Full research report for DCN members only. Register to or login to download (on desktop see top right corner of page, on mobile the top center). Download buttons will appear at the top and bottom of the page.
DCN Members can access the video of today’s virtual event – a review of the study’s topline findings here.
Digital media companies recognize the important role of subscription-based models in monetizing content effectively. Understanding consumer behavior to support this business model is crucial for attracting and retaining subscribers, optimizing user experiences, and staying competitive. DCN’s new consumer subscription study: Digital Media Subscription Tracking offers a deep dive into consumer subscription behavior and covers a wide range of digital subscription services, including SVOD, MVPD, vMVPD, digital newspapers, magazines, and audio – and usage metrics for AVOD and FAST services. The report is DCN members only, please login or register to access (on desktop see top right corner, on mobile the top center).
The Q1 2023 report is available to all DCN members; all subsequent waves will be exclusive to DCN Benchmark participants as part of their Benchmark’s suite of reports offering timely market intelligence each quarter.
This quarterly research, conducted with Screen Engine/ASI, will identify trends and track market penetration, shifts, and growth in the rapidly changing media landscape. The first wave, Q1 2023, surveyed 1,893 adults 18+, representing the U.S. Census population by age, gender, race, and ethnicity. The sample was online-only and represented approximately 89% of U.S. households and adults 18+ with access to the Internet.
Category penetration
One of the study’s key findings is that the U.S. had more than one billion paid subscriptions in Q1 2023 across the digital media landscape – SVOD, MVPD, vMVPD, digital newspapers, magazines, and audio. This indicates that almost all online U.S. households (97%) subscribe to one or more digital media subscription services. On average, households subscribe to approximately nine different pay services when combining all seven digital media services measured in this study.
The SVOD service category has the most subscribers, with nearly a 60% share of total pay subscriptions, followed by MVPDs and vMVPDs, digital newspapers, digital magazines, and digital audio services. The study also indicates that 29% of all subscribers plan to add one or more services next quarter, while 26% plan to cancel one or more, with MVPDs potentially continuing to decline and vMVPD subscriptions potentially increasing.
The study also highlights that free, “ad-only” AVOD and FAST services will continue attracting more traditional media consumers, who tend to be older and watch more linear TV. SVOD with ads and AVOD services will provide a much-needed incremental and growing revenue stream, especially as growth for pay-only services that don’t carry ads slow their subscriber penetration.
Demographic appeal
The demographic profile of digital media service subscribers shows that the heaviest concentration of subscribers for all services combined are slightly younger (P18-34), more male (M18-34), more diverse (Hispanic and African American), family-oriented (parents with children under 18), higher income (households with income $150K+) and slightly more educated. This demographic profile is extremely attractive for advertisers, making the launch of more digital “hybrid” (pay + ads) services likely.
The Digital Media Subscription Tracking study offers digital content companies essential consumer research to support new revenue models and pricing strategies to stay competitive and retain their subscribers.
Please reach out to me at [email protected] with questions about the Digital Media Subscription Tracking study.
Full research report for DCN members only. Register to or login to download (on desktop see top right corner of page, on mobile the top center). Download buttons will appear at the top and bottom of the page.
Reuters Institute reports that 49% of leading news publishers worldwide now regularly post to TikTok and the number of publishers committing to the platform continues to climb. Echobox’s latest Publishing Trends Survey found that 59% of publishers believed TikTok would be more important to them this year compared to 2022 — a jump of 39% in the last year.
These developments, however, are taking place against the backdrop of growing regulatory pressure on TikTok’s parent company ByteDance. It is conceivable that the world’s fastest growing social media app could soon be banned in the U.S. Why, then, are so many news organizations choosing to invest in a platform whose future is shrouded in uncertainty?
Why invest in a platform with an uncertain future?
1. The short term gain justifies the investment
The simplest answer is that whatever happens to TikTok in the future is less important than the benefit to be gained from using the platform now. When we asked publishers which activities would be more important to them this year, 47% of respondents to our survey answered growing social followers and engagement. Publishers are going where the audiences are, with the hope that readers exposed to their content will either follow them on other social platforms or sign up for newsletters or other subscription products in the event that TikTok becomes unviable.
2. All social media is becoming like TikTok
In the long term, the continued investment in TikTok is an indication of the new realities of social media as a whole. Quite simply, TikTok has changed the game.
In the last couple of years, Facebook, Instagram, and YouTube have all sharpened their focus on TikTok, looking to ape its distinctive allure. The calculus here is that even if the platform was to be banned, the innovations that it pioneered, such as short-form vertical format video, will remain alive and well on other platforms.
Meta’s cross-platform Reels as well as YouTube Shorts have experienced impressive performance stats. Meta announced during its Q1 2023 earnings call that Reels was responsible for a 24% increase in time spent on the platform.
Investments made into acquiring the skills and technology to produce content on TikTok can therefore be put to productive use on other platforms where short-form vertical videos have been incorporated.
The results of our publisher survey reinforce this. For 47% of publishers, creating video will be more important this year than last.
The time is right
In the here and now, how can publishers take advantage of TikTok’s popularity and increase the potential virality of their content?
The most fundamental difference between TikTok and Facebook is the nature of its “recommender algorithms” that determine what content is served up to a given user. Instead of relying on who you follow to determine what content you should see, per Facebook’s model, TikTok relies purely on opaque algorithms to serve up content without a user having to follow anyone; the single imperative on TikTok is to watch.
