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Perspectives

DCN’s must reads: week of February 1, 2024

Here are some of the best media stories our team has read so far this week:

Video

What the US and Europe TV markets can learn from each other

In an increasingly global market, it is vital to recognize that, while Europe and the U.S. may have many similarities, they also have notable differences. The good news is that there’s a lot to learn from these differences. No matter what your perspective, the “television” space is growing more complex by the day. Applying one world view to fundamentally different markets is a recipe for failure. Thus, it is critical that media executives realize the world is not black and white but consists of shades of grey.

When we talk about television, what we mean by “TV” can vary dramatically, depending on geography, distribution service, device and – increasingly – the type of content being viewed. These variations are critical to understanding opportunities in this space. For the purposes of our discussion here, “TV” includes but is not limited to: 

  • Over-the-air (OTA) broadcast channels
  • Cable & satellite-delivered channel
  • +s
  • FAST channels
  • SVOD services

All of the above may be accessed on mobile devices, laptops/desktops, and connected TVs. They are the primary (and most lucrative) content delivery formats for both traditional and new content creators and aggregators, who are most likely to be interested in our analysis. 

A key component of the challenges now faced by media companies is a false assumption that “one size fits all.” As we explore the strategic complexity of the streaming television market, compounded by the acceleration of AI integrations, taking a “one size fits all” approach is particularly risky.

Instead, each media company must clearly evaluate and understand its strengths and core competencies, and what these mean when moving in a new direction. In order to remain viable, it is imperative media players have the confidence to try new tactics. And, to truly innovate, they also need to get comfortable with the possibility of failure (as the tech industry has been).

The five key strategic questions

As they decide their next steps, media executives should be focused on five key long-term strategic questions:

  1. How can you prepare your media business for success and survival in a rapidly-changing, highly competitive environment?
  2. How can you attract and retain talent?
  3. How can you serve your current customers and acquire new customers?
  4. How can you grow revenue and profitability, sustainably?
  5. And, finally, what exactly is your end goal?

Streaming lessons the United States and Europe can learn from each other

What we present below are six key – deliberately brief – lessons that U.S. and European media companies can learn from each other as they develop and evolve their offerings in the global streaming TV marketplace.

Lesson #1: Ask the right questions

The number one lesson that European media companies can learn from the U.S. is that many major media companies neglected to ask those five questions soon enough. That particularly seems the case when it comes to the last question: The strategies of most of the major U.S.-based streaming companies seem to lack a clearly defined end goal. But the good news is that it’s not too late. In fact, late movers have an opportunity to learn key lessons from the U.S. streaming market and thus serve viewers more effectively.

Lesson #2: Understand the market

One of the major mistakes that the mainly U.S.-based SVOD streaming services made (at least up to now) was the assumption that the world looked like the United States and would act the same way. A study of the history of the U.S. and European television markets would have made it clear that, when it came to paying for television, both markets had fundamentally different characteristics.

For example, Americans are used to paying $100 or more for their television, Europeans are not. Also, European pay-tv penetration has typically been 30 to 40% lower than the U.S. (even lower in some markets). Europeans prefer national language content and use free to air content more. When it comes to streaming, both sides need to first understand the structure of their markets and then work out what solutions work best.

Lesson #3: Media tech is a long-term investment

Technology has forever changed the game for media, and every player in the content value chain needs to become tech-savvy. This means continuously educating oneself – and one’s team – on new developments in technology. AI is a perfect example of a technology that has already impacted media (and will continue to do so). And yet, many major media players still think that AI is something for their tech department or even a new “Chief AI Officer” to manage rather than something about which they personally need to invest time learning and educating their entire teams about.

It’s imperative to everyone in a media company – senior or junior – to understand how mass market consumers connect using technology. For example, have they experimented with writing a ChatGPT or Midjourney prompt? Have they recently visited Walmart, Best Buy or Amazon to learn how most consumers purchase a TV, and thus come to have built-in, bundled access to their products? Do they have TikTok accounts? YouTube, Facebook, Instagram, Twitter, or even LinkedIn? And so on. Technology is a constantly evolving space, both in terms of innovation and consumer behavior. Staying connected to these changes will allow media leaders to make better short-term decisions and long-term investments in their business.

Lesson #4: Do what you do best

When faced with the dominance of Netflix, instead of doing what they did best, many U.S. media companies simply tried to do what Netflix did – but not as well. This approach hasn’t made a significant dent in Netflix’s market dominance, which is measured as present in two thirds of U.S. households, according to Kantar, with 49% in 2023 viewing it as their most important streaming service.

