what we needed from a platform, resource, and process perspective became self-evident,” Bloomberg Live’s Global Head Patrick Garrigan explained. “Not only are our audiences tuning in, they’re staying with us and engaging.”
The value for sponsors
For Bloomberg Live, attracting sponsors came down to the basics of why clients support events in-person. “We distil it down to three core attributes: thought leadership, brand awareness, and content creation and amplification,” said Garrigan. “Similar to in-person, it then becomes a matter of identifying how our platform can deliver on these metrics.”
Bloomberg delivers this by creating sponsor “moments” throughout its virtual programs, as well as allowing sponsors to share the perspectives of their senior leaders. They then share segments from the events widely across Bloomberg channels.
For the FT, it is their technology stack – as well as their access to large global audiences – that has been a key selling point for sponsors. Early on, the team focused on ensuring they had a strong analytics functionality in place.
“We can analyze who is attending, what stage of the event, how they are engaging, and serve this intelligence to our sponsors,” Francescone outlined. “Sponsors really enjoy our platform because it’s giving them, from an ROI point of view, much bigger and more detailed numbers than in a physical environment.”
Big numbers are also a draw for The Atlantic’s sponsors. The publisher is gearing up for The Atlantic Festival in September which will be entirely virtual, and free to attend. Whereas they would normally have 3,000 in-person attendees, the team is targeting between one and 2 million registrants for the virtual version.
Sponsor interest has grown as The Atlantic’s confidence in their model and ability to pull in high-caliber attendees. “Most of the sponsors that we have worked with in-person have been interested in trying this model with us,” said Wyler. “Part of that is the belief they have in our power to convene and engage audiences. We’ve maintained a 75% average watch time for our audience, which is pretty incredible.”
Reader revenue and data
When it comes to audience revenue, the FT is now charging delegates for all its events from autumn onwards. But for the second edition of its Global Boardroom event in November, FT Live is taking a freemium approach.
The event has three tiers of ticketing. First, they’ll offer a free pass which gives live access to talks, Q&As and polls. A $65 pass provides on-demand access to all talks and summary reports. The professional pass, at $385, adds 1-1 networking, exclusive access to extra sessions, and a business community area.
Beyond ticket sales, the FT sees long-term opportunities for the newly engaged data. “Of the 52,000 people we had attending The Global Boardroom, about 75% were completely new to us,” said Francescone. These attendees can be monetized not just through the event, but as part of the FT’s core subscription strategy.
The Atlantic also sees opportunity in bringing in new subscribers. “We are constantly thinking about how this can be a driver of subscription growth,” Wyler emphasized. “The benefit of virtual events is that it’s an opportunity to convene both the superfans, but also to introduce The Atlantic to new audiences.”
In previous years, tickets to the in-person Atlantic Festival have ranged from $50 to $975. However, registration to the virtual Festival in September this year is free. That said, there will be subscriber-only benefits like exclusive sessions and Q&A opportunities to bring value to existing subscribers and entice new joiners.
Bloomberg has historically not charged for its events. However, the exception is their Bloomberg Breakaway CEO membership community, where virtual events have been leveraged as part of the membership package.
“We’ve created content that is exclusively for members. It gives them the tools, best practices, and essential feedback to grapple with the issues that are impacting business,” said Garrigan, highlighting the opportunity to provide another touchpoint to members through virtual events.
The future of virtual business events
Garrigan sees virtual events being a part of Bloomberg Live’s programming for the foreseeable future. “Given Bloomberg Media’s global footprint, virtual events are such a natural fit,” he said. “While we are incredibly eager to get back to in-person events as soon as it’s safe to do so…[virtual events] serve as a way to connect broad geographies in real-time that may not be able to join us in-room.”
For FT Live, their early success gave the team the confidence to run events for the rest of the year in a digital form. But for 2021, they are being cautious. Francescone suspects that they will iterate towards a hybrid event model. However, details (such as access and pricing) are still to be determined.
“We’ve set up a small internal task force within FT Live which is examining what the future is going to look like,” he explained. “What people’s preferences might be today might not be the same not only in five years’ time, but in months or even weeks.”
These publishers may have the scale that makes it easier to convince top-tier sponsors to get on board, but there are lessons for publishers of all sizes. Virtual events offer a wider audience and higher engagement than in-person events, whether that be hundreds or thousands of attendees.