This removes a barrier to publishers who want to increase their exposure on the platform. Not having the potential visibility of content circumscribed by follower numbers means that, theoretically, it’s easier for any publisher to produce highly-viewed, or even viral content.
Timing is everything
Achieving high performance on TikTok is all a matter of timing.
The process by which TikTok promotes content is simple: it shows content to a small sample of users in its For You feed. Then, if engagement and watch time is high, the video gets promoted to a larger group and so on. Posting video at a time in which a high number of engaged users are active means that the potential for virality is immediately increased.
Utilizing AI-powered social media management tools to optimize post timings is therefore a simple and cost-effective way to increase visibility. The fact that a publisher’s TikTok follower count has virtually no bearing on which content is promoted allows greater opportunities for AI systems to maximize the potential visibility of a video and help its performance snowball.
The future of TikTok remains uncertain, but the platform is rich in immediate benefits. With over a billion (predominantly young) users, publishers have the opportunity to meet new audiences where they are congregating. With a combination of AI smarts and a forward-looking strategy, publishers can become trusted and indispensable news sources with or without TikTok.
About the author
Ashley Kibler is the Marketing Director at Echobox, the leading solution for publishing automation used by over 2,000 publishers and media groups worldwide to automate and optimize content curation and distribution.
Generative AI has got folks in a frenzy. From excitement about everything it can do to concerns about biased algorithms, plagiarism, and potential job displacement, there’s a raft of optimism and concern around GAI.
Take a breath. Are you good? Ok, now let’s figure out AI together.
Sorry, with all the talk and emotion behind generative AI, I thought it may be a good time for everyone to catch a breather. While I understand the concerns, I happen to be a constant optimist. And as a digital media revenue leader, I’m always looking for optimal strategies at the highest level to secure the brightest future.
In that vein, even though AI in general has been around for some time, generative AI rings my “opportunity” bell – unlike many other developments in recent years. And I don’t think I’m alone. It’s not only because generative AI is the latest trending phenomenon but because it’s a resource that delivers applicable convenience spanning virtually all industries.
If you’re a curious optimist like me, you’ve noted GAI’s potential cost and time-saving implications by now. If you’re a futurist, you may have already concluded that AI will become mainstream, embedded within corporate culture, and likely governed in one way or another. It will also continue to evolve.
Yes, I’m fully aware and respectfully conscious of GAI’s prospective danger in infringing upon the authenticity, stylistics, and nature of writing, journalism, and creative arts as we know it. However, glass half full, I’m also confidently optimistic about our ability to address, structure, regulate, and develop solutions for varying segmented conventional concerns.
That said, AI’s current and developmental beta states still hold colossal potential for new applications, especially for those in leading digital media sales or revenue roles. To unfold the magnitude of what GAI could represent for the digital media industry, I took a step back to understand a broader scope of capability to illustrate how strategies may be developed and actualize its role in digital media organizations.
What it can do
If we assume that GAI is here to stay, it would be irresponsible not to consider the ways in which it will impact the revenue side of digital media. What if I told you I’ve seen GAI applications create custom sales scripts in seconds? What If I said GAI could develop cold email communication flows or custom marketing suggestions? Or that it can craft an elevator pitch or presentation about why a prospect should advertise with a specific organization?
If you can feel your chest tighten, believe me when I say I’m only scratching the surface of the impact GAI will have on the business of media. Take a breath. Are you good? Okay, let’s identify how GAI could help digital media revenue strategies by starting at the highest level and eliminating the noise.
What could it represent
A calculator doesn’t diminish the need to understand math; it enhances our ability to output more complex algorithms conveniently. Similarly, as a resource, GAI can improve the output of nearly all matters and tasks related to revenue growth for digital media. Therefore, the most straightforward digital media growth strategy in leveraging it may be to aid digital executives in making more sales.
GAI can help representatives articulate the benefits and features of products or services custom-tailored to specific businesses and industries. It can also create and send emails or assign process tasks that are traditional time and sales focus deterrents.
Once you take a step back and begin to digest the immensity and capabilities of GAI, the reactionary credulous grim outlook begins to wane. It is soon replaced by optimism around the opportunity it offers to enhance varying aspects of an organization, which clears a path for future strategies to formulate and blossom.
What AI’s role could be
Furthermore, I believe the key to leveraging AI, and generative AI specifically, for growth in digital media is custom automation in higher volumes, especially when it comes to sales. AI epitomizes the evolution of automating the proverbial “sales processes” or even replicating the techniques, communication tactics, and follow-up habits of top sales executives.
However, it is important to be conscious, balanced, and diligent so that you don’t fall into a silo of convenience alone. Keep an elevated perspective to implement AI tactics that affect and flow seamlessly throughout the entire revenue department.
The guiding north star in any AI strategy should be to deliver robust, sustainable solutions that enhance all processes and growth opportunities within an organization’s revenue sector and with advertising partners. Add value to products and services by leveraging AI to address advertisers’ specific needs at higher volumes. Don’t send recycled AI-generated communication about the organization’s history to new prospects.
Actualizing through prompting
The balance of knowing how to leverage GAI for growth or even enhancing sales communication and output is going to be important to brand value. As prevailing use cases for AI become more established and widespread, so will the need for understanding how to leverage the best prompts or the phrasing used to initiate a conversation or command with various AI technology.