While this short-term strategy has floundered, the top U.S. media companies have a) strong, resilient brands, b) expertise in creating world-class content and content pipelines and c) the best deal-making skills Hollywood can teach. So, their potential remains strong. The same holds true for European media players. If you aren’t U.S.-based, don’t assume that your media company should follow the same strategies as the U.S.-based media giants. Nobody wants or expects your company to be the next Netflix. Instead, your company should be the next version of itself.

Lesson #5 – Don’t lose sight of the bigger picture

CEOs and corporate boards face a multitude of pressures when it comes to decision making. They must actually run their companies and navigate continually changing sectors and wider trends. And, in most cases, they must do so under the scrutiny of shareholders who have a multitude of short and long-term interests. What management must not do is panic.

For European companies, one area this particularly relates to is the treatment of linear television. There is no doubt that linear television faces challenges, yet European executives must also be wary of writing off the medium. While viewing for “traditional” television in the U.S. hovers just above 50%, linear television programs still dominate the schedules in virtually all major European countries. That reflects both the history of how television developed in these respective markets and the demographics involved. Linear can still be a powerful tool for advertisers in Europe in a way that is becoming increasingly challenged in the United States.

Lesson #6: Be humble

Media executives must not fall into the trap of thinking that, just because they view the world in a certain way, then that will be representative across the population of their market, much less the globe. That kind of thinking can lead to severe business consequences. It is good business sense to recognize you do not know everything and act accordingly. If there is one lesson that can be said to be applied equally across both Europe and the United States, it is this one.

The bottom line

The bottom line is that whether European or U.S.-based, media companies are not in need of a one-time strategy implementation or new product launch. As our six lessons illustrate, these companies need flexibility of thought and to be prepared to accept the realities on the ground, instead of implementing “one-size fits all” strategies. As we move into a new phase of hybrid traditional TV-streaming business models and assess how to integrate AI, this is particularly important to keep front of mind.

Industry-Research | Revenue

Cancellation strategy is an essential piece of subscriber retention

As the industry increasingly incorporates subscriptions into diversified revenue strategies, media companies need to take a fresh look at their subscription cancellation processes. Not only do customers expect streamlined cancellation processes, smart companies conceive of cancellation as a critical aspect of an effective retention strategy. And all companies must be aware of changing regulations around facilitating the cancellation process.

In a new INMA report, Using Subscription Cancellations to Retain News Customers, Robert Skrob (author of the book Retention Point) cancelled subscriptions with 14 of the world’s largest English-language news media publishers in one week to experience and analyze their processes.

Using these experiences, Skrob outlines which companies are making it simple to cancel, which ones are making it difficult, and which ones offer lessons worth learning. With specific examples of what they’re doing right and what they could do better, Skrob offers an insightful look into the experience of subscribers as they try to cancel, which will help media companies design processes that leave audiences with a positive impression or – even better – convince them not to leave.

Building a retention-based cancellation process

Through his work, Skrob has found that many media companies have not developed the kind of cancellation process that is designed for retention. He finds that cancellations are an often-neglected aspect of the media business, relegated to accounting or administration. He suggests moving this function to the marketing department as an aspect of subscriber-retention.

Many media companies have created complex or opaque cancellation processes designed to dissuade unsubscribes. The effectiveness of this approach is the subject of some debate. However, the FTC has proposed the “click to cancel” rule, which would require companies to allow consumers to cancel their subscriptions in the same way, and just as easily, as they subscribed in the first place. So, whether companies like it or not, it’s time to develop easy cancellation processes that may actually improve retention.

While many types of subscription-based businesses have pushed back on this requirement, Skrob believes that there are tactics that can be incorporated to reduce the likelihood of churn. For one, companies can do a better job of communicating the benefits and value of subscription to audiences. For example, The Financial Times includes a “before you go” message which outlines exactly what subscribers lose when they cancel. The Telegraph cancellation process also includes a page that demonstrates the value of the exclusive subscriber benefits and explains what the subscriber will lose after cancellation.

Giving would-be cancellers an offer to stay increases retention, according to Skrob. He finds that upsells work better than downsells in terms of recurring revenue. He also suggests that, if you don’t have an upsell, that you consider offering a lower-priced subscription tier to retain customers.

