Let’s Fix The Media Business
Access, Benefits, and the Building Blocks of a New Media Model
The media business is not broken. It’s fractured. But not broken.
The degree to which the media industry is fractured, and who should fix it and how, are the subjects of constant debate and pushback. It’s not that media companies don’t honestly believe that they need a revitalized business model (trust me, they do). It’s that many who attempt to change it don’t fully comprehend how businesses built on journalism and media work.
Here’s the truth.
The media industry is obsessed with growth. This obsession has led to reckless practices in an attempt to achieve maximum discovery which, for better or worse (definitely worse), brings in more dollars and more users. That model, built off growth, also introduced an overabundance of “media companies” in various competitive sets who are incentivized, not to have a unique perspective and integrity, but to simply be discovered first. Unfortunately, this has put a damper on the opportunity for the media industry to evolve beyond its current revenue offerings because the focus now, in an overpopulated economy, is to survive and maintain rather than influence and grow.
But we’re moving in the right direction. Finally, everyone agrees that pivoting to the next best thing just means pivoting to irrelevance. Voice and integrity is everything.
Before, we were an industry built off scale and information, and now we’re moving toward loyalty and reputation. Reputation will ultimately bubble the best content towards discovery and filter the worst content out. Truth matters. Opinion matters. But trust triumphs all.
The business of media is not controlled by the creators. Nor should it be. Journalism is a value, a product. Media is a business. The most important thing for a creator to focus on, whether independent or in a larger organization, is the quality and integrity of their storytelling. Creators cannot bend or adjust their philosophies due to shifting demands of a repeatedly disrupted content monetization model. That is why the people who run the media business exist, and that’s why their efforts, ideas and attempts should be heard and studied; but now, adjusted.
As we introduce new models, we must respect the past. Simply put, there are just too many media companies and too few advertisers and subscribers. But there is a way forward.
There Is No Single Standard
Issues of platform distribution and advertiser influence have pivoted the business of media. Last year we pivoted to video, pivoted to VR, dabbled in AR and now, wait for it, the blockchain! As mentioned, a requisite to the restoration of a media that functions for the public good is that editors, journalists and others not be distracted by the business side of things. Too much involvement on the business side does, consciously or not, affect editorial integrity. It must be the job of others in the organization to position the company for steady or growing revenue and profitability.
Because media companies vary widely in audience and mission, there is no way to devise a single blueprint for subscription modeling, access protocols, advertising standards and cross-branding. There are lobby groups, such as the IAB, that try to establish standards for digital web ads, but that only provides a general stratum of content monetization, requiring individual media companies to add other layers that often hinder user experiences and proactivity.
Tech has tried to help media with these issues for quite some time; however, it’s important to note an operational conundrum:
The media business is cyclical. There is a reason it operates like it does, and there are certain factors that are hard to change. It repeats and rewards (and then hurts) because there are two sides to it: the product, which is the content; and how to sell the product. And those two sides differ in opinion, strategy and focus. Those not in the business need to understand the internal politics and the tugs-of-war that must be continuously resolved for media companies to function smoothly and make money. Which results in a cyclical environment of wins, losses, rinse and repeats.
The technology business is continual. Rather than reviewing the past, it’s focused on engineering the future. Its entities are always experimenting and introducing new monetization channels and optimizations, and, therefore, intentionally or not, introducing new operational disruptions. This runs counter to a system that empowers a media that works in the public interest and is profitable for the long run.
We need to recognize that the media model isn’t standardized. It’s also, for the most part, non-transferable. Many want to access a site for a particular reason but not everything else. This is why aggregators are so popular, and why many have been keen to opt into Facebook Instant Articles and other audience growth vehicles with transfer opportunities based on audience interests.
This is where innovation starts. It’s the interface between what has been done and what can be done. Listening to the consumers, understanding the challenges and proposing a solution by facilitating through technology. Access is key, but access is no longer enough. There needs to be access plus benefits to drive user trust and adoption. That’s where technology and the media business converge for the best.
Access + Benefits = A Value Solution
One thing is clear: while broad access to media content has hurt journalism, a new and better media economy can be built. Some companies have recognized this and built a lucrative model around access + perks (Amazon, Netflix, Spotify, Hulu and others). The news media business still feels justified in giving access with no extra benefits. And that’s a problem. For example, Netflix is successful as a subscription model because you pay for access plus offline content plus no ads. Spotify finds success in a similar way; it offers access plus offline consumption of downloadable content. Yet news and other journalistic media continue to assume that access is enough.
