10 ideas for an economically-sustainable and plural digital journalism
These are fascinating times for the media industry. The digital revolution has brought a myriad of changes and opportunities for content creators and readers.
Publishers are confronted to multiple and multiform challenges, at all levels of the value chain. If it is true that equally revolutionary challenges happened when the radio and broadcast technologies were introduced last century, we must recognize that the digital revolution has kicked in at an unprecedented pace.
These digital challenges are generally well known, but it is worth doing a quick round up of the main ones to help contextualize possible solutions.
- The proliferation of content available at any time on any device has made it difficult for professional publishers to maintain the level of loyalty and user engagement they used to thrive from in the past. The growing power of social platforms and aggregation apps has eaten on the time readers and viewers used to spend on publishers’ owned and operated properties, which impacted their ability to generate revenue.
- Over the last few years we have witnessed the emergence of many digital publications whose business and content strategies are based on curating or re-writing stories originally published by other media organizations. These new players have mastered the art of search engines and social optimizations to get to readers and viewers first. Add to this new competition the fact that mainstream users have gotten use to accessing content for free, and you get a poisonous cocktail of both advertising and subscription revenue streams going down, making the cost of quality journalism difficult to sustain.
- Digital publishers have failed to deliver a satisfying advertising experience for their audience. Encouraged by a thriving and quite chaotic ecosystem of hundreds of ad tech companies and creative agencies, publishers have trusted that rich and large advertising experiences could be a sustainable response to their decrease in offline revenue and ARPU. This led to the development of unsatisfying advertising and content consumption experiences. Users have rebelled, leading to the continuous growth of ad blockers (up to 25% usage in some Western European countries), which ate further more on publishers’ revenue.
- Since the 1990s, digital companies have worked hard to convince advertisers that online advertising was more rewarding than advertising offline, promoting multiple benefits like low implementation costs, the ability to track performance in real-time and the possibility to only pay for “guaranteed return” and viewable ads. To a certain extent, the inexorable rise of programmatic and performance-based advertising turned its back on publishers, decreasing their ability to charge high CPMs on their most valued real-estate, eating on their margins once again.
- Finally, the product innovation around content experiences has now been taken over by technology and platform-based companies (Google, Facebook, Snapchat, Twitter, etc.) which benefit from armies of engineers and much higher capital than traditional and digital publishers.
There are obviously more challenges and I could go on and on painting a gloomy picture. However I believe that publishers now have a unique opportunity to reinvent their economic model around a set of 10 guiding principles I would like to outline below. These are not supposed to be by-the-book solutions that guarantee a sustainable future for all but instead they are a set of tactics I personally believe and hope can work.
I will organize these 10 principles in 3 main categories that remain the backbone of the media business: content decisions, distribution decisions and monetization avenues.
Let’s start with content decisions
1. Creating quality content is expensive, so work with the right internal or external partners. It still strikes me how little publishers partner in this industry, when there are so many opportunities and when it makes so much economic and editorial sense. If I am a publisher in France, do I need a full-time correspondent in Mexico to cover the Pope visit in Central America? Shouldn’t I partner with my leading counterpart in that country instead, who has a higher knowledge and better access to the local facts anyway? If I am a media conglomerate who owns a leading newspaper, a ratio station or/and a TV outlet in a specific market, should I still send different teams of reporters to cover the same event? Media organizations must rethink the way they can be good stewards of their own capital and make partnerships a core tactic to control the costs of producing quality content. When it is done well it can be extremely powerful and provides a better experience for the audience. The work coordinated by the International Consortium of Investigative Journalism on the Panama Papers is a good example of leading international publications working together to make a difference.
2. Focus on vertical growth, not horizontal growth. Concentrate on the content categories and markets you can be a leader in. Many digital publishers have entered an endless race for scale, entering content categories their users or viewers were not expecting them to go into, diluting the value of their leading content into an unspecified general interest category, investing in areas with small or negative return margins. Seeking reach for the sake of reach is not a business strategy. The content business does not scale naturally so it is often in your interest to protect your return margins by investing in your content technology and new storytelling formats instead (virtual reality, messaging, push notifications and alerts, personalized newsletters etc.…), limiting these investments to the content categories and geographies you are known for. Generally there is a higher likelihood that your users and viewers will follow you where you used to lead them than in unexplored areas. It does not mean that you should stop diversifying the content topics you cover, as these can also be a source of audience and revenue growth, but you have to be particularly cautious and selective with your business investments. The progress that the Washington Post has made over the last couple of years is a great example. The Post has continuously focused on the same core content categories and invested on new content formats, management systems and analytics tools, strengthening their tech capabilities to win on content categories they can and are expected to own.