If a customer does in fact cancel, it is important to send them a confirmation of cancellation so that they know that they’ve completed this step successfully. However, even this confirmation should be viewed as an opportunity to reengage. This, as well as communicating transparently their remaining subscription benefits and duration of subscription until cancellation is finalized, works towards building trust. And that trust will pay off as you work to regain them as a subscriber.

Case studies and a case for improved cancellation strategies

Based upon his research, and case studies examining the best (and some not so great) practices from the media companies’ processes he investigated for the report, Skrob makes a solid case for  investing marketing time and energy into your subscription cancellation processes. Yes, this can positively impact subscription retention and revenue growth.

However, the report also builds out the connection between these processes and improving audience trust – something the media industry has struggled with for some time. As Skrob explains, creating cancellation processes with skill and integrity can grow trust for your brand. Cancellation management is a critical piece of subscription growth which in turn will enable your media company to invest more in the products you deliver, and help grow a sustainable media industry.

Perspectives

DCN’s must reads: week of January 25, 2024


Here are some of the best media stories our team has read so far this week:

Industry-Research | Innovation

Everyone’s talking about GenAI. But who’s really using it?

The topline: As Generative AI dominates media industry conversations, it is important to understand consumer and worker sentiment and adoption to guide the development and implementation of GenAI tools.

As 2024 unfolds, Generative AI (GenAI) tools will increasingly be embedded into everyday digital products and services, as well as within the workplace. As the digital media landscape evolves and is shaped by the impact of these tools, a growing body of research sheds light on how consumer interest and adoption trends vary by demographic. 

Interest in GenAI tools such as ChatGPT, Bing chat, DALL-E, Midjourney, and Snapchat My AI, differs significantly among generations, genders, and nationalities. Studies find younger users out in front of adoption – but with uneven patterns along gender lines. Globally, interest in GenAI tools varies among countries based on type of media (text, audio, image, or video).  

Newsroom leaders and workers in general increasingly use GenAI tools, and report positive expectations for future productivity. However, even these “pro” users have concerns, and workplace policies and guidance lags usage. The following takeaways offer insight for digital media professionals as they shape their GenAI strategies, both internally and for consumer facing products.  

Young users more avid – and more worried 

A recent Ofcom study of people in the United Kingdom aligns with prior research finding Gen Z and even younger children at the forefront of GenAI adoption. The study found 79% of online teens 13-17 and 40% of online children 7-12 using GenAI tools, compared to 31% of adults overall, and only 14% of adults over 44.  

However, while the UK teens surveyed were more avid adopters of GenAI, they were also more likely to express concern about it. 67% of 16–24-year-olds surveyed expressed concerns about the societal implications of GenAI, compared to 58% of all respondents. One possible implication is that users more familiar with the power of GenAI are also more cognizant of its potential dangers.  

Gender differences in GenAI adoption 

The Ofcom study found that SnapChat My AI, which became free to all SnapChat users in April of 2023, has widely been embraced by users, especially teenage girls. In contrast, far more boys than girls report using ChatGPT. Overall, OfCom reports indicate that significantly more online males than females use GenAI tools, making the female preference for SnapChat MY AI all the more noteworthy. As Snapchat My AI became embedded within users’ prior social media accounts, ease of use and syncing with social habits may have boosted appeal for girls. 

  • 75% of teenage girls use SnapChat My AI, compared with 51% of all users ages 7-17. 
  • 34% of boys ages 7-17 report using ChatGPT, versus 13% of girls in the same age range. 
  • Overall, 39% of men (16 and up) use GenAI tools, versus 24% of women in the same age range, according to the OfCom survey. 
  • 69.5% of overall GenAI users were men, 30.5% women, according to a usage analysis of the top 50 AI tools online by Writerbuddy. 60% of the visits to the top 50 tools were to ChatGPT. One tool used almost as frequently by women as men was CapCut, a video-production tool.  

Some theorize that gender disparity in the tech sector led to earlier adoption of GenAI tools among males. However, as such tools become more embedded in products and services people already use, like SnapChat, we may see equal engagement among females. 

Globally, interest in GenAI varies widely by media (whether the material generated is in the form of text, imagery, video, or audio). Maps created by ElectronicsHub reveal that, across all popular tools, the Philippines, Singapore, and Canada lead the world in GenAI interest (as measured by search volume per 100 k residents).  