Access alone isn’t enough if all it does is make the user feel that it’s something they should pay for just to “do their part.” That does not motivate enough would-be subscribers. What media should do is sell access plus benefits. If you subscribe to news, you don’t get ads. Simple. But as an industry, there is no coordinated stance to offer more, so the value is vague. What’s clear is that access alone isn’t valuable enough as a stand-alone for the vast majority of consumers. Access + benefits is the only way to establish consumer excitement and loyalty.
Over the past decade or more, the battle to replace lost classifieds revenue, competition with local forums, ad-blocking, content scraping, and aggregator-driven dilution have all bred a new reactive mentality for news media brands. The strategy in the fight against these threats has been to continue to offer the same access as before, just more forcefully. There are no additional benefits, no further offerings, just the notion that this is worth it and you, the consumer, should pay. It’s an assumption that consumers of news coverage and other journalistic content should be grateful, and that their attention does not have to be earned in new and creative ways. This has to change.
Replication and circumvention have moved the web toward being a place not of intrinsic discovery, but one of reactivity and expedited delivery, where media pushes content in a way that lacks humility and honesty. For instance, allowing or even encouraging the user to circumvent the paywall in order to get some sort of revenue-per-view was a reactive measure. “We’re going to lose them anyway, so why not make some money?”
If you believe that your content is worth more, you need to prove it. Not measured through vanity metrics like a one-off spike in view time, but based on what your brand does for the consumer and their feelings of being newly and more deeply informed on a topic or issue. As news media people, we must aim to shepherd a new experience on the web and leverage the value of that new experience with honesty and humility.
A new monetization model must be built around what content is actually worth. Not what it costs to create, or how many ads we can put against it, but its true worth in the long term marketplace of ideas.
Defining Media Models to Fix the Industry
The ideas listed below are both existing models and possible new models that can be leveraged today. There are three core options for maintaining and experimenting toward a better financial model for the web:
1) Ads with data (current)
2) Subs but no ads/data
3) Data opt-in advertiser exchange (no visual ads/subs).
The vicious cycle of reinventing business models (and losing) continues because the industry can’t standardize the consumer compromise and consumers are, therefore, confused.
#1 is unfavorable to the consumer and the brand in that neither benefits in any meaningful way. There comes a time when it’s not just a discussion about degraded user experience, but actual advertiser value. Advertisers are told that their ads aren’t “friendly” and that they are not storytelling in their “voice.” The next move is then, “We’re going where ads work.” This works for media in that it’s an engine of maintenance, but media needs a better model in this scope if data and audience remain core value for buyers.
#2 works. But, disregarding for the moment the “What is the most we can charge?” vs. “How easily can we extract some money?” predicament, all media entities need to agree that subscription = no ads (that’s the trade-off).
#3 is favorable to the consumer and the brand, but it tends to not work well in the long run.
Consumers are willing to pay for valuable content. We see it with entertainment content streaming and downloading. The trade-off is obvious: gated content, no ads. But news and other journalistic media want to have their cake and eat it too: the consumer pays for sub, + allow ads, + allow data collection that informs ad server analytics. That model needs to change to turn more casual consumers into subscribers.
An important distinction to consider as we push for access plus benefits: How do creators leverage media companies? Oversimplifying, it’s three things: exposure, financial and reputation/integrity (ethics). And they should not work independently of one another. Interoperability is crucial.
This is why digital advertising (financial/reputation), siloed descriptions (financial/exposure), platform distribution (exposure/financial), etc. are all struggling, short-term models. They don’t satisfy the three components and don’t operate well together. Asking a consumer to give money, data and an ad-server-impacted experience is too much. The consumer must be offered a simple, tiered experience.
All media companies are not the same, which is the biggest hurdle. All have different products, with different consumer demos and different values. But all must think a lot more about access; how it’s defined and how it’s valued. What’s clear is access alone isn’t valuable enough as a stand-alone for any industry. Access + benefits is the best path toward consumer loyalty and steady revenue.
As long as we are aware of the challenges, we will certainly find a solution. Emphasis on value and integrity is the key to forging a way out of the self-imposed revenue box the industry now finds itself in. Reputation will unlock the next generation of value for publishers, and facilitating that opportunity for all will both better the media model and raise all ships for those that create everywhere.