Condé Nast (Vanity Fair, Vogue, New Yorker) moves to monetize all of its titles through paywalls
The move is indicative of a larger shift among publishers
TL;DR
- Magazine publisher Condé Nast lost $120 million in 2017
- The company hopes to return to profitability by 2020
- CEO Bob Sauerberg anticipates a sharp drop in dependence on advertising revenue as the company puts more titles behind paywalls, including Vogue, GQ, Bon Appétit and Glamour
$0.02
There are a few fundamentals to get out of the way first:
- Ongoing declines in print (magazine, newspaper) readership — this is causing publishers to lose eyeballs.
2. Ongoing decline in print ad revenue — with less eyeballs, publishers are losing the ability to retain advertisers and are, thus, generating less ad revenue (not considering subscriptions for now).
3. A rush to get online — the proliferation of the internet has made even the most stubborn of print publishers create digital properties to capture fleeting audiences. This has saturated the web.
4. The rise of ad blocking — since everyone’s online and trying to regain their revenue footing, they overload their websites with ads, bringing about the rise of ad blocking. When an ad blocker prevents an ad from being loaded on a website that you’re viewing, the publisher doesn’t get any revenue since, by today’s standards, the advertiser typically only pays when the ad is viewed.
5. The rise of content aggregators — since there are so many sites online, platforms like Google and Yahoo have created one-stop shops to surface content. They leverage their machine learning capabilities to hyper-personalize your home page so that you only see the topics that you want, regardless of publisher.
So where does this leave us?
With all of these factors considered, publishers are largely struggling to stay afloat: few people choose to actually pay for their subscriptions. They might have a case if they create a truly compelling offering (eg. Leveraging renowned journalists, providing unique / exclusive articles, etc.), but content has largely become homogeneous, resulting in its commoditization.
Publishers have been exploring alternative strategies, such as a focus on membership. Companies like the New York Times have worked to create a full supplementary experience beyond content. This can include perks like free tickets to events, access to niche communities, discussions with journalists, etc. but it’s too early to tell if this will be sustainable. Others have completely overhauled their strategic direction, toward areas like digital content production (eg. audio, video) to “get with the times.”
Condé Nast’s decision to put an increasing amount of its content behind a paywall hinges on a very crucial bet: that its product is perceived to be compelling enough for people to pay for it. It also puts the company up against other publishers doing the same, and competing for a finite share of wallet.
I believe that publishing will go largely in a similar direction as television in the short-to-medium-term with the rise of aggregation services. People will pay a fixed monthly fee to a platform like Google to get an all-you-can-eat buffet of news content from a broad range of publishers (which, consequently, will cause individual publishers to lose more direct relationships with their readers). The platform will leverage its head start in providing superior digital experiences via personalization and other rich features; it will collect user and consumption data to improve experiences, and potentially advertising; and it will provide a small cut of revenue back to the remaining publishers that populate it with content.
While this would provide convenience, it would likely result in crisis of journalistic integrity. Why do you think that most headlines are loaded with clickbait? They want to shock you and get you into their digital ecosystems.
Let’s hope that quality publishing can muster up a sustainable second wave in this digital age.