The Philippines clocked 5,288 searches per 100 k of its population, compared to 2,213 in Canada. The United States trailed Canada at 1,187. The United Kingdom fell between Canada and the U.S. at 1,546. However, preferences for certain types of tools varied by country and region.  

  • The Philippines, Singapore, and Canada topped the interest in text-generating services such as ChatGPT and Quillbot. 
  • Israel led interest in image-generating tools (such as DALL-E 2 and MidJourney) with 311 searches per 100 k in the country’s population.  
  • South America showed a strong interest in audio-generating tools such as FakeYou and VoiceGPT. Urugay topped the global list at 230 searches per 100 k population, followed by Chile and Argentina.  
  • Video-generating tools were most popular in Singapore (57 searches per 100 k), the United Arab Emirates, and Cyprus – all of which led over Canada, the UK, and the US.  

U.S. workers embrace GenAI tools 

Over half (56%) of 1100 United States workers surveyed reported using GenAI on the job, according to the research by The Conference Board. Ten percent reported doing so daily. Most of the respondents were office workers so popular uses include drafting written content, brainstorming ideas, and conducting background research. Of those using GenAI at work, most reported positive outcomes, and had optimistic expectations.  

  • 63% of employees surveyed believe using such tools increased their productivity.  
  • 33% expect AI to replace elements of their job in a beneficial manner, such as freeing time for more conceptual and creative work by speeding routine tasks.  

Lagging the enthusiasm is robust guidelines and policies around the use of GenAI in the workplace. Only 26% of those surveyed stated that their company currently has policy in place, while 23% say policy is under development. 

News leaders anticipate GenAI advantages 

Newsroom professionals also anticipate advantages in using GenAI tools to improve efficiency and tailor content. In a recent survey of 314 media leaders in 56 countries by Reuters Institute, news executives predicted GenAI would be useful in back-end automation work such as transcription and copyediting, as well as distribution, commercial applications, and content creation with human oversight. They believe GenAI tools will help support investigation work, fact-checking, and verification. Productivity gains around use of GenAI in coding have been significant. 

However, over half of those surveyed expressed concerns related to GenAI use in content creation and over a quarter had concerns about its use in newsgathering. Concerns centered around impact on reputation and public trust, as well as protection of intellectual property.  

Newsroom leaders face the challenge of shaping policies around the use of GenAI tools. This includes designating senior editorial staff to oversee use and strategy. But Reuters’ Changing Newsrooms 2023 report found only a minority have acted thus far.   

  • 16% of news leaders have a designated AI leader in the newsroom.  
  • 24% are in the process of establishing a designated AI leader. 
  • 16% have detailed AI guidelines in place. 
  • 35% are working on establishing detailed guidelines. 

Opportunity for leadership 

Ethics and policy around the use of GenAI is sure to be a hot topic in 2024, as users express concern about ramifications and look to media leaders for oversight. The World Economic Forum strongly recommends a proactive approach to GenAI governance and risk management.  Since this is an area where many companies lag, it represents an opportunity for forward-thinking media executives to lead. 

Featured Post | Revenue

4 media revenue strategies for 2024 (that don’t involve AI)

2023 was yet another rocky year for publishers. From the ad market slowdown to economic pressures affecting everything from hiring to subscriptions, there was plenty to write about for Media Voices’ annual report, Media Moments 2023.

AI was, of course, the headline trend. It has the potential to impact almost every aspect of the media business, and many commentators have speculated on how it can and will shape the coming years. There’s not a media executive out there who isn’t actively watching AI, if not experimenting with it.  But AI isn’t the only trend influencing day-to-day publishing operations. Here are four more surprising things some of the industry’s most successful media brands are doing, all of which are covered in more detail in the Media Moments report.

Consolidating newsletters

Wait, aren’t newsletters the current big thing? Aren’t we supposed to be launching lots to make up for the impending death of social media and search traffic? Not necessarily, as some publishers have demonstrated. As with so many things, it turns out that less may deliver more. 

The New Statesman is one such publisher. They consolidated their portfolio of economics, culture, politics and world news newsletters into just two: a daily and a weekend edition. “Instead of having a whole buffet of different newsletters and cutting the brilliance up into little segments, we just decided to give [the audience] one that we thought they’d like on Saturday and have the power of a big audience through one newsletter,” head of newsletters Harry Lambert told Press Gazette.

