The £4.8bn digital publishing gap

The gap is an estimated £4.8bn of potential revenue lost to publishers. While the detailed maths of the calculation looks a bit dodgy, it highlights a real point: that the publishing industry appears to be undervaluing its digital content. Finding value is a dominant theme in the latest issue of Wessenden Briefing.

In publishing, the explosion of digital activity – with video currently at the leading edge – is helping to grow total audience sizes, yet there is major challenge with audience metrics. Measuring a shifting audience across platforms and devices and trying to assess the different levels of engagement is a massive undertaking, which is why the PAMCO is so important; but it is also deeply complex technically and highly political, particularly when it comes to funding. Will the industry really pay for the measurement system it says it wants?

There is also a big issue about the role of “Audience Development” within a publishing organisation itself. What does it do? What skills does it require? And which channels should it be focusing on?: print or digital?; retail or subscriptions? All the channels are actually linked, but which is driving what?

The development of retail magazine-finder apps may provide some of the answers. And the experience of the book market shows that publishers ignore the “dark channel” of retail at their peril.

In retailing itself, there is also massive change. Putting the staggering loss announced by Tesco to one side, the industry is grappling with many currents….the growth of online, hard discounters, variety discounters and convenience are all pressuring traditional retail channels and practices .

Watching Tesco “behave” its way out of its mess is instructive. Simplification, a renewed focus on customer service, driven by a shift from the centralised head office to the empowered retail branch – these are key trends.

Yet the major retailers are also streets ahead of most publishing companies in terms of their investment in digital technologies to ease and streamline shopping. As is Amazon Prime. And good old Connect (aka Smiths News) which has hooked up with Amazon in both Click & Collect and Direct-to-Consumer. There is also clearly more consolidation to come in a retail market which has significant overcapacity…..much like publishing. Also like publishers, retailers are also looking at additional revenue streams: “retail media” is one of them, which OC&C thinks is a £1bn advertising revenue opportunity for retail which will hurt publishing.

In digital there is ongoing and disruptive activity in every direction, some of it within publishing, but a great deal outside it, but all of which will eventually impact on publishing. The observations of Ann Lewnes, Adobe’s Chief Marketing Officer are fascinating:

“One of the great misconceptions of digital marketing is that you’ll need fewer people to do it. It’s actually the opposite… Digital is forcing every person to adapt or they become extinct.”

That goes for organisations as well as individuals.

A recurring theme running through every section of the latest issue is partnerships. To find the scale and speed to have an impact in a noisy world, partnering with other organisations who have the skills or audiences we would like to have internally ourselves is a real option; sometimes, the only option.

A value gap of £4.8bn suggested by PwC for reading digital content may be a debatable figure. Yet defining what value an individual, a department or a company actually has is the challenge for everyone. Otherwise, we simply “become extinct.”

To receive a copy of the latest issue of Wessenden Briefing you can subscribe here.

This article was first published here and has been republished with permission.

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