Innovation in Media World 2024-25 Report launched at FIPP Congress
How best to integrate AI in newsrooms, the power a freemium paywalls and the importance of drawing up a first-party data strategy were some of the big talking points as the Innovation in Media 2024-25 World Report was launched at the FIPP World Media Congress in Cascais.
“It’s been a promising, optimistic year full of innovation, business models, subscription models and in new print and in AI,” said the book’s co-author Juan Señor of Innovation Media Consulting. “I remain an optimist when it comes to the future of the media industry, but an optimist that worries.”
Exploring the most profitable developments impacting media today, the annual report, authored by Señor and Jayant Sriram, is compiled using a vast network of 90 consultants globally, who gather cases for the book, published in partnership with FIPP.
It is then put through a filter, to see whether the media groups have shown an increase in reach, revenue or relevance.
The where and why of AI
When it comes to AI, Señor implored publishers to “remember their leverage”.
“We are what feeds LLMs. This is what feeds their machines,” he said. “And it’s not just political journalism. It’s not just the latest journalism. It’s sports journalism, service journalism, gossip journalism, fashion journalism.
“The informational needs of the world are huge, so this is our leverage. They need us. Without us it’s artificial stupidity and they know it. So, let’s negotiate firmly but also think from a demand point of view, not from a supply point of view, because without a doubt chat is going to replace search.”
The report points out that, while publishers must come together and maintain that AI will never substitute for reporting stories, there are a multitude of other ways in which technology can make the work of newsrooms more efficient and effective.
A recent study by The Associated Press, based on a survey of nearly 70% of newsroom staffers, shows that the technology is being widely used for various tasks such as crafting social media posts, newsletters, headlines, translation, transcribing interviews, story drafts, social graphics and videos.
Señor warned that while AI is being used effectively in a number of newsrooms, publishers should not discard the human element altogether.
“There’s been massive experimentation throughout the industry. And yet, when you ask people, Do you trust GenAI content? they say no way. So be careful. There’s already been massive blowback for some publishers with people saying: ‘What the hell, what I just read was generated by a robot? You’re cheating me.’
“Humans are still conditioned to follow humans. And if you pretend that you’re giving them original content, be aware there could be blow back. It could do serious damage to your brand.”
The report also lists guidelines and codes of practice publishers including – The Washington Post, Mediahuise and The Financial Times – for the use of AI in their newsrooms, as well as coming up with ideas about how it can be implemented to create efficiencies, save time, and aid journalists in their tasks rather than replace them entirely.
The power of freemium paywalls
The Innovation Report dives into the use of paywalls and concludes that freemium is the ideal model to grow ads and subscriptions.
“We’ve seen a fascinating new development in the last year and a half, which is the advent of the freemium model as what seems to be the standard one,” said Señor.
“And there’s a lot of growth still to come. Only 1% of average populations are subscribing to a lot of journalism, a lot of news brands, a lot of consumer brands.
“So freemium seems to be emerging as the best model for you to balance between collecting data, which you can also use for product development – which is essential for you to develop this business of bundling and offering new things – and selling that first-party data to campaigns to advertisers and so on.”
Additionally, the report shows publishers previously utilising freemium models are now incorporating elements of metered access to develop “hybrid” models in the hope that additional content restrictions will drive more readers to become paying subscribers. This typically involves reserving a distinct portion of content for subscribers and metering everything else.
Surviving the cookiepocalypse
With Google set to finally phase out third-party cookies on its Chrome browser by the end of 2024, the report stresses the importance of publishers drawing up a first-party data strategy.
“First-party data must be an obsession with you – how do I restructure my business to capture as much of it come January,” said Señor.
“Data is the voice of your reader. We really should be listening to it more even today. And indeed, the data is out there for us to grab. The data wall has to be as big an obsession for you as the paywall. But things must be combined. And we see a three-tiered freemium model as the best way to develop that business.”
While the ‘cookiepocalypse’ has long been dreaded, the disappearance of third-party cookies presents an opportunity for media companies to leverage their first-party data – content assets and trusted customer relationships – to build more robust digital advertising, subscription, and e-commerce businesses.
The report shows how publishers are intensifying their efforts to enhance their first-party data strategies in response to the third-party data sunset. A report by McKinsey titled “The Demise of Third-Party Cookies and Identifiers” highlighted that the publishing industry faced the risk of losing up to US$10 billion in ad revenue.
To mitigate this loss, publishers began diversifying their revenue streams through alternative forms of advertising, subscriptions, and other sources. However, this transition poses a considerable challenge, particularly given that less than 3% of their traffic originates from known users.
Bundling up and print
Señor also highlighted the importance of bundling, quoting Jim Barksdale, the former COO of Netscape that: “There are only two ways to make money in business: One is to bundle; the other is to unbundle.”
“Adding e-commerce services, games, multimedia bundles, your sales are incremental,” said Señor. “Really, it’s demonstrable that you will get a higher level of sales and your costs are quite minimal. So, you’re just packaging things that before you get all for free. So, you need to unbundle the bundle and then bundle it yet again. And it’s a fascinating way of monetising around the information and not in the information directly.”
Señor concluded with a look at print, with the Innovation Report featuring a ‘Print & Offbeat’ chapter.
“For many of you most of your revenue comes from print, so it’s eternal,” he said. “It’s not going to be replaced but is being displaced and we like to talk about new print. New print is a very interesting concept. We’ve seen publishers using it. New print is a keepsake. So, it’s really doing bookazines. It’s really doing magazines that are really like coffee table books that are really high-quality premium luxury products.
“We are sensory beings. We like to touch things. Things that come through the physicality of touch, stay in our heads and people are much more satisfied. So, you really have to play on the physicality, the permanence and the size and the price. We’ve seen publishers successfully charging five times what they were charging before for a print product.
The Innovation in Media 2024-25 World Report is available in digital edition, 39EUR for FIPP members and 69EUR for non-members. The print edition is available exclusively at the FIPP Congress in Cascais.