News publisher The Telegraph has a whopping 34 newsletters. However, head of newsletters Marie Bonheim told Peter Houston that their portfolio is under constant review. Despite the urge to “fill every niche” there is a danger of spreading your newsletter efforts too thin. “You also don’t want to double up on the same content,” she explained. “We merged a few fashion and beauty newsletters into a single, daily lifestyle newsletter.”

Undoubtedly, streamlining does more than reduce the amount of products that need to be produced, it may also serve to improve reader numbers for the remaining products, which can in turn drive revenue. 

(Re)launching print magazines

Mass market magazines have continued to battle decline, with just two news and current affairs magazines in the UK posting circulation growth; satirical fortnightly Private Eye and political monthly Prospect. But for more niche titles, publishers are seeing an opportunity in low volume, high value print runs.

We saw multiple stories of print revivals and launches in 2023, from fashion title Elle Australia and music magazine NME. A piece in the Sydney Morning Herald showed that readership of popular titles like Vogue Australia and Marie Claire had increased between 2022 and 2023. Jane Huxley from Are Media, which publishes Elle, said that there were two main factors behind the renewed interest in print; the enduring brand strength of these magazines in tough economic times, and a consumer reaction to the “digital deluge.”

Advertiser interest in print appears to be on the rise too. Recent research suggests a strong preference for print advertising among consumers, with readers far more likely to pay attention and trust it in contrast to online advertising.

But the approach of newly launched or relaunched magazines will be different. Copies are more expensive and printed less frequently. The new NME will be £10 every other month, and not available on newsstands. “Rather than print thousands upon thousands of copies and try to shift them at the newsstand in bulk, we’ve changed that model up and have taken inspiration from industries like fashion, where you see the value in scarcity,” Holly Bishop, of NME Networks told New Statesman.

Print isn’t going to be right for every media company. But it can be effective as a higher-priced premium product; something special to deepen relationships with super fans.

Paywalling podcasts

As the frenzy for podcast launches finally dies down, publishers are looking long and hard at the most effective ways of monetizing them. For The Economist, that involved taking the bold decision to put a paywall in front of its entire portfolio bar one (the daily flagship podcast The Intelligence will remain free). The rest of their 18+ shows will be available as part of a full Economist subscription, or as a standalone Economist Podcasts+ offering for $4.90 a month.

Claire Overstall, SVP, Global Head of Customer at The Economist told DCN in October that they had moved the podcasts to a paid offering in keeping with their belief that subscriptions should be the way they fund their journalism. 

“Paying for journalism was one of the things that we led with very early; The Economist has been doing that a lot longer than many of our peers,” she said, acknowledging that although paid podcasts aren’t commonplace, the reasoning is understood. “So that’s well-embedded in people’s minds, the way that we’ve articulated how this is supporting our journalism.”

It’s a risky move for a publisher with millions of listens across its podcast portfolio. But as tools to make the subscription process for podcasts smoother and more aligned with publisher sites improve, it’s likely we’ll see more premium brands give paywalled podcasts a shot.

Paying for podcasts may take listeners time to get used to, so companies trying this shouldn’t expect instant results. But paying for good content is increasingly normalized and (grudgingly) understood by audiences. So, it’s worth thinking about how paid podcasts could fit into a long term strategy. 

ARPU over subscriber numbers

It’s hard to point to a subscription service which hasn’t raised its prices over the past 12 months. Even Spotify, which had kept its pricing the same since 2011, increased the monthly cost by $1-$2 across its tiers. In the publishing world, the price of a digital news subscription has actually increased an average of 19% in the UK.

There are multiple intertwined reasons for this trend. News fatigue and economic pressures are contributing to a subscription slowdown. In addition, after a rush to subscriptions during the pandemic, many publishers are hitting a natural plateau anyway. Inevitably, attention is now turning to retention and reducing churn.

“Subscriptions are a forever business,” wrote The Rebooting’s Brian Morrissey. “Everything in publishing takes longer than you would think. And building a subscriptions business is the ultramarathon. After early wins, subscriptions become a grind, with optimization tactics coming to the forefront.” 

The Atlantic’s CEO Nicholas Thompson noted back in 2022 that he was less interested in getting a million subscriptions than he was getting to $50 million in reader revenue. “You can get to a million subs pretty easily – you can massively discount,” he said. “If you set a goal solely on subscribers, it can move you in some harmful ways.”

Defector was a good example of this more sustainable focus this year. In their third annual report, they listed a subscription revenue increase in 2023 of just 4%, when compared with 20% a year earlier. But they also managed a 90% retention rate when half of their subscribers came up for renewal.

