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Revenue

The Secret to Harvard Business Review’s Subscription Success: Its Customers

Want people to pay for your content? It’s simple: Get to know their needs, and create content experiences that meet them. That may sound simple but as Harvard Business Review’s (HBR) success shows, it takes a lot of work to get it right.

Josh Macht, Harvard Business Review Group Publisher, describes their process as an on-going conversation with customers. These days, that means finding multiple ways to interact with not only HBR’s 285,500 paying subscribers, but also the 5 million people in its database. These interactions take place through live events, in-depth querying of the 19k members of its advisory group, and a significant investment in analytics. Macht says HBR has become “increasingly scientific with data and analytics on the backend” but that all of these approaches in tandem are what provides them with the ability to design products users not only want—but are willing to pay for.

Vice President of Marketing Sarah McConville describes it as a Venn diagram where the ideal subscription offer is conceived of at the intersection of content, format and audience. “Obviously, it all starts with producing high quality content that our readers find valuable and we are always thinking about how we can continue to stay on the cutting edge of business research and thought,” she says. McConville also points out the many ways that HBR has expanded their format over the past five years—from its redesigned website, to a magazine redesign that’s in the works, as well as its print and ebooks, digital tools and events. Emphasizing the role that audience understanding plays in the company’s subscription strategy, she also notes HBR’s “significant investment in understanding our readers through audience research, website and social behavior analytics, and targeted discrete research.”

HBRvisuallibrary_1The clearest example of both the product development and subscription strategy emerging from this process is HBR’s Visual Library, which made its official debut in June. It allows paid subscribers to access a continually expanding collection of HBR’s charts, infographics, and fully customizable slide decks. The product came about after customer research revealed how many users rely on HBR information for their own presentations and the value of making that process easier for them. Both the research and new offering have paid off: On the day the Visual Library was announced (via its 5-million strong database), it became the second most trafficked page on the site, almost immediately triggering renewals by a slew of previous subscribers who had not yet re-upped. And the Visual Library generated more than buzz and renewals; it brought in new subscribers at an increased subscription price.

“What we’re trying to do is not take the approach of ‘add more, pay more,’” says McConville. “Instead, we try to find the right combination of elements that justifies a higher price.” She points out that as the print-to-digital migration has evolved, we’ve seen readers go from a wiliness to pay for, say, a tablet edition in addition to print to “merging the value of digital and print together.” To charge a premium, she says today’s content consumers demand more than format, they need tools that allow them to leverage the content in ways that “save them time and gives them confidence.”

Macht recognizes that, given the media industry’s increasing concern over the volatility of the advertising market, a wide range of publications are considering subscription offerings. However he also identifies a significant hurdle standing in the way of their success: “Though they say they want to get into the subscription business, they are still in the ad business. A dual focus is really difficult to support.” Unfortunately, many of the underlying requirements in driving the views necessary to support an ad-supported model run counter to those of developing a robust subscription business.

Macht knows firsthand how challenging these internal cultural shifts can be, pointing out that “way back when I first joined, we needed to open up the funnel, but the DNA of the organization was ‘we sell everything so we can’t give it away.’ But we didn’t have a pulse on the web.”  Years later HBR is flourishing online both at its site, which boasts 5 million visitors a month, and through its 6 million social media fans and followers. This year’s new website design was accompanied by a redesigned freemium model. Now anonymous users can access five free articles a month, and if they register—making them a more highly addressable audience—they can access up to 15. HBR has also opened up the site content and toolset to those registered users for July and August, which has already doubled the daily average of people registering.

Then the process of getting to know these recently registered people to subscribe begins in earnest. And that, as Macht and McConville will affirm, is not just about conversion, it’s about an ongoing conversation.

Perspectives

Lessons from the Community Revolts at Reddit, Gawker

A volcano erupted earlier this month after Reddit, the 10-year-old “front page of the Internet,” abruptly fired its popular director of communications Victoria Taylor. More than 265 subreddits went dark in protest for 24 hours, and a letter asking for the dismissal of then-interim CEO Ellen Pao garnered more than 200,000 signatures (Reddit itself has 200 million regular visitors). Pao stepped down from her position within days, citing the fact that Reddit’s board had asked her to amass a higher user growth for the site in the next six months — a task she wrote is more than she believes she can deliver “while maintaining Reddit’s core principles.”