If adequately equipped and informed, the impact of critical initial engaging touchpoints specific to an advertiser’s needs generated from AI may result in higher close ratios. Prompting may even become a future language or quintessential skill set to propel revenue growth within digital media. This requires the art and creativity in understanding how to position a command or question with AI versus using it to do something just because you can.
For example, the result generated by prompting an AI chatbot to create an advertising sales script for a local restaurant may seem compelling but needs to be more developed to position an organization as a solution provider. Begin with a prompt asking, “what a restaurant’s most important success metrics are” and then follow it up with a request to create a sales script based on that result. The difference should better convey the organization’s commitment to delivering a solution and not simply selling an audience.
Opportunity abounds
Generative AI is still in its early stages and is continuously adapting and evolving because it needs to. Now is the time to begin setting the stage for how digital media can configure and fine tune various applications of generative AI, particularly within the revenue vertical, to support advertising partners, organizations, and communities.
Certainly, AI is not without its flaws. And, much like the evolution of the internet and search engines, mass adoption will take time. The very existence of AI represents and embodies human creativity and ingenuity, and the optimist in me tends to applaud its boldness and innovation. If you’re concerned, you’re not alone, as I firmly believe in thorough risk assessment and evaluations. However, if fear of the unknown is causing hesitancy about AI, then take a breath, and know that we’re all going to figure this out together.
About the author
Richard E. Brown is a News/Media Alliance Rising Star recipient, the former director of renewals and digital sales strategy at LPi, and the former director of digital operations and sales of the Milwaukee Journal Sentinel. He recently served as the head of digital subscriber churn for Gannett | USA TODAY NETWORK and is now the senior director of retention for The Daily Beast. He is also a member of the board of directors for the Wisconsin Newspaper Association Foundation.
In recent years, the traditional television and streaming video industries have undergone significant transformation due to the expansion of digital platforms and changing consumer preferences. To gain insights into these changes, Adtaxi conducted an extensive study, 2023 TV & Video Streaming Survey,exploring the evolving landscape of TV and video streaming with more than 1,000 U.S. adults.
According to the survey, streaming services have solidified their position as the primary mode of video consumption for most viewers. More than 80% of respondents report subscribing to at least one streaming platform, with Netflix leading the pack. The convenience of on-demand content, the wide variety of choices, and the absence of advertisements were cited as the primary reasons for the popularity of streaming services.
Preferred choice
Streaming services are the preferred choice of video consumption for a significant portion of adults, surpassing cable (31%) and broadcast (11%) options. Approximately 42% of adults now opt for streaming services, with 35% accessing streaming content through their TV sets and 7% using personal devices. Roku predicts that this trend will persist and that an estimated 50% of all U.S. households will cut the cord by 2024.
Cord-cutting continues
The research also reveals that the cord-cutting trend shows no signs of abating. A staggering 75% of respondents report that they canceled their traditional cable or satellite TV subscriptions in favor of streaming services. The flexibility, cost-effectiveness, and customizable nature of streaming platforms have made them attractive alternatives to traditional TV providers.
Original content and exclusive deals
In the battle for viewership dominance, original content has emerged as a key differentiator among streaming services. The Adtaxi survey found that 68% of respondents subscribed to a streaming platform specifically for its original programming. Netflix, Amazon Prime Video, and Disney+ were identified as the top platforms known for their high-quality original shows and movies.
Moreover, exclusive deals and partnerships have become important strategies for streaming services to attract subscribers. This includes securing exclusive rights to popular sports events, partnering with renowned creators, and signing contracts with top-tier production companies. These tactics not only help streaming platforms stand out but also provide viewers with unique and diverse content options.
The battle of ad-supported streaming
While subscription-based streaming services dominate the market, the survey highlights the growing popularity of ad-supported streaming platforms. Almost 40% of respondents report using ad-supported services, indicating a willingness to endure ads in exchange for free or lower-cost access to content. This trend should encourage more advertisers to invest in digital advertising within the streaming space, presenting new opportunities for brands to reach their target audiences.
The 2023 TV & Video Streaming Survey sheds light on the ever-evolving landscape of entertainment consumption. The dominance of streaming services, the ongoing cord-cutting trend, the importance of original content, and the rise of ad-supported platforms all point toward a significant shift in viewer preferences and behavior. As the industry continues to evolve, it will be interesting to see how streaming services adapt to meet the demands of their subscribers while providing a seamless and personalized entertainment experience. The future of TV and video streaming looks promising, offering consumers a wide range of choices and content options that cater to the consumer’s interests and preferences.
There is perhaps no greater trend in the tech world right now than artificial intelligence (AI). Specifically, generative AI, which can produce content based on prompts, is garnering a lot of attention from – and even causing fear within – media companies.
Generative AI makes content creation far easier, so media companies likely feel that they have to dive head-first into a future of AI-generated articles and TV shows.
The truth is that there is a far easier, even safer way for the media industry to dip its toes into the AI waters and prove out that it’s a worthwhile investment. The best place to start is with using AI to optimize advertising across media, whether that’s a website, an app, a CTV channel, streaming platform, or linear TV network.
A quick start with AI
It’s not breaking news that media companies need to adapt to remain competitive and constantly find new ways to create efficiencies and cut costs while remaining adaptable to industry trends. AI is getting attention because it promises to be an incredibly effective way for media companies to accomplish these goals.
Ad optimization is probably the easiest, fastest way to a return on your AI investment, largely because there are so many different ways that AI can be applied to the advertising process. These are just a few of the use cases for AI across a media business.