As for reader revenue, features like on-demand viewing or virtual networking can be sold as an add-on, or as a subscriber-only benefit. The key is being flexible in your offerings and understanding what your audience will respond to as the situation evolves.
Travel industry intelligence site Skift has become the latest publisher to put membership at the forefront of their business. CEO and founder Rafat Ali announced the launch of Skift Pro on Twitter, saying that “Skift is now officially a Subscription-First business information company.”
Skift is now officially a Subscription-First business information company…
— Rafat Ali, Media Operator & Dad (@rafat) July 1, 2020
Skift joins a growing number of publishers turning to reader revenue as a way to diversify revenue streams and mitigate the impact of the coronavirus pandemic on other aspects of the business like events and advertising.
We spoke to Skift co-founder and Chief Product Officer Jason Clampet about the details of the launch, how it sits alongside its other products, and why this is such an important shift for the niche travel publisher.
Laying the foundations
Skift Pro has been in the works for over a year. The publisher already has two existing subscription products: Skift Research, which does deep-dive reports, data and analysis on travel industry trends, and Skift Airline Weekly, a subscription product dedicated to aviation news and analysis. The two products were faring well. However, Skift had een eyeing examples from other B2B companies like Digiday and Business of Fashion, which made subscription models a more central part of their strategy to build business resilience.
The first task the team had to tackle before adding another subscription product into the mix was to bring everything into one payment platform. “We built our own database to store users and details about the payment process so that everything was seamlessly tied together,” Clampet explained. This meant that subscribers to multiple products would be able to manage their subscriptions in one place.
In the last week of February 2020, Clampet held a big team meeting where he walked everyone through Skift Pro. In particular, he told the team how excited they were to be launching it on March 16th. But March 11th would be Skift’s last day in the office.
“We decided not to launch Skift Pro at that point,” said Clampet, aware of the potential scale of lockdown disruption to the travel industry. “Instead, we did a Guardian-style contribution model. We said, “Hey, we’d love direct reader support. You can make a one time gift or a recurring gift.””
Spurred by the success of the contribution model, Skift then introduced a ‘Pay what you want’ model to their new online events and webinars, using the payment system they had built to support subscriptions the previous year. As the initial shockwaves of the pandemic settled, Skift Pro’s launch moved to the top of the agenda.
Membership benefits
Despite the initial delay, Skift’s decision to launch a membership product marks an important shift in the publisher’s relationship with its readers. Rather than simply adding another revenue stream into the mix, Skift Pro will help build business resilience and audience engagement, as well as strengthening their editorial work.
“It’s become a centerpiece of how we think about our readers and customers,” said Clampet. “Hopefully it’ll be a much more significant part of our revenue, but it’ll also allow us to tie things together better.”
Clampet believes that Skift Pro members will be more deeply engaged with the brand, from attending events to reading its analysis and reporting. In turn hopes that he and the team will be able to learn more about them. “It’s a way for us to have a better insight into who our users are, and then serve them better,” he explained.
This plays a key part in the presentation of Skift Pro as a membership product rather than a straightforward subscription. Skift Pro goes beyond just access to stories online. It includes additional content and events, as well as a custom newsletter which will start up in August, for $365 a year, or $1 a day.
“We want it to be more than just a newsletter in your mailbox every day. It’s about being actively engaged with other things beyond just reading,” Clampet said.
Launching in a pandemic
Following the delay, deciding when was a good time to finally launch Skift Pro was a subject of much internal discussion. Skift’s other major revenue streams are from its content studio, which works with travel brands to develop bespoke content for them, and its events. Both have suffered as a result of coronavirus, making reader revenue a more urgent consideration. But the travel industry as a whole is also under immense pressure, with many furloughed or laid off.
“It’s hard to know what is a good time right now for anything,” Clampet explained. “The reality of business is that direct from consumer revenue is vital to just about any media business.”
“We also know that the people who are still at companies in Europe and Asia, which is waking up again. They need actual information to do their jobs better and make smarter decisions. We’re still here providing that, so in that sense, it is a good time [to launch].”
A new route
Skift Pro may be live, but the team aren’t resting on their laurels. Clampet’s main goal for the membership is that people are really happy about their decision after signing up, and that is going to require some changes to the product as time goes on.
“The launch is just the very first phase for us. We need to be constantly evolving the product experience,” he emphasised. “What it is right now is going to be very different from what it is a year from now, and hopefully we’ll have made a lot of smart decisions.”
