Can diversification save the publishing industry?
And while overall net growth is on the decline, the signs are there that the industry is stabilising.
Meanwhile as newspapers continue to struggle to reinvent themselves, magazines are seeing much faster revenue recovery despite the decreases in print circulation.
What’s happening in magazines that’s fuelling some of this optimism? Given the latest trends we’re seeing in the industry, one word comes to mind — diversification.
Diversification has been the mantra of financial advisors since the dawn of the stock exchange, and for good reason. Putting all of one’s eggs in one basket is a high-risk game in money; the same can be said for magazines.
Magazines by virtue of their frequency (or lack thereof) in today’s 24/7 interconnected world have a much more difficult time keeping the attention of readers on their brands than daily newspapers. Evergreen content can help extend the shelf life of magazine content, but it’s not enough to retain the interest of audiences enough to capitalise on the added attention.
Content is Not Enough
We’ve all heard the old adage that “content is king”, but with the wealth of free information available online today, content has become commoditised. It has become table stakes in a fiercely competitive battle for eyeballs.
Which is why a number of the more innovative publishers have filled the limbo between issues with complementary products and services designed to engage their readers between page flips. These new business lines are not only strengthening the ties with audiences, they are forming new and, sometimes, lucrative revenue streams for the brand.
Driven by the need to differentiate themselves in an overcrowded publishing landscape, magazine media companies like Future Plc and Condé Nast are recognising that quality content is not enough to grow their kingdoms; they need to invest in communities and commerce.
A few years ago, Future Plc, like most media companies was suffering from the distresses of digital disruption. They were bleeding ink as fast as anyone, but instead of hanging on to the pipe dream of “If we print it, they will come”, the publisher chose to disrupt itself and transform its business from print to digital through a combination of focus and diversification.
It started by rationalising its media brands, selling off non-strategic businesses and focusing on its core competencies in technology, games and film, music, photography and creative. But it didn’t stop there; Future took its transformation one step further by diversifying its portfolio with live events such as T3 Gadget Awards, Golden Joystick Awards, Electronic Entertainment Expo (E3) dedicated to PC gaming and The Photography Show.
Earlier this year, the publisher invested in a blogger network and just recently acquired Net Communities — an award-winning digital company that specialises in advertising solutions and publishing.
Leveraging the synergies and specialism of the two companies was a smart idea. Not only did it solidify Future’s portfolio and brands such as T3, Gizmodo and TechRadar, it almost doubled its tech-loving audience to 15m overnight.
In the face of adversity, Future made some tough and bold decisions to transform its print-focused business into a digitally-diversified media business. Today Future is the UK’s leading technology media publisher. Both of their UK and USA businesses reported profits in the first half of 2015 and in the US it was the first time in seven years.
Although Condé Nast was not immune to the effects of digital disruption, it has not sat on its laurels waiting for the industry to recover. It’s hard to keep up with this media mover and shaker…
In addition to its brand-based restaurants and fashion and design college, the company launched Condé Nast Entertainment (CNE) in 2011 to order to develop film, television and premium digital video programming. By the end of 2014 CNE’s digital video network exceeded 2.3bn views and is now distributed across every major video platform and over-the-top devices including Apple TV and Roku.
In January 2015 23 Stories by Condé Nast was born, bringing together the company’s content expertise, creative talent, distribution network and audience data for advertisers and marketers.
With 74 per cent of women wanting to find and buy items they have seen in a magazine or on an app, it’s no wonder why we’re seeing retail and media start to converge at Condé Nast. Vogue, Harper’s Bazaar and Cosmopolitan are all experimenting with “shoppable content”. And although they haven’t perfected the user experience yet to the level of Shazam, it’s only a matter of time before they start to capitalise on their shopaholic audience.
In terms of building communities, many Condé Nast brands have created Members Clubs (e.g. Condé Nast Traveller Members Club, Style Society and Details Insider) which offer exclusive special deals, contests, forums, polls and rewards for members.
Condé Nast’s digital audience reached 86.3m adults in June of this year – a 60 per cent increase over the same period a year ago. Ranked 21 among comScore’s top 100 properties, Condé Nast continues to stay ahead of some pretty impressive sites, including BuzzFeed, SheKnows Media, Pinterest, ESPN, New York Times Digital and Scripps Network.
From Content to Consumers
In the past magazine and newspaper publishers focused on monetising their content and the best way to do that was advertising. Today that approach is definitely not serving them well as print advertising declines continue and rising digital advertising isn’t coming close to making up for the losses. Which is why more and more publishers are looking to diversify revenue streams and shift their focus from monetising content to monetising consumers.
Now more than ever these publishers must get to know their audience inside and out. It’s not enough to know what, when and how they consume content, but what they do when they’re not reading. Hobbies, interests, passions, travel and shopping habits are just a few of the traits publishers need to understand up close and personal in order to give their audience what they want – an engaging (sticky) experience worth paying for.
This morning I woke up to read that:
• TorStar is investing US$200m in VerticalScope – a digital media company that operates hobbyist and niche-interested websites
• Business Insider is launching a new technology site, Tech Insider
• UK’s best-selling men’s magazine, Men’s Health, has launched a range of vitamins
Diversification seems to be catching on!
According to 6,000 businesses surveyed for Adobe/Econsultancy’s Digital Trends Report, this is the year of customer experience because it represents the biggest opportunity for companies to differentiate themselves.
Well, if this is the year of customer experience, then 2016 looks poised to be the year of diversification in the publishing world.
Will diversification be the saviour of the industry? Will publishers be willing to experiment outside of content?
Only time will tell, but I for one will be following this emerging trend closely to see how it unfolds over the next months. Stay tuned!
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