Personalization
When machine learning algorithms analyze user behavior and preferences, they can determine the ideal ad placement based on factors such as user demographics, interests, and browsing history. This personalization can lead to higher click-through rates and conversions for inventory, which allows a media company to charge a higher price and therefore drive more revenue. Similar models can be used for ad supported TV and CTV to optimize pod placement of advertisements in a TV show.
These same data signals can also fuel content recommendations, giving your audience a customized experience and driving longer interactions with a media brand.
Flexibility
Another application of AI is to track and analyze ad engagement. Ads that draw more interest from consumers are likely to perform better. Armed with this knowledge, media companies can adjust ad placement and content in real-time for maximum impact.
Insights
AI can analyze user-generated content, such as comments and reviews, to better understand user sentiment. This provides intel on whether ad placements need to be tailored to improve a negative experience.
Automation
AI’s greatest strength is automation, which can dramatically reduce the amount of time media companies spend running A/B tests on their ad formats and placements. Using AI, a company can run tests quickly and efficiently, helping determine the most effective strategy for their platforms. The ad creative itself can also go through a model to determine which ads will resonate with certain audiences.
Each of these use cases should excite media companies that are looking to increase efficiency and drive greater revenue. But the question still remains – where, exactly, should a company start? There are two key steps every operation should take.
1. Prioritize data collection
There’s an old saying, “garbage in, garbage out.” Even the most advanced AI is only successful when data is accurate and viable. In fact, we’re seeing hot consumer-facing AI products come under scrutiny because they generate inaccurate answers.
The first step any media company should take to effectively implement AI is to collect data on its audience. Most media companies already have this intelligence in spades, so the step becomes gathering it together in a usable fashion. Often, data can be siloed across different groups. It’s important to get buy-in across the company on any AI initiatives, so that the models have access to as much data as possible.
For most media companies, this data is generated by the users themselves, in the form of activity across the media properties, subscription sign ups, and ad interactions. This good, clean data provides insights into the types of ads audiences respond to, what times they’re most receptive to seeing an ad, and how they choose to react.
2. Select and apply algorithms
Armed with information about the audience, the next step is to use it. This is where media companies need to roll up their sleeves and better understand AI and Machine Learning. There are many different types of algorithms that can be used for ad optimization purposes, and media enterprises need to select the model that works best for their business and their goals.
These algorithms utilize historical data from previous campaigns as well as current campaign performance metrics in order to predict future performance based on similar past conditions. They learn over time, so with more data and time the models become more accurate at predicting future outcomes. Of course, most media companies don’t have the resources to build a model that specifically adheres to their business goals. Outsourcing teams to build models can further speed up adoption.
Again, AI for making content is getting all of the headlines, and it’s certainly valuable, but that’s not the place to start for most media companies. Ad optimization is an easy way to get started, and an easier way to start driving revenue and justify the costs of outsourcing algorithm development and technological updates. Now is the time to get on board. The next best time was yesterday.
In a previous post, we predicted that there would be a rapid expansion of brand content with the adoption of generative AI and discussed how publishers can utilize this adoption to fuel growth. I wanted to expand on some strategies publishers can implement to start the conversations with brands and agencies about using the content they have already invested in to drive brand consideration.
Publishers can leverage a brand’s non-promotional content and powerful storytelling to drive new and incremental revenue. Consumers across different mediums are actively engaged with long-form content, increasing brand recognition. Here’s a pathway for publishers that want to help brands use content in order to optimize the revenue potential for their businesses.
Content: A vehicle for influence
Before we jump into the strategies, why should you care about prospecting with content? Here are some numbers to help convince you that consumers rely on content to make purchase decisions:
According to Content Science, 70% of consumers prefer to learn about products and services through content rather than traditional advertising.
According to Nielsen, the average time spent on sponsored content is two minutes and thirty seconds. That’s roughly the same as purely editorial content.
In today’s digital age, consumers are inundated with display and video advertisements. But when it comes to product and service information, branded and sponsored content takes a backseat to these traditional digital formats. The data suggests that consumers are looking for authentic and informative content they can engage with rather than being sold to.
Long-form branded content allows brands to tell their story, provide helpful product and category information, and ultimately guide consumers to make an informed purchase decision on their terms. As a result, companies are changing their marketing strategies to focus on creating content that informs consumers throughout the purchase journey. And publishers are the ideal partner to repurpose, optimize, and scale a brand’s content to connect with a brand’s audience.
Content sells itself
Content marketing has proven to be a game-changer; according to HubSpot, 70% of marketers are actively investing in it. Still, only a few industry partners offer solutions to scale this content outside the brand’s owned channels. The increase in investment in content marketing reflects the fact that marketers not only build trust by providing valuable and informative content but that it also positions them – and the brands they represent – as industry leaders.
Tested tactics to drive revenue
Repurposing content opens up a unique opportunity to create impactful prospecting strategies. One tested method is to pull content from brand marketing channels and create proactive mocks that showcase their content on a publisher’s site.
The best outreaches we have seen involve a multi-touch approach to showcase brands’ content within a publisher’s environment, utilizing content sourced from Facebook, Instagram, blogs, ebooks, whitepapers, transcribed videos, and podcasts. These mocks can be used for prospecting new business or encouraging existing clients to invest in incremental budgets. This outreach allows brands to see how their content can be repurposed for maximum engagement.