This is a very important lesson that other publishers with subscription or membership products can learn from. For Skift, the launch is not the end of the road. It’s the starting point of a product which will change and grow as they focus on the reader response, and how they can best serve those needs.
Subscription models have increased in popularity among growing numbers of publishers who are shifting their focus away from ad sales – and this trend has gained even more ground over the course of the Covid-19 pandemic.
Companies like BuzzFeed News and The Daily Beast have seen huge upticks in membership as a result, according to Digiday. In addition, publishers such as Gannett, The Washington Post, Time Magazine, and The Philadelphia Inquirer have amassed large coronavirus newsletter audiences—in some cases, twice the size of their regular lists.
“We’ve proven to ourselves that we can be far more agile with this product line,” Kim Fox, a product director at the Philadelphia Inquirer, told Digiday.
Subscription models have been wildly successful across a broad range of sectors. Publishers who pair this powerful strategy with their advertising revenue strategies will be most likely to weather the next wave of uncertainty to hit the media industry.
The future of media: advertising and paid subscriptions
Thanks to the massive amounts of data-driven transactions that occur on a daily basis, publishers and advertisers alike are better informed than ever before about their audiences’ behaviors and preferences. They now have the ability to create highly relevant and targeted advertising campaigns that maximize their budgets as well as their brands’ reach.
While advertising will continue to serve as a crucial revenue stream for publishers, subscriptions have proved their ability to act as a powerful complement to the ad sales model with exclusive, creative offerings that strengthen brand loyalty.
The subscription model has already prompted publishers to think outside the box of traditional advertising and explore partnerships like reward programs with brands. For example, U.K. publisher The Times runs a program called Times+ that features exclusive arts, culture, entertainment, and travel rewards from various corporate partners.
Subscriptions offer a win-win for publishers and their audiences because they give consumers the ability to choose the content they pay for, whether their interest is in current affairs, arts and culture, sports, or entertainment.
A longstanding tradition: selling content and ads
The business model of selling content as well as advertising isn’t new to the media industry. Newspapers have always charged newsstand prices, although they looked drastically different more than 100 years ago. In 1851, The New York Times’ first year of existence, a copy of the newspaper sold for 1 cent. It took nearly a century for the price to reach 5 cents in 1950, and by 1974, the price had increased to 20 cents.
Decades later, when the internet rocked the media industry and gave readers unprecedented access to news, there was great debate about whether it signaled the death of print media. Many news organizations didn’t survive the disruption. However, now that the industry has wrapped its head around the paywall system, publishers have been able to reinforce the monetary value of high-quality journalism.
Media companies are seeing the benefits of charging for content once again. For example, in 2019, News Corp Australia’s publications reached 500,000 paid digital subscribers. In the U.S., The New York Times reached 3.5 million paid digital subscribers that year.
“It shows more and more people are willing to pay more for our trusted, quality journalism,” Michael Miller, News Corp Australia’s executive chairman for Australasia, told NewsMediaWorks. “Premium content that resonates with our expanding audiences…is what will drive our long-term success.”
Although it’s a delicate balance, publishers can successfully sell both content and advertising by putting two important measures in place. First, publishers must ensure that ad placements don’t become too unwieldy, as to not alienate paid subscribers. They must also keep the cost of subscriptions reasonable to maintain substantial audience numbers worthy of attracting advertisers.
How combined revenue models drive success
Publishers who combine advertising and subscription models carefully are well positioned to reap significant rewards. This is especially true as first-party data becomes an increasingly essential commodity within the media industry in the face of growing data privacy regulations.
Subscriptions provide publishers with rich first-party audience data. That becomes an attractive selling point for advertisers seeking to maximize their investment in a contextually relevant and brand safe environment.
“Publishers need to focus on what they do really well, which is produce content. They can do native [advertising] and commercialize contextual targeting,” Bedir Aydemir of News UK said at Lineup Systems’ user conference last fall.
McClatchy CEO Craig Forman agrees that context is key to advertisers’ success in the future. And media organizations—particularly local publishers—can harness this trend to help brands reach audiences in meaningful ways.
“What often you can’t find in the world of digital advertising is the adjacency…that makes your advertising important in context,” Forman told Digiday. “And at this time where local is the success story of the emergence, McClatchy and others are doing everything we can to partner with local brands to show them that the trusted environment of local news is where they need to be.”
“This particular display product utilizes the real-time messaging of a brand’s social posts and targets them to an audience in the right context. With a news environment that is changing so quickly, this allows brands to be more relevant with their voice,” chief revenue officer Joy Robins told The Drum.