Gawker found itself in a somewhat similar reader revolt when one of its stories outed the CFO of Conde Nast— a married man not already in the public spotlight. Gawker has always pushed the envelope about publishing controversial material, but the collective gasp and outrage the post provoked showed that some truths are not meant for public consumption. The post was taken down, and two of Gawker’s top editors later resigned.

The situations show what happens when a website that is both a community and a growing business try to negotiate the principles of both within one entity. Publishers especially have to take note on how audience demands might steer a business strategy — and potentially disrupt a monetization scheme.

Reddit Balances Business, Community
The question of what constitutes free speech and openness on Reddit is changing as the website makes moves to grow. Reddit was bought by Conde Nast in 2006, but eventually became an independent entity with Advance Publications as the largest shareholder. It raised $50 million in venture capital last year and is putting an emphasis on mobile offerings and advertising sales. Reddit is ad-supported, and those ads are driven in part by its community.

“Links that grow popular on the site often drive a surge of traffic elsewhere online,” according to a 2014 article in the New York Times. “The activity has caught the attention of brands eager to show ads to large, enthusiastic audiences.”

Questions of whether certain posts might scare off some brands and advertisers have lingered as Reddit pursues advertising more aggressively. Not-safe-for-work material and subreddits that effectively amounted to hate, vitriol and shaming have always been controversial, and is the reason behind the banning of certain subreddits this spring and a new code of conduct. As some Reddit users struggle with what caps on openness might mean for the site, trying to maintain its ethos also puts Reddit at an unusual spot in the industry: Reddit refuses to collect users’ personal information, which would help in targeted advertising.

Still, the money coming into Reddit from venture capital and other investments might be a little much for its unpaid volunteers negotiating with new rules meant to “legislate the hate away,” as Sam Altman, a Reddit board member who led the $50 million fundraising effort last year, put it.

Gawker Limits
The Gawker brouhaha, meanwhile, shows how the demands and reactions of a readership might conflict with a desire for traffic and controversy at all costs.

“The media environment has changed, our readers have changed, and I have changed,” Gawker founder Nick Denton wrote, explaining the takedown of its post after the strong reactions it elicited.

But according to one of the editors who resigned, money was also at stake — “companies had threatened to withdraw advertising from the site because of the article,” the New York Times reported.

Maintaining open communication, listening to investors and audiences, and keeping your word are among the lessons for organizations like Gawker and Reddit, which are hitting a mid-life crisis of sorts as they mature. But these lessons point to the bigger issues at play: Balancing business needs and those of the community. After all, as Denton wrote himself, the aims of an organization evolve alongside the media and community environment surrounding it. Growing pains are inevitable. And it’s a true turning point when Denton – who has a history of publishing first, asking questions later – backs down to pressure.

Perspectives Image
Perspectives

DCN’s Recommended Reading: Week of July 23, 2015

Our picks of this week’s must reads from around the web: 

 

 

Advertising | Industry-Research

U.S. Programmatic Display Ad Revenues Totaled $10.1 Billion in 2014

Programmatic buying and selling of online display-related advertising generated $10.1 billion in 2014, comprising 20% of last year’s overall internet advertising revenues ($49.5 billion) according to the first-ever IAB Programmatic Revenue Report, prepared by PwC US. This figure represents approximately 52% of display-related advertising in 2014 ($19.6 billion), while non-programmatic display-related revenues accounted for the remaining 48% at $9.4 billion.

programvnonAs David Silverman, Emerging Company Services Practice Co-Leader of PwC, points out in the report, “over the last several years, publishers and advertisers have continued to adopt programmatic buying and selling of digital inventory into their media strategies; however, within the complex programmatic ecosystem there has been a lack of consensus around the definition of programmatic and its associated types and formats and the size of the programmatic market in comparison with the overall internet advertising market.”

For the purpose of this study, programmatic was defined, but not universally accepted, as “machine based buying and selling of digital media including auction based methods like RTB and private marketplaces as well as the automation of direct sales, sometimes called programmatic direct.”

pubvadtechHighlights from the IAB report include:

  • Open auctions made up approximately 70% of the programmatic revenue in 2014.
  • Display banner ads made up approximately 80% of programmatic revenues in 2014, but the findings demonstrate that mobile and video formats will take more of advertiser and publisher budgets and inventory over time
  • Ad tech revenues represented approximately 55% of the programmatic revenue pie in 2014 and approximately 45% of programmatic revenues ultimately found its way to the publishers.
  • The majority of programmatic inventory was bought and sold through Open Auctions, but the report predicts a shift to other types (i.e. Private Auction, Unreserved Fixed Rate or Automated Guaranteed) in the next few years.
  • Programmatic revenues from ad tech outweighed those from publishers in 2014.
  • Programmatic buying and selling are moving forward; however, sizing the programmatic industry will continue to be a challenge until standardization and increased transparency become more apparent.
Innovation