Pro tip: streamline the process
The most impactful way to showcase the power of a brand’s content presented in the context of your site is to show marketers what that would look like. Most methods require publishers to do that directly from their CMS requiring development and design resources to create a mockup without actually pushing it live. Alternatively, publishers can use native ad servers to do this work. This way, publishers can upload the creative and content, and generate a preview link. Some platforms include content ingestion tools, which will help streamline this process further. The link can then be shared directly with the client or included as a screenshot in slides.
An alternative method would be to build a mock template in PowerPoint or another design software and copy content into the template. The problem with this method is it requires the manual and time consuming process of finding the content, pasting it into your template, and making design adjustments.
In conclusion
Content is emerging as a critical driver of influence in today’s digital world. Writing content and promoting it on different platforms builds trust and creates an authentic relationship with consumers. But creating quality content is a major investment. Taking the time to repurpose that content and automate the process correctly can help publishers partner with brands so that they can more readily scale their content and drive brand consideration.
In media, “signals” have long driven the business, whether for must-see entertainment or brand-defining journalism. Unfortunately, these signals, which convey value, meaning and relevance, are becoming harder to distinguish amidst the increasing noise of modern digital media. Yet the ability to distinguish between signal and noise is just as important, if not more so, in the age of digital media given the abundance—and velocity—of information.
Today, there are fewer and fewer high-value signals that can cut through the noise without interference. Brands invest upwards of seven million dollars for a 30-second commercial during the Super Bowl or six figures to run a page in the September issue of Vogue so that they can send a signal to a large and focused audience, not only about their product, but also make a statement about the significance of their market position. In other words, “we have so much confidence in our offering that we can spend this kind of money to tell you about it.” There is very little noise surrounding these types of advertisements. The message is clear. And everyone makes bank.
However, there are also high-value signals that must compete with endless noise. To see this in action, just take a stroll through Times Square in New York City, one of the busiest and noisiest places in the world, with a constant barrage of sights and sounds competing for attention. Amidst all this noise and the tens of thousands of people rushing about their days, one might think it would be challenging for any brand to resonate. Yet countless companies do just that by spending millions to share their message in this hub of entertainment and commerce. With their brand messages broadcast on LED screens hundreds of feet wide, or plastered on buildings that stretch to the sky, they send an unambiguous signal of value and importance.
The Super Bowl offers one of the year’s must-watch experiences—both on the field and in the ad breaks. The pages of September Vogue overflow with lush photos and unparalleled fashion coverage with ads deftly woven into the fabric. Times Square is one of the most exciting, chaotic, and sense-stimulating places on earth. In every case, the context provides a signal boost: What you see here has value.
In the world of digital media, the rise of the tech giants has allowed them to suppress signals and amplify noise. Amidst the endless content scroll are interchangeable commodities and it’s hard to differentiate between much of anything on these platforms. In many ways, they’ve turned the world upside down by turning traditional signals into something else altogether through their black-box algorithms.
Often these secret signals happen below the surface shrouded in mystery, as seen in the case of the Google search engine. This tool was built in a revolutionary way, using “signals” to sort all the world’s information. This grand innovation offered a way to create structure by ranking a site’s ability to collate high value links around the web. Fortunes have been won and lost in how Google values those signals. Over time, Google matured and evolved into using authority and other proxies to value sites across search and YouTube. The signals favored by this search superpower frequently recalibrate, but we know they are there under the surface, controlling what people see.
Amazon has built the world’s largest retail store where its Prime signal, in a classic flex of monopoly power, has arguably become the most important indicator of whether the customer will buy a product or not. Sure, there may be dozens of vendors offering nearly identical products, but a single signal undeniably tilts the scale.
However, we have also seen that signals can be “lost.” Facebook built what is arguably the most powerful targeted advertising business in history by mining and exploiting data across the web and mobile app ecosystem. Targeted ads have consistently comprised more than 97% of the company’s revenues for more than a decade. This was never clearer than in 2021: When Apple stepped up its privacy efforts, Facebook lost nearly half of its market value, which the company’s CFO attributed to “signal loss.” That loss continues to haunt the company’s fortunes as the company scrambles for a new moat to protect its empire.
The value of signals amidst the noise is also key to the rapid-fire (and controversial) development of large language models, such as those used by Google’s Bard and Microsoft’s Bing to train generative AI. The value of an answer engine will undoubtedly lie in the quality of its results. Therefore, such models must differentiate between things learned through Financial Times versus Reddit, Washington Post versus Twitter, and so on. Although they may claim to treat all domains generically, there is little doubt the source matters. All content is not equal.
As digital technology continues to advance, distinguishing between signals and noise becomes ever more challenging. Like Times Square, the noisiness of the digital world can be stimulating and provocative. However, with so much noise, signals that can convey meaning and relevance to a broad audience have more value than ever.
Media companies must focus on developing strategies that allow them to differentiate themselves and their messaging, so they can send signals that cut through the noise and resonate with their target audience. And they must seek out platforms, partners, and technology companies that fully recognize and fairly compensate these valuable signals as they launch, thrive, and grow into maturity.
Amidst the nearly infinite access to content created by anyone and everyone—from influencer-ally or trusted brand to bot armies and monetizers of disinformation, signal has never been more valuable. Ultimately, the ability to differentiate between signals and noise is essential to success in the digital age, and those who can do so effectively will have a significant advantage, and that advantage will be one shared by the audiences they serve.