As media organizations continue to innovate, combined revenue models that blend advertising and subscriptions will undoubtedly become even more powerful.
Digital publishers see rays of hope as they continue to monetize premium content, transform business strategies, maximize technology investments, and increase revenue diversification. Just over two-thirds (69%) of digital publishers expect to see an overall revenue growth in 2020 according to a new report, Publishers Bullish on Talent, Tech and Growth in 2020, from Folio. Of those publishers expecting revenue growth, a quarter anticipate double digits. Only 4% of participants expect revenues to decline. This research is based on 182 surveyed industry professionals accompanied by eight in-depth executive interviews.
Growth expectations
Respondents report the top three categories for revenue
growth are digital advertising including branded content (58%), live events
(43%), and marketing services (38%). In addition to revenue growth, audience
growth is also expected in 2020. Twenty-eight percent of publishers expect a
10% growth in audience while more than one-third (36%) expect single-digit
growth.
Audience development is more than just chasing clicks on digital platforms. It’s about learning your business ecosystem and how the pieces work together. Executives cite email (54%), social media (53%), and events (44%) as the strongest performers for audience development.
2020 priorities
Publishers recognize the need to invest in the video side (35%) of their business as well as back end technology and operation systems (34%) for content management and advertising businesses. Publishers, especially traditional magazine businesses, see video as a very lucrative way to reinvent their content strategy and distribution model with attractive advertising packages at high CPMs.
Executive interviews
Catherine Levene, President, Chief Digital Officer of Meredith Corporation, participated in Folio’s executive interviews. Meredith charted its course in preparation for 2020. Levene said Meredith is keenly focused is on innovation. This includes technology investments, including a new content management system and a first-party data and insights platform.
She also mentioned Meredith’s investments in video
production and distribution and new content-to-commerce capabilities. Levene sees
a win-win for their audience and advertisers, “We are creating content and
experiences that drive engagement and are offering predictive advertising that
achieves results for our marketing partners.”
Erin O’Mara, President of The Nation, also participated in the executive interviews. O’Mara described the digital business as more than just a website, it’s about super-serving the audience. A new initiative, “The Nation Classroom,” uses their archives to create robust teaching modules for high school student. The goal for this project is to be profitable as well as to make available to schools that cannot afford it. O’Mara see this initiative as an important step to extend a brand experience through community outreach.
As Folio’s research suggests, there is no time digital media
brands to standstill. It’s essential for media companies to take the steps to identify
the key business and audience strategies and investment in them.
At
the dawn of the new decade of 2020, DCN members gathered at the Mandarin
Oriental Miami January 16 and 17 to network, discuss victories and challenges
as media companies evolve, and explore industry predictions.
The
new decade calls for a perfect ‘20/20’ vision, said Jason Kint, CEO, Digital
Content Next as he kicked off the closed-door, off-the-record gathering. That
encompasses continued focus on audience desires, pushback against the myth that
all content has to be free, and the elevation of trust and transparency in an
era marked by ‘fake news’.
The European
Union’s recently enacted copyright law is a win for the industry, with similar
discussions expected this year in the U.S, noted Kint. Federal and state
investigations as well as emerging regulations are all good signals toward protecting
consumer privacy, regulating data use and anti-trust concerns, notes Kint.
We
can also expect a steady rise in content investments. UBS estimates that in
2020, a combined 16 media firms will spend $100 billion to produce content.
More than $35 billion will allocated on streaming video content, as new players
such as Disney Plus and NBC’s Peacock emerge.
“I’m
feeling really good this year about where things are headed,” said Kint.
Platforms
and policy
Jim Bankoff, CEO, Vox Media said he valued being at the DCN Summit. He described it as a place where premium publishers come together to “find ways to partner and to check our healthy, competitive impulses … and figure out ways to work together” in the wake of ceding ground to third party big tech platform and ad network “that have proven time and again not to have our best interests in mind.”
Investigative journalist Carole Cadwalladr
Investigative
journalist Carole Cadwalladr, who freelances for the Guardian and Observer,
captivated the audience by recounting her experiences unearthing the activities
of Cambridge Analytica and Facebook. She was nominated for a Pulitzer Prize for
her work, which sparked international investigations as well as inspiring the
Netflix documentary, ‘The Great Hack’.