Challenging Problems and Creative Solutions Emerge at Collab/Space New York

Media Shift’s Collab/Space is a different kind of conference. While a couple of keynote speakers punctuated the day, this event is all about solving problems—and a little bit of improv. The July 15, 2015 Collab/Space New York event—sponsored by the Reynolds Journalism Institute—took place at the Ford Foundation in Manhattan, and focused on “Intrapreneurial Innovation.” People working to get new projects off the ground or effect change at organizations as diverse as Mother Jones, UNHCR, and BBC.com International came out to talk about their projects and get feedback from the industry veterans in the audience. It was clear by the end of the day that media companies of all shapes and sizes are struggling with many of the same problems. In other words, “You’re not alone.”

Cory Haik, executive producer and senior editor, digital news, The Washington Post
Cory Haik, executive producer and senior editor, digital news, The Washington Post

Post-Print Strategy
Cory Haik, executive producer and senior editor, digital news, at The Washington Post was the morning keynote, and represented an interesting crossroads in the media industry. The Washington Post—bought by Amazon.com founder Jeff Bezos about two years ago—is a legacy media organization known for its top-notch journalism. And now it is in the somewhat enviable position of being owned by someone who not only “gets” digital, but is willing to put resources behind it.

Haik was given a relatively straight-forward task: build a tablet app. But she got one other instruction that not many newspapers—forever protective of their legacy models—would have given to a development team. Haik had to build an app that would have readers reaching for the tablet instead of the print product when given a choice.

The app, which comes pre-installed on Amazon’s Fire tablets, but also available for other devices, is free to Fire users for the first six months, meaning The Post app was also responsible for reaching an entirely new audience. Her team started with this idea: “Digital browsing isn’t easy…but it could be.” They worked to figuring out what worked in the print experience—after all Haik says, “From a product perspective, it’s 130 years old, it’s perfected.”—and move it to the tablet.

Browsability became the key to making a better tablet experience, and The Post opted for a two column experience—keeping the interface simple while still allowing users to scroll through the columns to browse content. It also publishes in two editions at 5 a.m. and 5 p.m. This keeps the content fresh, while also staying in line with what The Post knows about its app users, which is that they read in the morning and in the evening.

One of the other things that sets The Washington Post app apart is just how much effort goes into it by actual humans. Instead of being driven by feeds, each story is designed by a person, who makes sure each image and video appears in the right place. Haik is happy with how the app has turned out. With a team of 21 people on the editorial side alone, though, the next step is figuring out how to integrate more closely with the production process so that the content is ready to be delivered across platforms without quite so much human intervention.

Problem Solving
With that success story in mind, “intrapreneurs” from eight different companies gave short presentations on the particular challenges of their projects, before attendees broke up into groups to help presenters come up with possible solutions to the problems.

For instance, I participated in the Climate Desk group, which is an off-shoot of Mother Jones and brings together climate change-related journalism from eight partners—including The Guardian, Slate, and The Atlantic—and creates original content. All content is shared among the partners. At the end of Climate Desk editor James West’s presentation three challenges were identified:

  • providing valued added to it partners beyond content-sharing
  • using technology to add to its offerings
  • defining a mission beyond simple content aggregation and creation

There were seven other groups, several of which focused on helping media outlets tackle homepage redesign challenges. While many of the issues at the heart of each presenter’s challenge were universal to all publishers—think engagement, multi-platform implementation, and even simple adoption challenges—each one took its own unique shape. After an hour or so of brainstorming, the groups came back together for another keynote speech from Sree Sreenivasan’s, chief digital officer at the metropolitan Museum of Art, and finally presented the solutions each group had defined.

Whether presenters went home with concrete solutions that they can implement in the weeks and months to come is hard to say. However, it was clear that the creative juices were flowing, and audience participants got as much from helping other publishers tackle their problems as the presenters got from having a free team of industry professionals brainstorm to solve the kinds of challenges that are all to familiar to many of us.