Digital media continues to transform the way people consume news and information. Native digital news organizations have become a vital source of information for many people around the world. With fierce competition and the role of social platforms as intermediaries, how can digital native media businesses grow, develop, and publish information with greater independence and sustainability? New research, Project Oasis, from Sembra Media, examines the trends, impact, and sustainability of independent digitally-native news organizations.
To help support the growth and sustainability of independent digital native news organizations, the report includes a searchable media directory. This database includes 530 digital native news organizations in more than 40 countries across Europe. It contains information on the types of stories each organization covers, their funding sources, and their audience reach ‒ showcasing the need for diverse voices and perspectives.
The directory is a valuable resource for journalists, editors, and publishers looking to connect with other independent digital native news organizations. It provides a way to easily find and share important stories and sources that offer diverse perspectives, which are essential to accurately informing audiences.
Challenges
Project Oasis highlights some of the many challenges facing native digital news organizations. One of the biggest is the struggle to achieve financial sustainability. Many of these organizations rely heavily on one or two funding sources, such as donations, subscriptions, and advertising. However, the report found that these sources of funding can be unpredictable and unstable, which can makes it difficult for organizations to plan their future. The research identifies the need for two to six revenue sources as optimal for native digital news organizations to be sustainable and remain independent.
Another challenge facing independent digital native news organizations is the need to build trust with their audience. Many people are skeptical of the news they see on social media and other online platforms. As a result, there is a greater need for independent digital native news organizations to establish their credibility and build trust with their audience.
Optimism
Despite these and other challenges, the report finds reasons to be optimistic about the future of independent digital native news organizations in Europe. These include several key trends that are shaping the future of the industry, including the growing importance of mobile and social media, the rise of video journalism, and the increasing use of data and analytics to inform reporting.
The research also focuses on identifying profitable business models for independent digital native news organizations. These models include advertising, subscriptions, memberships, events, grants, and partnerships.
An advertising-based model is the most traditional revenue source for digital news organizations. Competition from big tech platforms like Google and Facebook presents a difficult ad sales marketplace for smaller players. However, advertising is still a viable revenue source for digital news organizations. Digital news organizations should differentiate themselves by focusing on building high-quality content, engaging audiences, and offering first-party targeted advertising solutions to advertisers.
Subscription models require high-quality content that engages the reader and convinces them to pay for the content. There are also membershipmodels, which offer a more community-focused approach to revenue generation. Memberships typically offer readers access to exclusive content, events, and other perks, in exchange for a regular fee. The report notes that membership models can be particularly effective for organizations with a strong and loyal following.
Events-based revenue models involve hosting conferences and workshops to generate revenue. The report notes that events can be an effective way to build relationships with readers and generate revenue. However, they require significant resources to organize and execute successfully.
Grants and philanthropy in funding independent digital news organizations are also available. The report notes that grants and philanthropic funding can be an effective way to support journalism that is not commercially viable. Organizations must carefully maintain their editorial independence and avoid conflicts of interest. The report also notes that there may be viable partnershipsand collaborations between digital news organizations and other media outlets, as well as non-media organizations. Partnerships can offer benefits such as shared resources and expertise, as well as access to new audiences and revenue streams.
Future focus
As the digital marketplace continues to evolve, independent digital native news organizations will play an important role in shaping the future of journalism, filling news gaps, covering underserved communities, and combating mistrust and disengagement.
The Project Oasis report and its searchable media directory offer important resources to support the future of independent digital native news organizations. The research provides a comprehensive look at the challenges and identifies opportunities for sustainable growth. The directory also provides a valuable resource to help protect democracy by sharing resources, collaborating on projects, and amplifying each other’s voices.
Every once in a while, a trend rippling through the digital media industry that springs up from the trade publications and into general-interest media. The launch of ChatGPT has been one of those times. AI content generation feels like more than ones and zeroes to media consumers at large. It feels tangible, even visceral, because it has direct ramifications on the production of content itself. Clearly media leaders need to make their voices heard in order to help guide the conversation for users as well as AI developers.
It would appear every Big Tech business wants in on AI chat to power search. But like identity and privacy, media companies are not about to sit back and watch which of the tech giants “wins” generative AI. They need to understand how AI will change content consumption, how they can use it to their advantage, and how to keep walled gardens from absorbing more of their revenue.
A new era for the search business
We’re seeing real and atypical disruption today in AI chat’s applications for search. Bing’s ChatGPT search function removes the onus of poring over multiple search results, and simply generates what feels like a coherent response upfront – be it right or wrong, strong or flimsy, fair, or biased. And history shows that human nature tends to prefer convenience over perfection. Search providers are already investigating how AI search may be monetized, to avoid losing out on the serious revenue search advertising traditionally has delivered (58% of Alphabet’s total revenue last year, for those keeping score).
That brings us to media companies’ reliance on search traffic to monetize their own sites and content. The prospect of users being disincentivized from visiting publisher sites to verify and provide context for information looks ominous to publishers. Today, 26% of all publisher traffic comes from search, in an environment where open web publishers are already competing against walled gardens for traffic and advertisers are reducing their budgets. And as it stands, not all AI search tools link back to their sources, and marketers are still trying to understand how the AI search ad experience should appear. And while search bots already crawl publisher pages, AI chatbots present a less balanced exchange between publisher and search engine.
