Legacy media is all but over – long live the digital revolution. This is old news to anyone who has been paying attention, not least to media companies themselves thanks to the rise of the internet omnichannel. It begs the question: what can traditional media firms do about it?
Paywalls have been one answer, sponsored partnerships and membership incentives others, yet the severe economic displacement continues. Media companies in their last financial breaths are finding that diversifying business models is not as simple as it might seem. Let’s explore what old media can do about it:
Media, now and then
Traditional companies in print, radio and television are struggling for relevance and revenues in the age of “free” internet content. The internet has demolished industry barriers to entry, leaving the media behemoths of yesterday scrambling to not only thrive but survive in the new paradigm.
News businesses know that they need to digitally adapt to stay afloat. Case in point: The New York Times, who aim to create $800 million digital business by 2020. The publisher, which launched in 1851, was one of the first major outlets to put up a paywall eight years ago. The move did connect with readers willing to pay for their news and evergreen content such as complex investigative journalism, counting more than 3 million subscribers by the end of the third quarter of 2018.
Paywalls appear to be where most publishers are hedging their revenue bets. For example, Wired, Vanity Fair and The New Yorker grew 27 percent in digital subscriptions from 2017 to 2018 after committing to paywall titles.
Quality journalism and newsgathering has proven that it can demand premium prices – but the jury is out on whether this will work for other media services. Unlike in-depth and investigative journalism, fashion writing will compete against free and sprawling social media platforms like Instagram and Pinterest.
Beyond the paywall
The reality is that paywalls are far from perfect and not a one-size-fits all fix. Clearly paywalls can be efficient and attract paying customers, but realistically users are only going to pay for a determined number of subscriptions every month. For example, Deloitte suggested that 50 per cent of adults in the Western world will have at least two subscriptions by the end of 2018 and four by 2020. This feeds into fierce competition between publishers to be one of those valuable subscriptions.
The truth is that media companies need options outside of the paywall – and e-commerce is showing promise as one of those options. Visual search capability, for example, is giving credence to this e-commerce drive. This function allows a news story of a red-carpet shoot to highlight any part of an outfit worn by a celebrity to offer similar, or more affordable, alternatives to readers.
Another viable option is media partnerships. For example, Vice Media recently teamed up with Teads in an exclusive global partnership that will see the youth media brand use the Altice-owned outfit’s display and video ad tools to help bolster ad yield, Adweek reported.
Furthermore, cooperation between media companies and digital coupon businesses continues to grow due to high consumer interest and purchase intent of online discounts. Coupon businesses attract customers through discounts and companies through demand – hosting this transaction through media companies can drive traffic for both parties, an easy win-win.
Evidently there are answers to the media revenue issue. However, there are hurdles for media companies to overcome before they take the plunge into partnership.
It isn’t a simple done deal
Media companies know they need to diversify their revenue, and they also know this can be done through partnership. The problem: Every company wants to partner but, in many cases, find that the ends do not justify the means. In my opinion, this is due to three main issues.
First, companies know that brands and users want their content, and also believe they are in demand from advertisers. As such, many have an unrealistic and rather romantic concept of what it is to monetize – so they hold off until they find that “one true love”.
Second, many media companies still fail to invest in technology. This can be in the form of outsourced Information Technology resources, or a skeleton crew who handle User Experience, design, programming, Search Engine Optimization and security all under one roof. The digital age demands digital focus, rather than it being an afterthought. Legacy media should know by now that they cannot rely on outdated business models and techniques to survive into the new media landscape.
Third, and perhaps most difficult for media companies to overcome, is the fact that they have been cheated many times before. Perhaps they did partner in the past and the results were simply not there. Or the partnership became more work for less reward. Like the famous, deceptive sales line: “It is just a few lines of code, it is easy.” In any case, failed media relationships of the past continue to haunt some companies and give them cold feet going forward.
Regardless of whether the company has been burned before, lacks the right technology, or simply has unrealistic goals, that same media company still needs to resolve the revenue issue. This will be difficult but not impossible. A positive outlook is key to secure success through the paywall and beyond, and this can be done by embracing future-forward technologies and business strategies.
Publishers take a lot of care for their brand and what it stands for – and rightly so. But simultaneously traditional media companies cannot rest on their laurels and past success. Shifting landscapes require flexible management to find new revenue models that do not overtly impact content and which users can agree to. Paywalls have shown promise, but partnerships are likely where the future lies. At the very end, only the brave will survive.