Theresa Cramer is the editor of EContent magazine and Intranets newsletter. She is a 10 year veteran of the publishing industry with a background in both newspaper and book publishing. Follow her on Twitter @Cramerstrasse.

Revenue

Interview with Robbie Kellman Baxter—author of The Membership Economy

A decade ago, DCN’s Editorial Director, Michelle Manafy, wrote an article about American Express’s campaigns around membership and how they used the concept of “membership” to create a clear value proposition. Having coined the business term “Membership Economy,” Robbie Kellman Baxter found a kindred spirit in Michelle. And, during a recent conversation, the two covered a broad range of topics, some of which we hope will be useful to the members of our community. Here are a few highlights from that discussion:

Please define “the membership economy” and describe how it differs from the sorts of subscription models used by the media for decades:

The Membership Economy is a massive new trend that is transforming virtually every major business sector, including media. It’s about access over ownership, relationships over transactions and community with multidirectional communication as more important than one-way push communication.

Subscriptions are a pricing decision; Membership is about the mindset of the organization.

Describe “the forever transaction” and “lifetime customer”:

7stepmembershipIn the Membership Economy, the transaction is the starting line, not the finish line, and it’s a forever transaction. What we mean by this is that at the moment a customer conducts the initial transaction with an organization, their plan is to stay forever, or at least until that organization no longer provides the promised value or that value is no longer needed. Organizations often focus on lifetime customer value, but they should be focusing on lifetime value to the customer, instead of just the lifetime value of the customer.

The question is, what is your promise to your customers? If they are looking to you as a source of news, for example, the promise is much bigger than “a daily newspaper”. It could be access to an event featuring a foreign correspondent, or a bundle for arts lovers that includes a subscription to Spotify, or the ability to share thoughts about specific trending topics with fellow readers. The idea is to focus on the mission as more important than the products.

With the “commoditization” of media, how can the concept of membership offer new insights/ models that media companies can apply to stand out, attract and retain customers?

In Membership businesses, specific products and services often become commoditized over time. Organizations need to expect this to happen and be prepared to continue to evolve to keep ahead. What can be protected today is tomorrow’s commodity. For example, professional associations have long provided directories as a key value. Today, LinkedIn makes nearly all professional directories commodities. Newspapers used to have access to the very expensive and relatively rare channel for distribution—printing presses and delivery guys. Now, with the internet, distribution is no longer the differentiator it once was. Organizations need to constantly re-evalute how to provide differentiated value to their members that can’t be accessed elsewhere.

For example, Pandora offers a unique experience for music discovery and enjoyment, but also invests in building a community among members, through its live town halls, logo-swag and culture committed to personalized responses to outreach by any member.

Where does “free” fit into the membership economy?

Not every organization should provide free stuff, but every organization should consider how free fits into their business model. Free can include both free trials, which are generally a “complete taste” of the offering for a finite period of time, as well as freemium, which is a free subscription, usually to a limited experience.

There are three reasons that free can make sense for an organization:

  1. When free drives awareness and trial (typically what media companies do—such as the New York Times’ free articles before hitting paywall)
  2. When there’s a network effect, meaning that each new free member drives value for each existing paying member (such as LinkedIn)
  3. When a viral effect, meaning free members become channels for new paying members (such as the situation in the early days of Hotmail, when free email users sent emails to people who later became paying subscribers)

There are some cases where none of these benefits accrue, so free isn’t always good, but it’s always worth considering.

Could you provide a couple of examples of “membership” strategies from other industries that could be applied to today’s digital media industry:

  • Expanding benefits to include access to unique events—Caesar’s Entertainment often invites their most profitable members to meet Celine Dion, Elton John and other stars as they prepare for their nightly shows.
  • Using segmentation and persona generation to identify pockets of customers that are pushing the envelope of their usage and willingness to pay, to inspire new offerings and subscription categories. For example, American Express continues to release different types of cards. All cards promise to “have your back” but after many years of moving upmarket, from green to gold to platinum to black, they are now introducing debit cards targeting the underbanked community.
  • Investing in building high value relationships among key members of the audience—relationships can never be commoditized. For example, “Million Dollar™ Consultant” Alan Weiss provides his subscribers with access to an online community in which members share stories and advice with one another. While this community is free to members, it serves an important function for Alan, keeping a large group of former clients active and engaged in his community, and willing to listen to new offers and promotions.

