It was telling that the last in-house media attention-grabbing headline of 2017 was BuzzFeed founder and CEO, Jonah Peretti’s “The media is in crisis” moment, setting out in a memo what most media owners already knew: quality digital publishers cannot make enough money from platforms and will need to diversify revenue streams beyond advertising.
One of these revenue streams is to monetise what some publishers like to call “people’s passions”. Dominik Grau, chief innovation officer at Ebner Media Group in Germany warns that reader revenues simply need to be a vital and substantial part of any future media business plan, “be it text-based content revenues, video subscriptions or podcast programs.”
Audience must be at the centre of any strategy, says Grau. “Audience first, content second, technology third,” he stresses. At Ebner they have been having success with monetising from this approach for several years now and are planning to fine-tune this strategy in 2018. Meanwhile many other publishers are also starting to see the value of placing the audience at the top of their strategy, says Grau: “If you start there and if you observe and listen closely to what the readers, their consumption, content behaviour and interest patterns tell you, then monetising loyalty is simply the next step in finding the relevant models to what you’ve seen.”
Marcus Rich, CEO of Time Inc. UK agrees. In fact, he says, what has been at the base of expanding their business has been a deep understanding of their subscribers and their passions. “Time Inc. UK has built its business on audience passion. The Time Inc. titles serve customers who are incredibly passionate about subjects beyond work, whether this be cycling or sailing.”
Over time, especially with the rise of social media, says Rich, people have become even more passionate about a variety of special interest activities. “Then all you need to do is work out where when and where we have permission to extend the relationship with the audience, whether this stretches into events or ecommerce.”
Chris Kerwin, publishing director of BBC Worldwide, uses BBC Good Food as an example of a brand which uses increased audience engagement to grow well beyond digital advertising revenues. Since the website made changes to embrace mobile audiences, digital advertising rose on average by 25 per cent per annum over four years. But what has been really significant for future growth is that the increased audience scale has made it possible to grow non-advertising business through initiatives like adding ‘click-to-buy’ functionality to recipes in partnership with major grocers and launching the BBC Good Food Wine Club, in partnership with wine merchant Laithwaites.
“As a business we cannot rest on our laurels though and constantly seek out new opportunities to distribute our content on new platforms. Whether that be experimenting with content on new social platforms or working within the connected home environment, it is important for Good Food to continue to future-proof the business and safeguard the future of the brand. Things on our slate for 2018 to better engage with audiences include voice activated content, AI, connected kitchen products and wearable technology,” says Kerwin.
Events and exclusivity
Events must be an important part of a future-proof audience revenue strategy, warns Kerwin. BBC Good Food was born from a willingness and ability to experiment with different live concepts. “Our live business is an important part of the publishing mix, with over 300,000 people attending a Good Food event in the UK each year.”
The biggest shows annually are at the National Exhibition Centre in Birmingham in June and December, but last year also witnessed new Good Food Show launches in Belfast, London and Harrogate. Innovation and exclusivity is part of the event strategy. Last year BBC Good Food trailed a new brand called ‘Feat’, working with the Royal Palaces to offer shows at Hampton Court and the Tower of London. “In addition,” Kerwin continues, “we offer exclusive events for our subscribers, including wine tasting and ‘money can’t buy’ restaurant experiences, as well as arranging events with some of the UK leading chefs at some of the UK leading restaurants called Good Food Eats Out.”
Digital pure plays like the San Francisco based ‘The Information’ links a large part of its subscription model to exclusive events. The RSVP tab to attend an exclusive “Young Professionals Launch Party (for under 30’s) at the private home of a well-known tech entrepreneur” later this month actually takes you to a “subscribe to The Information’s Young Professionals Plan at $199/year for the next five years” landing page. Subscribers then gain access to the event, conference calls, in-depth articles, a members-only Facebook group, The Information Videos and more exclusive events.
Make them pay
At The Economist subscribers now pay the same for a digital subscription as for a print subscription on the grounds that subscribers pay for the content and not format. This, says Michael Brunt, chief marketing officer and managing director circulation at The Economist, partly explains how they have managed to transform the 174-year old title’s circulation business into the biggest driver of profits.
In a world of fake news there’s a demand – and opportunity – for publications with integrity, says Brunt. This means subscribers are not only willing to pay for content, but also willing to pay more for quality content. At last year’s FIPP Congress in London Brunt revealed that despite price increases for both print and digital subscriber packages The Economist’s subscription numbers are up by around 100,000 compared to 2014.
The New York Times are taking the same approach this year. It has lowered its free story count from 10 to five and will now charge if you want to read/download/print a recipe, having the belief readers are prepared to pay for content and grow its existing 3.5 million subscriber audience. Others are following suit.
Expanding into new fields
Apart from the growing importance of revenue streams like subscriptions and events, Grau also predicts that AR and VR will see some first monetisation elements this year. Chatbots and chat-based content will become more useful and improve revenue potential, while database revenues will be driven by AI, modelled on pre-existing journalistic content turned into information units and presented as flexible as possible.
“We need to look closely at the intersection of AR, VR and AI, and understand how chat-based, automised communication can lead to entirely new transaction business models for publishers,” says Grau.
“We should think of events as a hub of minimum information units with each unit being distributed widely prior to and after the event, and forego banner ads to innovate on content marketing methods and helpful native ad programs. And let’s not forget: by the year 2020 millennials will make up 50 per cent of the global workforce, they’re your next decision-makers, content consumers and business partners. Better to start now with knowing what they demand and expect from a modern media partner and journalistic platform.”
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