It’s tempting to get sucked into the race for big numbers, many of which are achieved through hefty discounting. A longer-term, more sustainable view is definitely focused on metrics like retention and engagement, and making sure subscribers are satisfied with what they’re paying for.

Going forward

This isn’t to suggest that you should be immediately scrambling to reduce the number of newsletters sent, or to start flatplanning a magazine! As we found from the Media Moments 2023 report, many of the biggest challenges and opportunities publishers have faced this year have been iterations of what we’ve seen in previous years. 

These trends point towards something AI cannot replicate: creating valuable content that (human) readers will be willing to pay for. Whether that be in cycling, cooking, fitness, politics or B2B, doubling down on quality and looking at ways to increase the value of what you’re producing is a winning strategy for 2024 and beyond.

Perspectives | Uncategorized

DCN’s must reads: week of January 18, 2024

Here are some of the best media stories our team has read so far this week:

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Diversity, Equity & Inclusion | Industry-Research

Newsroom diversity fails to keep pace with the population

Building a diverse newsroom and delivering inclusive content is essential for ensuring the success of a media platform, according to the World Economic Forum. Diverse newsrooms better represent the variety of perspectives and experiences within society and are likely to create content that appeals to a wider audience base. Unfortunately, today’s newsrooms have a way to go to achieve diversity objectives.

A two-year study, The Damned Pipeline: U.S. News Industry’s Broken Parity Promise from the National Association of Hispanic Journalists (NAHJ), explores the diversity of 22 major news organizations nationwide. The report findings show an underrepresentation of racial and ethnic cohorts among investigative teams and editors ―with an overwhelming prevalence of White news reporters (60%).

By contrast, Latino reporters comprise only 13% of investigative reporters but represent 19% of the U.S. population. Similarly, Black reporters comprise 9% of investigative teams, compared to their 13% share in the overall population. The survey also indicates that Indigenous reporters constitute fewer than 1% of investigative staff. On the other hand, Asian American and Pacific Islander (AAPI) reporters show a different trend, representing 11% of investigative staff compared to their 6% share in the population.

The report notes that traditional corporate newsroom managers need help establishing a culture that effectively mentors and recruits reporters of different ethnic and racial backgrounds. Regarding the actual employee count of nearly 180 investigative reporters, about two dozen are Latino reporters, 19 are AAPI reporters, 15 are Black reporters, and two are Indigenous reporters.

Further, the need for more diversity is even more pronounced among editors. There are only seven Latino investigative editors, three Black investigative editors, two AAPI editors, and no Indigenous editors among the survey respondents.

The study shows progress in gender diversity ― 44% of reporters and 46% of editors identify as female.

Newsrooms pursue staff diversity

Some newsrooms are taking initiatives to prioritize diversity and ensure a more inclusive representation of different races, genders, ethnicities, and perspectives in their news reporting and decision-making processes.

Associated Press: The Associated Press (AP) revamped its investigative team over the last few years. They focused on broadening the concept of investigative reporting by non-specialists to develop investigative skills among more diverse staff members. The AP introduced inclusive hiring practices, mentoring programs, and internal fellowships. AP also established an investigative correspondents program, a six-month internal fellowship, and other mentoring opportunities.

ProPublica: Newsroom leaders at ProPublica focus on metrics, holding themselves accountable to increase the diversity of the reporting staff. Their initiatives include extending searches for diverse talent, an Investigative Editor training program, and increasing fellow salaries to $75,000 to attract a more diverse candidate pool.  

Los Angeles Times: The Los Angeles Times engaged with the NAHJ Task Force two years ago. At that time, racial and ethnic reporters comprised one-sixth of their investigative team covering a highly diverse metropolitan area. By September 2022, the LA Times announced the addition of three reporters to enhance its investigative team’s diversity in terms of gender, race, and ethnicity.

As the U.S. undergoes demographic shifts, it’s crucial for newsrooms, especially in specialized areas like investigations, to evolve accordingly. The task force views the survey and dialogues as initial measures in fostering industry accountability. NAHJ aspires to gather more newsroom partners in their ongoing commitment to mirror the evolving demographics changes in the U.S.

Perspectives | Revenue | Supporter Spotlight

When creative and commercial work together, digital media thrives


The news industry has (finally) woken up to the idea that paying for journalism is a longstanding and effective strategy that must transition from print to digital. Over the past several years, there has been a push to establish reader revenue models which promise the annuity revenue and stability that digital advertising cannot.