As with any industry, it is important to be aware of what your peers (or competition) are doing, but it is also important to keep an eye on what others are doing and how it can be applied to your business. Once, memberships were only for clubs or organizations like Digital Content Next, right? Today, the concept of membership can be applied to any number of industries or offerings to create genuine value to customers and profitable experiences across the board.

 

TheMembershipEconomyRobbie Kellman Baxter created the business term “Membership Economy” and recently published the book The Membership Economy: Find Your Superusers, Master the Forever Transaction and Build Recurring Revenue.

Baxter is the founder of Peninsula Strategies LLC, a strategy consulting firm. The Peninsula Strategies website is www.peninsulastrategies.com. Her clients have included large organizations like Netflix, SurveyMonkey and Yahoo!, as well as smaller venture-backed startups. Over the course of her career, Robbie has worked in or consulted to clients in more than twenty industries.

Before starting Peninsula Strategies in 2001, Robbie served as a New York City Urban Fellow, a consultant at Booz Allen & Hamilton, and a Silicon Valley product marketer. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business.

Perspectives Image
Perspectives

DCN’s Recommended Reading: Week of July 16, 2015

Our picks of the must-read stories from around the web: 

Industry-Research | Video

Solving Digital Video Advertising’s Premium Dilemma

Recent research commissioned by Teads and conducted by Forrester in May 2015 notes that while digital video advertising continues to show strong promise for marketers, agencies and media companies there are a few notable challenges that must be resolved in order for it to deliver value for everyone involved.

Five key findings from the report, conducted among 529 advertisers, agencies and media companies in Argentina, France, Germany, Italy, Mexico, Span, UK and US:

1. All market participants expect digital video spend to increase in the next two years.

2. Lack of premium inventory — and disagreements about the definition of premium — hold back video’s
growth.

3. Video is still a work in progress to fulfill its promise.

4. Advertisers, agencies, and media companies must build an accountable, transparent video ad market.

5. Outstream advertising offers one solution to these challenges.

Industry-Research | Video

TV is Now the 2nd Screen for Kids

In our latest study on kids’ preferences in viewing TV content across devices and platforms, we find that in a majority of family households with tablets and smartphones, TV is no longer the first choice for entertainment, with 57% of parents saying their child prefers a device other than the TV to watch video content.  Mobile devices offer versatility, simple user interface and a ‘personal’ viewing experience.

As such, in households where tablets and smartphones are accessible, they’ve now taken the lead with kids as the preferred way to enjoy, explore and discover video content. In fact, 58% of kids in households with tablets have their own, making it even easier for them to watch the video content they want to watch, whenever and wherever they want.

TV as Punishment?
TV has become the ‘second’ or even third screen of choice for many of these kids – so much so that nearly 50% of parents say that when their kids misbehave, to punish them, they take away their tablet and make them just ‘watch TV instead’– creating a generation of kids for whom ‘TV is punishment.’

Additionally, when given the choice between dessert or more time on their tablet, 41% of parents say their child would choose the tablet over dessert, compared to just 33% choosing dessert over the tablet.

 More Please…
TV as 2nd Screen for Kids_HighResAnd, in true ‘more is better’ fashion, kids are not limiting themselves to just one screen at a time – 56% of parents say it’s not unusual for their children to be watching different content on different devices at the same time – and 39% are, at times, watching the same content on different devices simultaneously.

This trend in media and platform preferences has implications for TV networks, cable and satellite companies, streaming services and content creators as they market and develop entertainment for the next generation.

Self-Directed Viewing is Here to Stay’
|As TV content providers watch their audiences rapidly shift from traditional viewing to streamed and digital, this study shines a light on kids as the ‘canary in the coal mine,’ showing a need to redefine audience reach expectations, programming and creative development, as well as measurement and monetization strategies sooner rather than later.

In effect, streamed content services are now eating into linear TV audience share, just as a large percentage of audience share shifted from broadcast to cable only a couple of decades ago – but at a more rapid pace and without a solution in place to measure viewing on new and preferred platforms.

In a meeting with a major network client the other day, I was earnestly asked – ‘Don’t you think that when they grow up, they’ll want to watch live TV just the way we do – or just turn the set on and channel surf?’ my response was ‘when they grow up, you’ll want to provide them with access to your content however they want to access it – on any platform or device, at any time and on their own terms – and the time to figure out how you’re going to do this is now.’

 

Robert Miner is the CEO and Founder of Miner & Co. Studio, an audience insights based strategic consultancy with a focus on trends, innovation, show concept development and brand positioning serving major television networks, content creators and digital video providers.