Publishers that control their data have an advantage
Let’s avoid tunnel vision here, though. Publishers’ imperative to soften any blow to revenue from search traffic overlaps with their existing efforts to reduce reliance on revenue from the programmatic open market. Those efforts involve building loyalty among users and advertisers alike. For users, publishers are offering subscription packages, exclusive newsletter content, and the like. For advertisers, they’re offering private marketplaces and direct deals. Publishers can better navigate AI disruption by continuing and evolving those business strategies. They need to position themselves as sources of trustworthy, high-quality content worthy of the lifetime audience loyalty that can grow CPMs and incentivize deeper advertiser relationships. And AI has real benefits for those strategies.
If and when search becomes a less reliable source of traffic for media companies, they’ll need to ramp up efforts in driving traffic from channels such as social and video. In finding the best channels and business partners, they can turn to AI to analyze large volumes of first- and second-party data, and to do lookalike modelling. Leading publishers have already been doing this as part of their data strategy for withstanding third-party cookie deprecation. Advertisers are taking bold data strategy steps, too, and have the resources to be very advanced here. Publishers should compare notes with their brand partners to learn how to best leverage AI and machine learning for predictive audience creation, modelling, data cleaning and processing, and probabilistic matching.
We’re also seeing publishers take interest in generative AI’s capacity to accelerate and personalize content production, with human staff overseeing and completing the job. AI can do some of the lifting on lower-level SEO writing, bolster production of sponsored content, and source background from the publisher’s content archives. With ad revenues dipping on account of economic pressure, publishers are actively seeking new workflow efficiencies and content initiatives simultaneously without cutting headcount.
IP law will establish new limits for AI crawling
While we’ve all heard chatter about AI displacing human creative talent, media companies have more leverage than they might appear from a slight distance. That human-created input that drives AI output is guarded by intellectual property law. Rights holders are pushing back, and we can expect to see more robust IP regulation, and even technology that protects content from being scraped by AI tools, coming into play in the near future.
But publishers shouldn’t simply wait for regulators to clear up these issues. That’s a path with unpredictable length and outcomes. At the top of publishers’ to-do lists should be bracing for shortfalls in search traffic, powering their data resources, and finding applications for AI to embolden content production. And Big Tech businesses should be forewarned: AI can’t be a higher priority than the sustainability of the digital publishing business that generative AI models depend on. An input of quality content makes the difference between useful output and unappealing nonsense.
In an increasingly crowded and competitive landscape, media companies are constantly seeking new strategies to increase revenue and customer loyalty. Bundling can play an integral part in achieving these goals. By combining multiple products or services into a compelling package, bundling can unlock new subscribers and revenue streams, as well as help reduce churn.
According to Meredith Kopit Levien, Chief Executive Officer of The New York Times Company, bundle subscribers pay more over time and are less likely to cancel. As a result, bundling can support strategies for customer acquisition and retention. Subsequently, it’s currently an area of growing strategic focus for many media companies.
Here are seven features that can strengthen your bundling strategy:
1. Make it financially compelling
You may not realize it, but you’re probably already bundling.Many publishers offer products, such as combined print/digital subscriptions, at a discounted price. These are often attractive to audiences due to minimal price differentiation, and dual access can improve their experience of your product(s).
For publishers, this also opens opportunities to sell advertising across both mediums. This can be especially valuable given the importance of print advertising, and the premium it can demand compared to digital.
The Seattle Times demonstrates this principle by offering a Digital +SundayDelivery subscription for the same price ($4.99 a month) as their digital-only package. Bundling in the Sunday print edition, complete with home delivery at no extra cost, is potentially very persuasive for readers.
Alongside appealing pricing, a further tactic media companies can deploy involves highlighting the benefits each subscription tier – or bundle – offers you.
In doing this, publishers typically point to subscriber-only content such as articles, newsletters, podcasts and events, or access to their archives. In many cases, this content is not available outside the requisite subscription bundle. And that’s a benefit that publishers are keen to emphasize.
Interestingly, the New York Times also utilizes a different approach, by stressing what you don’t have access to. This is most explicit for those accessing their news-only package (see below). The FOMO here is potentially very real, making an upgrade to “All Access” seem like good value.
It’s hard to say exactly what role this tactic plays in their continued subscriber growth. However, the company added one million new subscribers in 2022. Commenting on this, CEO Meredith Kopit Levien observes that “with each passing quarter, we saw more proof that there is strong demand for a bundle of our news and lifestyle products, hitting records on both total bundle volume and the share of new subscribers choosing the bundle.”
3. Prioritize building your stack
The cost of living crisis means that many people have less money in their pockets. To offset this, households are looking carefully at their expenditure and cutting back where they can. CNBC reports that Americans are more likely to cut back on groceries and gas than subscriptions. But this headline overlooks how low down the subscription food chain non-streaming content is.
Given publishers’ emphasis on reader revenue and subscriptions, this belt-tightening brings with it a certain vulnerability. To offset this, it is incumbent on media players to ensure that their offering is one consumers feel they cannot afford to cancel.
To help them do this, Greg Piechota, Researcher-in-Residence at INMA, suggests three ways media companies can add value to their bundle: build, buy or borrow.
Using The New York Times as a case study, he charts how the Gray Lady built Games and Cooking; bought The Athletic in 2022 (it costs $7.99 a month to subscribe to independently) and borrowed products in the form of a 2017 link-up with Spotify whereby new All Access subscribers also got Spotify Premium for a year. Bundling in Spotify for free (mirroring a similar initiative by The Times of London in 2014) arguably made their core subscription offerings more attractive to younger audiences. That means it may attract a new demographic of paying subscribers.
