Print News publications have been struggling with an ad-funded revenue model. Attack from digital players and the migration of readers who have assumed new reading habits have added to the problem. What is needed is a combination of product, business, and revenue model innovation.
Recognizing signs of the problem
Take-it- or- leave-it style layoffs across the print publications especially among legacy dailies like The Hindu, Hindustan Times, Times of India, and even regional publications like Sakal Times. Journalists in Indian crying foul over the lack of laws that enable media owners to treat them like gig workers. These problems are not isolated to Indian print media only but even international publication houses.
Now overlay what is happening to a Nassim Taleb tweet (one of the foremost experts on uncertainty & risk) – “COVID is an economic stress test: the fragile is being destroyed (universities, airlines); the robust will thrive”. Another key takeaway from the recently concluded FICCI frames even though not directly related to the print news business was the disproportionate dependence of the media and entertainment industry on advertising for revenue. To look at the solution spectrum, we need to understand what is the cause of the problem and how the industry will evolve in the future.
Why the problem arose & evolution of ad buying parameters
There were heydays for print publications, but with the advent of the internet, things started to change. Innovation from digital platforms gave more options to advertisers, the key revenue source for news publications. To further unpack this shift in the source of revenue, we need to understand how advertisers’ expectations have changed. What advertisers were buying earlier was reach (the old business model was built on that) then came engagement and now relevance. Currently, most advertisers are buying relevance, and it does not take many brains to extrapolate the next expectation- relevance at a lower price.
Advertisers have evolved from just buying reach to matching it with relevance now. With the proliferation of net, digital is offering both reach and relevance, which advertisers followed. Another big problem is the rise of aggregator platforms like Facebook, Google, Twitter, and even apps like Inshorts, Flipboard, etc. To understand the aggregator model, we need to zoom into the news consumption process and how they managed to chip off various tasks that the consumers had to do for news consumption. Earlier consumers had to choose a news brand, then visit a website or their app, search for content, consume content, and then see ads. But now aggregators have become the distribution channel bypassing the earlier three activities that consumers had to do. Beyond this, the high margin classified ad revenue moved out to specialized online classifieds like OLX, Shaadi, etc., if this is the current state of things, we need to understand where the source of revenue is moving to and position publications there aka. Skate to where the puck is going to be.
Where is the revenue moving to?
Patterns in industry evolution help us figure out what is around the corner. Let’s look at the search. It first started with google, but after a certain point in time, it got specialized. If you want anything travel-related, you go to a TripAdvisor or Expedia, in films you go to IMDb. In the same way, the news will get specialized. The tech companies will never be able to produce quality news as it is not their strength. Bringing in journalists and doing investigative journalism, which creates a news brand and trust in people will never be understood by the tech players. News publications need to hold on their strength and not mimic metrics like A/B testing headlines, evaluating a journalist-based number of articles produced, social media following, etc.
Good quality content and analysis, which is valued by customers requires time, and it should not be allowed by aggregators to be picked up and published. Look at the way good websites block prime inventory against the programmatic placement of ads. The top spots are always direct buys. There is a small group of publications like The Ken which have managed to make the audience pay for news and analysis. A counter-argument that can be raised is- anything specialized, people are ready to pay. But general news is also specialized if it is not just reporting but analyzed and implications are drawn out of it. Publications should modify their product and business model to play general, specialized, reach, and relevance game all at the same time. This requires a smart interplay between the news product, monetization models, and business structure.
Innovating the revenue model of news publications
Product refresh, which enables pricing tiers and multiple revenue streams – Publications need to become audience first. News publications sell audience attention which made them attractive to brands, but attention is also based on interest, relevance, and usefulness of information shared. General news can be sold for reach, but specialized analysis driven reports should be paid for by the audience. Create tiers within the same product -free and paid. There can be various gradations within paid itself ranging from- hard walls, metered walls, hybrid, print & digital bundling, etc. The key resource that is the journalists to produce good quality content has always been with the publications. They are the best people to produce unbiased, well-researched content. All that is required are workshops to re-orient them into thinking differently
Packing the same news for digital & offline differently and monetized it separately -Publication houses have to embrace digital and social media and use it to their strength. Today a piece of news can break with an iWatch notification, Insta pic, Tweet, or even a FB post. These should be used for breaking news, whereas print should be used for analysis-driven reports. The same news can appear in different mediums, but it has to follow the rules of the format, and each medium could be a different revenue stream. Apps, email subscriptions, time of the day emails, dayparts updates, follow news events, etc. are all revenue streams out of the same product. Unlike the conventional metrics of CPM, good quality content should be sold basis engagement and page depth which will be attractive to advertisers. To enable this change, the newsroom structure should be designed both for breaking and curated news. There should be content managers and coordinators who monitor the transition between mediums and formats. Newsrooms should have the right mix of digital and offline people working on collaboration platforms which make it easy for them.
In an environment of fake news and tech players’ inability to produce content, Journalist’s strength of researching should be leveraged for monetization directly with the audience as well as brands. This strength can be used to create content for TV/Digital and then licensing it. Imagine the possibilities of business daily partnering with leading professors or universities to bring out new a course. Alternatively, publications can have teams helping new businesses in developing content and navigating the complex mediascape. Journalists need to be given more elbow rooms to build their own properties which the organization can promote and support like Podcasts, TV shows on a revenue share basis
Content lead commerce through audience interest IPs– This is an eCommerce model developed by content creators, which take content as a starting point and sell goods and services. This solves the big problem where Google, Facebook, and other middlemen captured the entire value created by good content in inspiring, educating, and motivating audiences. Fashion, beauty, food, home & DIY, Travel, financial advice, education, health, etc. are areas of interest to the audience on which monetization streams can be built.
Events, Exhibitions & Publication- Monetize audience reach into industry exhibitions, one-off events, Live shows, Idea festivals, Award ceremonies, and publications
These are some of the revenue streams, but it is hugely dependant on the key strengths of the publications, their existing infrastructure, markets served, and multiple other factors. Moreover, the choke points to revenue also vary from publication to publication. Some of the areas which publications need help could be product reframing and refreshing, thinking up new IPs, putting IT systems in place to enable monetization and collaboration, hand-holding team through the transition, staff training, venture teams to pilot new initiatives without disturbing existing staff, build-operate-transfer team, etc.
The need for new revenue models is all-important for news publications at a time when fake news and biased news reporting has taken over our society. The more revenue streams a publication has, the less they will sway to the tune of advertisers or even politicians. This will make news publications go back to their age-old duty of questioning the corrupt, the crooks, and exposing the fraudsters. And when this happens, we as a society stand to gain.
Authored by Subash Franklin, Principal Consultant – Growth Strategy & Innovation.