*Study included in-home ethnographies and a survey fielded among 800 moms and dads of kids ages 2 to 12       who live in the United States and watch at least some video content on a tablet and/or smartphone.

The margin of error is +/- 3.46% 3.4

Perspectives

Writing to the Data? The Complex Relationship Between Stories and Reactions

The Washington Post and New York Times, two of the most respected brands in journalism, recently announced they will share some data with their journalists. The mere fact that this announcement made news alludes to how fledgling this practice is in newsrooms around the world. Despite the growing use of data to inform ever-more business decisions, there has been hesitation to leverage data on the editorial front for a number of reasons.

  1. Writing to the Data – Sort of like the axiom “teaching to the test” in education, it’s understandable why a newsroom might resist the widespread practice of making analytics part of daily life, as it might distract journalists from their editorial mission and lead to the production of lowest-common-denominator content.
  2. Pay-for-Performance – Even further down the path of being slave to the data, this one can be a morale-killer: The line between sharing data with journalists and rewarding performance (however that might be defined) can be too blurred for comfort for some publications and a morale-buster for staff.
  3. Ambiguity Over Which Metrics Are Even Helpful – This is not a small issue. Depending on the publisher’s editorial mission and goals, simply measuring shares or page views might do very little to illuminate the newsroom on what resonates with audiences – even if it’s of interest to the business teams.

All of the above has understandably tempered newsroom’s excitement over integrating data analyses into the daily workflow, even as more journalists become fluent in the discipline. Journalists are critical thinkers. They investigate and analyze in the routine execution of their work. A little bit of data is not going to intimidate them.

But above all else, journalists are storytellers. For a living. At a certain point, they live in service to the story as much as they do to their audience. Data, in that case, is only helpful insofar as it can help a journalist tell the next story. And the truth is, journalists routinely employ data of this nature in the newsroom, and have for some time – it just hasn’t always been of the quantitative sort.

Think of the five most prevalent stories in the news right now. How many of them are “breaking” stories and how many of them are ongoing coverage and commentary of stories several days old? Every major news story generates plethora of possible follow-up stories, each of which can go down any number of paths.

In addition to chasing down those paths and lining up additional sources, journalists also have the trajectory of audience reaction to guide them. And quite often, they use it.

We’re seeing this dynamic play out now in the coverage of the Charleston shooting, as that story has now shifted to a debate over the removal of the Confederate flag from government buildings in South Carolina. In the wake of such a horrible tragedy, was this the logical follow-up story? As the conversation accelerated on social channels (and yes, the Comments section of news sites), audiences answered that question loudly and clearly.

These days, news stories are routinely developed and told through this feedback cycle.  But even in this context, an aforementioned tension arises: How much is journalism merely “following the data” versus shaping it? How much of both should it strive for? The resulting balance probably looks an awful lot like the appropriate balance between cognizance of the “hard numbers” and sticking to journalist instincts.

In which case, more publishers should encourage (but not force) their journalists to investigate all the data, both qualitative and quantitative, at their disposal so as not to rule out a potentially powerful story. None of that can happen unless the data is made available to them first.

Innovation | Revenue | Video

Passion Play: Lifetime Launches Movie Classics Subscription Service

Boasting classics like Sexting in Suburbia, Flowers in the Attic, and Mother May I Sleep With Danger, it is an understatement to say that Lifetime has a passionate fan base. With an increasing number of networks experimenting with standalone digital services, A+E has deliberately taken a different route with the debut of its Lifetime Movie Club subscription video service—one that aims for the heart of their ardent audience.

“We view the Lifetime Movie Club as complementary to our Lifetime channel,” says Evan Silverman, SVP of Digital Media at A+E Networks. While the network has no plans to disrupt its existing relationships with television providers and distributors, Silverman points out that “A+E Networks has been very aggressive in delivering on a lot of different platforms,” which include iOS and Android apps, Apple TV, Roku and Amazon Fire. The network takes pride “in finding new ways to deliver our long form content to audiences.”

FlowersInTheAtticWith its latest digital move—their first direct-to-consumer subscription service—A+E will offer subscribers access to a rotating library of Lifetime movies without commercial interruptions for $3.99 a month. The app features more than 30 movies about four new titles cycled in on a weekly basis. Silverman says that the decision to cap the number of movies enables A+E to maintain its flexibility in using its library in other environments. In fact, the Lifetime Movie Club idea arose as a way to leverage the depths of the Lifetime movie library.