“This
was my introduction to this world of creepy disinformation, but also complete
reluctance from the platforms to even acknowledge the problem, let alone deal
with it,” she noted. She was instead subjected to legal pushback from Google
and Facebook as well as online bullying.
She
also called for media companies to not compete against each other. Instead, she
encouraged those in the room to join together to “compete against lies and
falsehoods. We’ve seen it in Britain and you’re next,” said Cadwalladr.
Monopolies
Scott
Galloway, professor, NYU Stern School of Business, said
he believes that the big tech companies on the antitrust radar should be
broken up. Monopolies kill economic growth and are a “key step to tyranny,” he
contended, adding a co-opted government can’t serve as a dominating force for
protection.
Galloway
pointed out that efforts to regulate the behavior of big tech fines have been
largely ineffectual. To date, the fines haven’t been punitive enough to
dissuade the big tech companies to modify behavior, he said. He also criticized
the federal government for being slow to act.
Money
matters
Monetization and concerns about subscription fatigue were recurring themes at the summit. Yet DCN research shows that younger audiences in particular appreciate the value of a subscription and finds that there is still consumer appetite for subscription products.
Jonah Peretti, founder and CEO of Buzzfeed
Jonah
Peretti, founder and CEO, Buzzfeed noted that over the course of a few short
years, the company has begun to generate significant revenue from Facebook,
Google, Amazon, and Netflix from licensing.
“I
don’t think Facebook or Google wants to buy news companies,” said Peretti. Of
the platforms movement toward paying for content, he said that “They get the
benefit of sharing some of the costs of the production of that content. News is
a great way to direct repeat visitors and to build trust in the platform to
avoid some of the problems of misinformation.”
Media
shifts
Kevin
Turpin II, president, National Journal, noted his longstanding publication adapted
to the changing media landscape by transforming itself from a media company to government
research and consulting services company for which subscribers are willing to
pay premium prices.
Jim
VandeHei, co-founder and CEO, Axios; Executive Producer, AXIOS on HBO said, “you
have to deliver content in a way that I would deliver in a conversation with
you over a drink, like what is new.” However, to create value, “Tell me why it
matters. Give me some context. Give me the power to go deeper.”
For
Complex, the path to success hasn’t been simple. Rich Antoniello, CEO and founder,
Complex Networks said, “we call ourselves a brand that happens to monetize
through media.” He said his company shifted from an ad-dependent model in 2016,
ahead of the curve.
One
example is the wild success of its “Hot Ones” program. It features10 questions
of its celebrity guests that get progressively more personal along with the consumption
of hot sauce that gets progressively hotter. And the business model is based
not on advertising, but on the sales of high-margin hot sauce.
Antoniello
also outlined the success of ComplexCon, the company’s flagship event, which connects
cultural icons with fans who spend $100 to $700 for VIP tickets, with hundreds
of thousands sold. Fans also snap up merchandise from Complex and its app-based
vendors such as Nike and Adidas.
The
power of fandom arose again when Howard Mittman, CEO, Bleacher Report spoke of
how his company’s app and successful franchises attract sports fans. He
described how individual athletes hold more sway in their fandom habits than sports
franchises.
Nearly
10 million fans have signed up for alerts and the app accounts for half of the
company’s user engagement. Bleacher Report’s focus is not on breaking sports
news, but creating engagement on its own platforms, according to Mittman.
Her
story
Media
continues to go through cultural shifts toward diversity both in company
staffing and in targeting readership such as women. “Women are generally not
seeing themselves in media and advertising to the extent that they should be,”
said Catherine Levene, president, chief digital officer, Meredith National
Media Group.
“We
have been the first to support #SeeHer, a national organization committed to
accurate representation of women in media and advertising,” she said. She added
that’s not only good for supporting women, but also for the bottom line. Women
who see themselves in media and advertising are 45% more likely to recommend a product
to a friend and purchase it, said Levene.
Elise Loehnen, chief content officer, Goop
Despite
the controversy it has attracted by those who question the veracity of its
science, Gwyneth Paltrow’s Goop brand is growing, noted Elise Loehnen, chief
content officer. The platform embraces several media forms and covers topics
from relationships to health, including alternative therapies. She said that
the controversy has been good for keeping the brand at the forefront of popular
discussions.
“We’re
tired of being talked down to,” said Loehnen. “We’re a strong female brand
undisturbed by the chaos.”
Adapt
or die
Rishad
Tobaccowala, chief growth officer, Publicis Group,noted that the only
way to get ahead as a legacy company is to “kill your core. You have to rethink
your entire business.”
