Media M&A, reader revenues, data and advertising: What publishers can expect this year
2020 has now firmly landed, and as we gear up to go back to work, many of us will be wondering what this new year will bring the publishing industry.
Fortunately, the Media Voices team have done the hard work for you. Our Media Moments 2019 report, written exclusively for What’s New in Publishing, explores eight key themes in media and publishing, from major events in 2019 to the outlook for the next 12 months and beyond.
When it comes to M&A, reader revenues, and data, 2019 saw significant upheaval. But what does the team think 2020 has in store?
Mergers and acquisitions
Media M&A mania ramped up over the course of 2019 at both a regional and international level. With much of the significant M&A activity looking to bolder and broaden publishers’ existing offerings, this is a trend that is likely to continue strongly this year.
Whether the end result is Buzzfeed CEO Jonah Peretti’s mooted mega-merger, or monstrous regional media powerhouses that become too big to sustain themselves is yet to be decided. It also remains to be seen whether any of these mergers are able to apply any pressure to the ever-growing dominance of the Facebook-Google Duopoly.
There are, however, some things that are absolutely certain looking into 2020. The first is that we’ll likely see more ridiculous valuations for newly-merged companies, based largely on the dreams of the participants rather than any actual revenue potential.
The second is that there will be many pain points along the way. While companies use many euphemistic terms for making people redundant, and while it often only makes sense to reduce headcount where possible, the reality is that consolidation will inevitably contribute to the shrinking number of journalists — with all of the associated problems that will bring.
And while the threat of recession that likely drove much M&A activity in 2019 has been kept at bay on both sides of the Atlantic, it could potentially return this year with a vengeance.
Read more from this chapter by Chris Sutcliffe on how mergers and acquisitions are shaping the media landscape of the future.
From global news brands to individuals harnessing crowdfunding platforms, more publishers are taking cash straight from their readers online than ever before. But as more publishers close off open access to content, subscription fatigue looms large, and publishers can expect to have to work ever harder to remain one of the tiny number of publications people are prepared to pay for.
Looking ahead to what is likely to happen this year, we can expect more publishers to pivot to some form of paid content play. Those that already have paywalls in place will be working hard to bring in new paying readers, but also to retain the prospects converted in previous years.
Increasingly, we will see smart paywall technology being implemented to help publishers target their efforts at the most likely prospects for conversion and retention.
Where paywalls are not enough, paid apps are being developed, building regular usage habits and increasing retention rates. The return to apps may represent a counter to Apple News+, or it may simply be a recognition that workflow and UX have atured to the point that apps represent a potentially profitable opportunity.
But reader revenues are not a silver bullet. Although more people than ever before are paying for content, most people aren’t paying for online news, and there are worries that in some markets we have reached the upper limit of people who are willing to open their wallets.
With consumers being asked to pay for music, movies and games, ‘subscription fatigue’ could really begin to bite in 2020.
Read more from this chapter by Peter Houston on publishers joining the race for reader revenues.
Data & advertising
Increased regulation may have been catastrophic for portions of the ad tech industry last year, but as the shake-out continues, publishers and reputable partners are seeing the benefits of better data management and transparency.
Many publishers are making it a 2020 goal to be totally non-reliant on third-party cookies, from changing tech stacks to swapping data management platforms. This may be painful for revenues in the short term, but as first-party data becomes the new currency, publishers have a huge advantage.
To prepare for this, a first-party data strategy is essential this year. Advertisers are also beginning to recognise that context is king, and that a reader’s behaviour on a site and what they’re reading is a much better measure replacement for third-party data.
But to make this bright future tangible in the short term, a lot of work still needs to be done on educating the buy side. Many ad transactions at agencies are still based on the third-party cookie, and there is a lack of understanding about the greater value of first-party data, which needs to be bridged.
For smaller publishers, the challenge this year will be getting a comprehensive overview of their data pipelines, and the skills in-house to be able to properly harness their first-party data.
Data regulation is also likely to be a key theme of 2020, with California’s Consumer Privacy Act coming into effect this week. We can expect more regulation — albeit not cohesive — from states and nations around the world.
However, we have yet to see a publisher fined under GDPR in Europe. In some cases, that’s an issue of delay, with each country having to embed GDPR into its own national laws. But overall, it seems most publishers fall quite a way down the list of offenders; a state of play which is unlikely to change significantly this year.
With all the other factors pushing publishers to take back control of their own data, the future looks very bright indeed.
Read more from this chapter by Esther Kezia Thorpe on how data is empowering publishers.