But that was definitely not the only reason. “When we were thinking about what subscription product to launch we wanted to find a library of content that had a passionate audience,” Silverman says. And the Lifetime audience fit the bill. He describes them as a truly devoted group of fans who will be willing to pay to watch the classics they love. And given that the monthly price is about that of buying a single movie through iTunes, Silverman believes that Lifetime’s loyal fans will ante up for access.

A+E plans to continue to explore a range of models to distribute its content including a recent move to become part of the Dish Sling TV offering and exploration of other subscription products with its networks. “We’re open to models that make financial sense and serve our viewers well,” says Silverman. And while we may see similar offerings that “leverage library content to super-serve fans,” the additions to its digital offerings are intended to complement and round out the company’s range of offerings. “We’re not trying to blow up the television industry.”

Advertising | Perspectives

The Age of (Atypical) Advertising Alliances

Coopetition. It’s a term long familiar in Silicon Valley, but only now making the rounds in the advertising world. It means that companies known for battling it out in the marketplace sometimes have to work together for the greater good for both companies. (It’s also a founding principle of DCN.)

The result? Unusual advertising alliances are shaking up the $531 billion global advertising business. It might seem bewildering, but given the trends taking place in advertising and technology and predictions for the future, it may be what story-driven marketing needs. Alliances this year include the Pangea group of publishers, the Truffle Pig ad agency, and even a video deal between Vice, Bank of America and Pinterest.

Vice Video Series
At the recent Cannes Lions International Festival of Creativity, Vice CEO Shane Smith had observers buzzing when he announced that Vice, Bank of America and Pinterest were joining forces to market “The Business of Life.” It’s a digital video series produced by Vice that launched earlier this year. With Bank of America backing it up, Vice can further its aim of providing better personal finance education, while having the Bank of America brand and knowledge to back it up. Bank of America can also leverage the Vice brand, including its storytelling ability, authority in the video world, and hip factor with the millennial demographic.

Pinterest, meanwhile, can roll in valuable insight from its new division, Pinsight Labs, into the collaboration. In the Labs, “a team of strategists analyze data from its platform to find insights for brands and other partners to help inform their marketing efforts,” Jack Marshall and Suzanne Vranica wrote in the Wall Street Journal. Put another way, Bank of America can look deeply into Labs to see what financial topics might interest millennials most—because Pinterest too has a strong hold over the much-coveted millennial crowd.

“You have new alliances forming. You can see where [the industry is] going,” Smith said at Cannes. “You can see it going to a more bespoke, case-by-case, platform, content, brand kind of thing.”

Truffle Pig Collaboration
According to Smith, the new deal is not much different than the other recent unusual advertising alliance that’s taken the marketing world by storm: Truffle Pig.

Truffle Pig is a collaboration among the advertising giant WPP, DailyMail and Snapchat. Much like the real-life truffle hog it’s named for, the new advertising agency is meant to sniff out and market content that only a true truffle pig can. (A truffle pig, by the way, has an excellent sense of smell that helps it discover truffles. Yum.) The agency will create both online and print sponsored content, including vertical video that’s meant to be shared on social media, and presumably, viewed on mobile. It makes sense given that a new report from Ooyala has found that mobile viewing today accounts for 42% of all online viewing—it’s grown more than 367% over two years. Forty-five percent of millennials have also reported preferring to view video on a mobile device rather than a computer.

Truffle Pig will test its concept first on DailyMail.com, Elite Daily and Snapchat but plans on extending it to any new digital clients. Alex Jutkowitz, head of Group SJR, which will head the Truffle Pig agency, summed up the premise behind the effort at a press conference at Cannes: “Great content is not just about creating it, but having platforms for it… Engaging millennials and having distribution is key. Snapchat is where the millennial fish are and that’s where we are going.”

Pangea Alliance
And earlier this year in March, the Guardian, CNN International, the Financial Times, Reuters and The Economist announced that they would form the Pangea alliance, to allow marketers to use programmatic advertising and pool data from their individual audiences.

“The essence behind this is it will give us a greater degree of strategic control over the direction of our business. Five heads are much better than the Guardian’s on its own,” the Guardian’s Tim Gentry (and leader of Pangaea) told the Wall Street Journal.

And that really sums up the idea of coopetition: strength in numbers.

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