Levene from Meredith believes that the mobile world and 5G will create an even greater market for video. And, with 50% of searches conducted on the more than 200 million voice-enabled devices in U.S. homes, opportunities and challenges will arise.
Google’s
action to purge third-party cookies against the backdrop of GDPR and CCPA will
impact the entire digital ecosystem, Levene noted.
“Data
is going to be the currency of the future. Those who have it at scale and the
ability to drive a lot of insights from it are going to win,” she added.
Kindness
matters
In a social media environment that is being blamed for everything from decreasing personal contact to radicalizing disaffected youth and intensifying suicide rates among girls, Tatyana Mamut, head of product, Nextdoor, made the case that her platform is creating connections on a micro-level in a neighborhood at a time when people hardly know their neighbors
“I
believe that kindness is the next big thing in tech,” she added.
Palo
Alto journalism educator Esther Wojcicki made the case that helicopter
parenting has impacted the workforce and its ability to embrace risk and
innovation. She calls for parenting – and management – to embrace trust,
respect, independence, collaboration and kindness. She also promotes the idea
that every student should take a journalism course to build media literacy skills.
The
future will be fraught with change. And as Tobaccowala pointed out, “human
beings know how difficult change is.” But to survive, media companies must
continue to evolve.
“We
have the power to shape minds and hearts, to fill the world with laughter and
tears to inform the truth,” said Kint. “Here’s to 2020 bringing the roar of the
crowd as we focus on what matters most: the audiences we serve.”
Mobile and social media received a lot of attention this last decade. Major media trends included fragmented attention, intermediated media, and growing distrust in journalism. So, what will the next 10 years present? The Reuters Institute once again looks at our past and evaluates emerging trends to forecast what’s ahead in media in its report, Journalism, Media, and Technology Trends and Predictions 2020. Overarching themes for digital media in the next decade center on internet regulation, the re-establishment of trust in journalism, and creating a closer connection with the audience.
In addition, the report includes key trends and predictions for 2020 (see full report for the entire list).
1. The media business looks good; journalism less so.
The media business has a positive outlook but not so for journalism itself. While media executives feel confident or very confident about their company’s prospects in 2020, they feel less so about journalism in general. Their confidence for the media business centers on reader revenue and paid content, stable and growing income while advertising remains unstable. Further, the media business looks strong while consolidation is expected to continue. The latest in consolidation is a focus on keeping the editorial voice of the brands acquired while integrating back-end tech and data systems.
2. Digital
leaders have mixed reviews for platforms.
Those surveyed are more positive about Google and Twitter than Apple, Facebook, Snapchat, and Amazon when it comes to initiatives to support journalism. Sixty percent of respondents rated Google as average or better while the other platforms were less favorable (it’s important to note that many publishers surveyed are currently or past recipients of Google innovation funds).
The overall sentiment from publishers regarding platforms is they want a level playing field where they can compete fairly and get proper compensation for their content and its value. Publishers in the EU are trying new intervention tactics to address these companies dominance. One example is the EU’s new copyright directive, aka the link tax. This policy requires platforms to pay for unlicensed content that appears in aggregated news services. France is the first member state to carry out the directive. Google reacted with displaying less content rather than pay. Courts will be deciding the next actions.
3. Reader revenue is a major focus for the new decade.
Executives believe reader revenue offers stable and growing income for news publishers. Half of those surveyed report that reader revenue is the most important revenue stream going forward. Subscriptions and memberships help publishers access reader information. In fact, many publishers rely on consumers login to their services for first party data. With new data tracking regulation in play and opt out ad-tracking browsers, publishers need to entice readers to register and login.
4. Audience growth, better
measurement and ease of access will continue the growth of podcasts.
By 2021, US podcasting revenue is projected to grow by approximately 30% a year to reach over $1 billion. New formats are being explored from the recognized interview and chat format to new documentary formats.
Bigger audiences, better measurement, and easier access have combined to change the economics of podcasting. This is encouraging publishers to invest in creating more quality content and platforms to invest in better distribution and monetization.
Overall, the report finds that digital publishers seek to diversify
revenue and strengthen user engagement with multiple touchpoints and products
in the decade ahead. Newsroom have the added challenge of modernizing their
presentation without compromising quality and trust and receiving proper
compensation from the intermediates. While many industry challenges continue,
publishers are well positioned to tackle these issues.