While paid-for content is absolutely correct as a concept, the execution is far more difficult. One of the reasons for this is a real fear of trying to tackle and change editorial workflows, cadence and practices to service a digital, willing-to-pay audience. 

The universal truth in news organizations globally is the “separation of church and state.” There is no doubt that editorial integrity should be protected at all costs. But in this modern world the notion that newsrooms should have little or no role in commercial endeavors – including subscription growth – is becoming increasingly obsolete, if not completely counterproductive to sustainability and growth.

As newsrooms become more representative, younger and dynamic and we pay more attention to audience diversity, there is no place for static thinking about our place in the world.

The FT’s subscription engine room

The Financial Times most definitely experienced more change in the past 20 years compared to the preceding 125 years. The advent of the internet, the iPhone, and high-speed connections completely disrupted our distribution channels and our users’ reading experiences. These digital forces also radically shifted the course of the fundamental business model of newspapers – ours included.

Across the industry, print has been in long-term decline for more than 20 years now, and advertising growth has been elusive for almost as long. Very little of our past business remains intact.

At the FT, we’ve benefited from visionary leadership that bit the bullet many years ago. We worked extremely hard (and still do) to build and grow a successful digital business in both reader revenue and carefully considered advertising strategy that has seen digital ad revenues double in the past three years. And it must be said that the development and implementation of this strategy very much included our editorial leadership and cross-departmental input.

Some of the most exciting digital product innovations that have engaged readers of the FT in updated ways are collaborative efforts that include or are driven by editorial. example this “Draw your Own Chart” from the Visual storytelling team and this fantastic visual explainer on AI offer subscribers more creatively engaging ways of getting the information they need. And the launch of FT Edit increased reader revenue by providing an option for audiences that might not otherwise be willing to pay for a full subscription.

Indeed there are vastly different conditions in this new era. So, keeping the engine room of news companies entirely isolated from commercial reality is simply not good for business. At the FT, revenue ideas may come from editorial, as in the case of FT edit, or be driven by commercial EXAMPLE.

As much as we lament the decline of print and advertising and blame the rise of social media and platforms for our woes, much of the news industry is suffering from:

  • A built-in “church and state” stress fracture in our businesses and the industry as a whole
  • Siloed thinking and an inability to collaborate effectively or to think outside the box
  • An unwillingness and genuine fear to try new things and experiment
  • Suspicion of commercial colleagues – a damaging “us and them” mentality
  • Product, engineering and technology teams falling on the commercial side of the fence and an often unhealthy tension between product and editorial

At the Financial Times, we have found that a closer relationship between commercial, editorial and technology can only result in revenue growth in the long term. It is also vital to carefully pick the people who can make this happen. They are the glue that holds an organization together.

There was a session at The Audiencers event in London about bridge roles and how important they are in newsrooms. Panel participant and consultant Dmitry Shishkin has made very good observations about how wonderful things happen when product and content come together.

Reader revenue models help newsrooms transform digitally

The establishment of reader revenue models (subscription or membership) at so many news organizations is positive not only for revenue generation but also for the toughest challenge of organizational and cultural change.

A paywall has a galvanizing effect on journalists who don’t want to see their hard work going on a website for free. For newsroom leaders, it helps with adjusted workflows and better copy flow to publish valuable journalism with a clear value proposition for readers.

Reader revenue strategies are entirely in lockstep with quality journalism, and not with the high-volume game of clickbait and churnalism. More importantly, for a paid model to be truly successful it will be enormously strengthened by the input and commitment of all: and this means editorial too.

On the other extreme, organizations that have not integrated their digital and print operations can suffer from related labor issues. “Print staff” may even actively campaign against transformation initiatives. This might take the form of refusing to do any digital publishing, not attending digital training, treating digitally skilled staffers as inferior, the list goes on. And this puts organizations in a tough spot.

The answer at this point is very simple: strong leadership. In a recent study, created in collaboration with the Google News Initiative, we found that leadership is a pivotal factor for sustainability and the growth and success of news organizations.

It is this trust and leadership from editors that will ultimately make the difference in the long-term fortunes of news organizations. A successful integration of print and digital, and bridging the creative side of the organization with the commercial, comes down to a clear, unified vision for success. 

