Paywalls alone will not transform the environment; publishers need to think brand, product and revenue.
Stories of media layoffs have become so commonplace that many in the industry are now numb to them. Legacy brands like the Cleveland Plain Dealer are a shadow of their former selves; even digital brands like HuffPost and AOL have been stung by layoffs, leaving the US news industry 50% smaller by headcount by some estimates.
The search for new sources of revenue has left many to look for more direct revenue from their consumers – what Brian Morrissey of Digiday has dubbed the “pivot to paid.” But the challenge is more encompassing than just trying to add subscriber revenue and hope that will secure their future.
The fact is publishers have to remodel themselves as direct-to-consumer brands. This strategy entails changes much more profound than implementing a paywall and hoping readers break out a credit card. Direct-to-consumer brands have to focus relentlessly on building a brand, then expanding it. This is a lesson many publishers have yet to embrace amid the rush to add subscribers.
The retail example
The days of luxurious publisher businesses, represented by the Time Life building in New York, are long gone. But it’s easy to forget just how long the current shake-out has lasted: we are well into the second decade of ad dollars migrating to the duopoly of Google and Facebook and many publishers are still struggling to catch up with the times.
The retail industry has experienced something similar on a slower timeline, but with a much faster response. Amazon crept up on the big box retailers in the 2000s, running massive losses as it scaled its business and made itself indispensable to millions of consumers. But while the publishing industry is still grappling with change, a new generation of retail brands are already household names. Brands like Bonobos and Dollar Shave Club rapidly became household names by building clear, identifiable brands with defined consumers. As they scaled up, they did so in a smart way, using brick-and-mortar as a further marketing tool, while they added new products to maintain relevance and wallet share.
Brands, products, revenues
Publishers should not be blindsided by newer digital-first and digitally diversified businesses. They can’t simply lean on quality content and a paywall to build a long-term business. A sustainable business model starts with a clearly focused strategy to identify who the readers are, what content they like, how they like to engage with content, and what medium they consume content in. Once the initial thesis is tested with various “content products,” publishers can double down on creating and enhancing the products that work: from personalized home pages, editorial tones and visualizations to targeted videos of various lengths and styles and enhanced content.
Even once this is achieved, publishers will have to work to actively promote their brand across multiple channels and create a content experience that is sticky – whether it’s a new video series, enabling writers to host podcasts, or implementing content recommendation tools. The door then opens to an expanded set of revenue streams: new ad formats, events and even commerce deals, such as creating and promoting products relevant to the article, are all feasible if publishers can build a loyal base who know what to expect from the brand, and are willing to engage with it.
In fact, there are examples of successful publisher plays along these lines – Vox Media sells ads, hosts events, runs podcasts and to date has not implemented a paywall on leading brands (though they have not ruled it out). The team run by Melissa Bell has been clear that this approach has been based on a brand-first mindset, with revenue building on top in multiple ways – just as Dollar Shave Club moved from selling razor blades to the full range of toiletries.
But the environment is moving even faster, and the lines between advertiser and publisher are blurring. The range of places that media can be consumed is multiplying apace. The increasing number of video screens in public places, content consumed via mobile devices and podcast platforms, and the need to create a recognizable brand across multiple platforms is even stronger.
The challenge for publishers today is that they are trying to create a 21st century consumer-facing brand after a decades-long retrenchment of the industry. Because many are experiencing cost pressure and just trying to make their quarters, there is less time to invest and take on risks. That also means there is less scope, resourcing and executive patience for experimentation that doesn’t come up with immediate revenue. Publishers have to get creative with having external and internal help to pull it off.
It is no small order to be both inventive and ROI-focused. But that is the position that publisher brands find themselves in. They need to learn the lessons of brand, product and technology and ask themselves: if a consumer were designing a publisher from scratch, is this what they would come up with? If the answer is no, then it’s time to go back to the drawing board.