3. It is time to rethink how you make content formats decisions. Not only the digital world has blurred the frontiers between text, image, sound and video but also it has almost abolished the access walls to all of these content forms. However many publishers still seem to make production decisions using criteria that mirrored the pre-digital world. A new decision framework must be systematized, that takes into account impact, audience engagement, recirculation, cost and ultimately return on investment. Similarly, publishers have to develop models to make their original content live and appealing in several formats.
4. Reaffirm the value of journalism. With the rise of curators, aggregators and the immediate availability of news on any digital device, simply reporting on the news is not enough. Unfortunately, digital has made of the news a commodity. Just do a simple search on Google for any piece of breaking news and the algorithm will render the same headlines and media treatments from dozens of different sources. In that context, how can you differentiate? The recent announcement that the UK-based The Times would stop focusing on the breaking news category is a good sign of the times. Media organizations must reclaim their value by doubling down on contextualizing, decrypting, analyzing, commenting the news. I am convinced that explanatory journalism still has bright days ahead and can come back as the cornerstone of a differentiated media proposition.
Once the right content decisions have been made, your distribution strategy is equally critical to your winning operating model in the digital world. Here are recommendations to consider.
5. Embrace the social/content distribution platforms but be careful to not completely surrender your business to them. Undeniably, users and viewers spend a lot of their digital time on Facebook, YouTube, etc. (up to 30% of the total Internet time according to some studies). It is in your interest to make the best of your content available on these platforms through structured monetization agreements. Be where the audience is, monetize where you can. However I don’t believe that the number of digital publishers who will build their whole business out of off-network platforms will be as high as we expect. As the CEO of Bloomberg Media said in the recent Digiday Publishers Summit in March, ”when the tide is out, we will see what’s left.” There will only be a few BuzzFeeds. Actually leading “social” publications like BuzzFeed and Vice Media were recently reported to be more struggling than expected in growing their revenue base from branded content advertising and off-network monetization only. Shifting everything away from on-net to off-net creates an unbalanced dependency upon product experiences and algorithms you do not control. In other words, consider off-network monetization as another source of revenue diversification, not your only area of focus or the solution to your growth problems.
6. Focus on the platforms that matter and build a unified and authentic voice on these. If it is always a great learning experience to try and distribute your content on as many platforms as possible, it is also a very expensive endeavor, from the content production to the analytical steps. Make smart decisions on where you distribute your content and first and foremost think about where you can add a differentiated value to the target audience so that they would stick with your content in a way you can monetize it.
7. Invest on your owned and operated product experiences. Off-network distribution is important but as we saw very few media businesses will be able to rely on third-party platforms only. The design, speed, consistency and features of your media product are as important as the content you are feeding your product with. In particular, media publications should spend enough time thinking about how to unleash the power of their article pages on their sites and apps.
Finally, let’s end with monetization avenues.
8. Diversify your revenue streams. If you are a publisher that already enjoys high brand equity or a significant user base on your owned and operated websites, you want to continue to thrive on this direct relationship. Personalized subscriptions, e-commerce, conferences, business intelligence, branded content are options to consider. It is all about the value exchange between a publisher and its most engaged community of viewers and readers.
9. Consider monetizing your tech/content management systems, as long as it does not cannibalize your competitive advantage. It is an uphill battle to win against ad tech companies like Google, Facebook in what they do best (ad serving, targeting, etc.). However publishers still have a unique experience and understanding of how newsrooms work and many develop proprietary technologies that fit their needs. Some companies (The Washington Post, Vox Media, BuzzFeed, etc.) have the opportunity to license newsroom and content distribution/analytical technologies that are thought about for publishers, in a way that can be net beneficial to their bottom line.
10. Reinvent mobile advertising in a user-friendly manner. As mentioned above, the rise of ad blockers is the last sign of an audience that is so annoyed by bad advertising experiences that they have decided to ignore the cost of creating content by stifling the main revenue feed publishers enjoyed. By putting profit ahead of their audience, publishers shot a bullet in their feet. It is not too late for publishers to rethink how mobile advertising should work, and not repeat the mistakes that happened on desktop Publishers must re-take a leading role in realigning the respective interests of users and advertisers rather than being caught in the middle and becoming the victims of that misalignment.
All of these 10 principles are not applicable to every publisher. Publishers have to examine their individual situation in much analytical detail before looking at these ideas. In some cases one idea might be the right focus for a sustainable future; in others using a combination of those will have the most impact.
May it work, because it is in the interest of the audience, the media industry and of democratic societies to reward quality-based, differentiated and plural journalism at its fair value.