4. Flaunt your assets
Alongside the approaches outlined by Piechota, we should also add peacocking. Media companies with deep portfolios can prominently display this to potential suitors (i.e. subscribers) by creating bundles that tap into the sheer breadth of content at their disposal.
We have already seen this in the form of the Disney Bundle, which includes Disney+, Hulu, and ESPN+. These three content-rich services are considerably cheaper when purchased collectively. The “trio” bundle also comes with ad and ad-free versions too, another model that more publishers can emulate. (NB: ESPN+ comes with ads regardless of the package.)
In Europe, Scandinavian media giant Schibstedhas also put this notion into practice. They launched “Full Tilgang” in Fall 2022, a bundle of their Norwegian titles including national, regional and finance news, alongside magazines and their podcast platform PodMe.
For national subscribers, this regional and local content is a potentially useful value-add that they might not otherwise have consumed. It’s a model other companies might look to replicate. twipe reports that Schibsted is rolling out a similar model in Sweden.
Of course, not every outlet has the deep pockets – or the smorgasbord of content – enjoyed by The New York Times, Disney or Schibsted. Nevertheless, many outlets can deepen their bundles via partnerships.
These can come in a myriad of different forms. Digiday has outlined how partnerships with non-publisher brands – such as financial and educational institutions – are being employed by The Wall Street Journal and The Washington Post. Business Insider has also followed suit. In 2020 they offered holders of certain American Express cards a free 12-month subscription.
Tie-ins with other business and tech providers can also be seen. Major League Baseball has a long-standing partnership with T-Mobile, providing free subscriptions to MLB.TV (worth $149.99 a year) to T-Mobile subscribers. And in 2014, The Sun, a British tabloid, struck a deal with the UK mobile operator O2 to offer 02’s 4G customers content from soccer’s Premier League that gives them a glimpse of The Sun’s content which, in turn, might encourage some users to become subscribers.
It’s common for publishers to offer bundles with other titles in their stable. The Wall Street Journal offers a package featuring its Dow Jones stablemates Barron’s and MarketWatch. More interesting perhaps are partnerships with other content providers.
In the past, I’ve seen smaller outlets – like my local NPR affiliate KLCC –offer a free subscription to larger publications (like NYT and WaPo) as part of their membership model. For smaller players, this association may bring some extra cachet, or provide an additional incentive to nudge people over the line by taking out a membership or donating.
Even bigger players can successfully adopt this approach. The Weather Channel is a seldom talked about subscription behemoth, with over 1 million subscribers. It recently partnered with several organizations to offer bundles providing “companion subscriptions.” This trend may only become more prominent.
Looking ahead – where bundling might go from here?
And what of that future? Given the need for media companies to attract new audiences, as well as retain subscribers and maximize income from them, bundling will remain integral to reader revenue strategies. Here are two further ideas worth considering.
1. Explore different pricing models
In 2019, the advent of dynamic paywalls prompted Piano CEO Trevor Kaufman to ask, “Has AI brought an end to the metered paywall?”. New York Media and Neue Zürcher Zeitung (NZZ, Switzerland) are some of the outlets that have used this model, harnessing variables – such as your location, device type and browsing history – to determine when users hit the paywall.
Taking this to the next level, The Atlantic recently started using this technology to shape the price of their bundles. Dynamic pricing can be used when signing people up and for retention. For the latter, prices for renewal are determined based on the probability of a subscriber’s subscription lapsing.
“It is a concept worth exploring,” suggests Subscription Insider, although they stress the “biggest risk is how consumers will feel if or when they find out about it.” How will consumers feel if they get different prices to sign-up (or stay), each time they click on the site?
At present, audiences are at the mercy of bundles offered to them by publishers. But what if it were possible to build your own bundle?
Let’s say I just want the newsletters and audio provided by The Economist? Or I want to bundle The New York Times’ Cooking and Games subscriptions, getting them for less than two individual subscriptions?
Similarly, if I have a $25 a year standalone subscription to Politics with Charles P. Pierce on Esquire, what If I could cherry-pick additional elements to bolt onto my politics subscription?
I cannot do that at present, and this type of choose-your-own-adventure model might be technically tricky. However, personalization could enable me to subscribe to content by topic, writer, location, beat, or sports team that matters to me.
Of course, it may risk cannibalizing the take-up of other more expensive bundles. However, it might also hold strong consumer appeal, especially those for whom existing packaged offers are not compelling enough.
Moving forward, bundling is here to stay, supporting subscription strategies by playing a role in consumer attraction and retention.
Fundamental to this is making your bundle attractive and distinctive from your competitors. Subsequently, adding value to the bundle may well shape acquisition strategies, be that for talent (and the newsletters and podcasts they may front) as well as other properties.
At the same time, consumers need to be attracted by price and value proposition, this includes access to content and services they may not currently consume, but might if it’s bundled in.
The use of free trials, as well as partnerships with other media companies and brands, can be a way to get a customer’s foot in the door. Meanwhile, dynamic pricing and opportunities for personalization could become key tools to keep them there.
By bundling multiple products or services together, publishers and media companies can offer greater value to customers and increase subscriptions. There’s no hard and fast way to do this, but these seven steps demonstrate how all publishers can potentially use bundling to drive revenues and improve customer loyalty.
/ An inside look at the business of digital content
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