Print is and will remain a premium product with a definitive market niche. But to ignore the commercial realities – and digital opportunities – of our industry is to be no better than the band leader on the Titanic. Success lies in a common goal and purpose and having all staff in the same lifeboat and pulling in the same direction is the only way to leverage growth and guarantee sustainability.

About the Author

Lisa has over 25 years of experience in print-to-digital transformation, most notably at the Financial Times where she led newsroom operations, was an Assistant Editor and Managing Editor, Associate Editor and Head of Operations for FT.com. She led group-wide digital transformation projects at both of South Africa’s biggest publishers, Tiso Blackstar (now Arena Holdings) and Naspers’s 24.com.

Featured Post | Innovation | Policy | Revenue

Three trends that will shape media strategy in 2024

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

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

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

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

2024’s major media trends

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

1. Revenue diversification is more important by the day

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

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

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

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

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

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

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

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

2. AI remains in the spotlight

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

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

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

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

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

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

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

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

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

3. Audience development grows in importance

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

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

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

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

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

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

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

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

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

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

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

A strategic path forward for digital media

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

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

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

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

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

Perspectives

DCN’s must reads: week of January 11, 2024

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Diversity, Equity & Inclusion | Industry-Research | Innovation

Flexibility is the new norm in newsrooms



News organizations worldwide are adjusting their operational approaches in response to external shifts and internal dynamics. Reuters Institute’s annual report, Changing Newsrooms, explores these evolving newsrooms. They gathered insights from surveys and in-depth interviews with 135 senior industry leaders from 40 countries worldwide. The respondents include editors-in-chief/executive editors, CEOs, managing editors, and other senior positions in editorial, audience, talent development, and commercial.

Reuters’ research reveals a notable trend in adopting flexible work models among newsroom leaders, with 65% implementing varying rules. Within this landscape, 15% of the sampled organizations extend complete flexibility to employees, allowing them to choose their work location and work from home. However, a more common scenario shows half of the sample (52%) offering only some flexibility to their employees.

Approximately 30% of participants noted that their organizations require employees to be in the office on specific weekdays with strict enforcement. However, 22% report no active monitoring to verify adherence to this policy. Notably, 38% of respondents express concerns about a weakened sense of belonging due to hybrid and flexible working arrangements.

Like last year’s findings, many survey participants believe the shift to hybrid and flexible working has had a limited impact on productivity. Specifically, 48% express that productivity has remained unchanged, while 26% believe it has increased. Notably, a minority of 19% indicate that flexible and hybrid working has decreased productivity.

Retiring “hybrid work” and embracing flexibility

The report cites Brian Elliott from Future Forum advocating for retiring the term “hybrid work” in favor of embracing a more “flexible” approach. He emphasizes that employees seek the freedom to work where and when they perform best—a blend of team collaboration and individual autonomy. Many companies, he notes, opt for simplistic solutions rather than restructuring their practices for a truly distributed workforce.

AI adoption and adaptation

The research also explores how global news organizations adapt to external changes and internal dynamics, focus on talent strategies, and cultivate inclusive cultures. Three-quarters of respondents (74%) believe generative AI will enhance productivity without fundamentally changing journalism, while 21% foresee transformative effects.

Regarding establishing high-level principles governing the use of generative AI in news organizations, just over one-third of respondents (39%) mentioned that their organization is actively developing these principles. In comparison, 29% already have some guidelines in place. One-fifth (21%) stated that they are contemplating such principles but have yet to implement them.


Although a considerable number have either developed or are in the process of developing high-level principles, only 16% have detailed guidelines in place for the specific use of generative AI. Thirty-five percent are currently working on formulating these guidelines, and 30% are in the consideration phase.

Diversity challenges and strategies

Challenges persist in navigating the evolving newsroom landscape. While 90% feel their organizations excel in gender diversity, numbers drop for political (55%), disabilities (54%), and ethnic (52%) diversity. Further, 43% have a systematic strategy for diversifying talent acquisition, but systematic approaches are less common for retaining talent and reflecting diversity in stories produced.

Diverse talent acquisition remains a significant challenge, cited by 57% of respondents. Retaining diverse talent, prioritizing diversity, and understanding its value are additional hurdles. The report underscores the need for structured plans to address these challenges systematically.

This research provides a comprehensive snapshot of the evolving newsroom landscape: flexible work models, generative AI, and diversity initiatives present challenges and opportunities. As news organizations adapt to external forces, the report highlights the importance of flexibility, strategic planning and systematic approaches to foster an inclusive, innovative newsroom culture.

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