The playing field is starting to level between the most-savvy traditional publishers and top digital native publishers.
Established print publishers Forbes, Hearst Digital Media, Conde Nast Digital, and the Washington Post posted impressive double digit audience growth while once hyper-growth digital native publishers like Buzzfeed and Gawker saw flat or declining traffic growth.
Both have massive audiences with global reach, savvy newsrooms that create omni-channel content around the clock, and a technology infrastructure that brings speed, efficiency and intelligence to the forefront. The degree of convergence will only accelerate as we see old-school publishers try to be more like the new-school ones, and vice versa.
Digital native publishers, for example, aspire to have the credibility that traditional publishers carry and they have continued to hire well-respected journalists to earn more of that street cred.
As Netflix pours more money into creating quality content to be taken seriously as a movie producer, digital native publishers will invest more in quality journalism to establish their legitimacy as news outlets (vindicated when a digital publisher like Vice wins a Pulitzer Prize in Journalism).
So as the lines start to blur in the news and publishing industry what should the most innovative publishers do to grow their business?
Here are some ideas:
Messaging Will Be The Next Frontier For News
2015 was the year that all major tech companies showed publishers how important news is to their product strategy. News consumption passes the “toothbrush test” so it’s no wonder why each have a centerpiece news product: Apple News, Facebook Instant Articles, Snapchat Discover, Google’s AMP, Twitter’s Moments and LinkedIn’s Pulse.
This has been a tough dilemma for many publishers who have been wary to cede distribution control, user experience and ad sales to the tech behemoths, but it has been hard to resist the massive reach, influence and cachet that come with these partnerships.
At this point, though, most publishers have learned to embrace BuzzFeed Founder Jonah Peretti’s worldview that it doesn’t matter where your content lives. This will be even more true in the future as new platforms emerge and uncover ways to make their products sticky.
One important milestone occurred last year when messaging apps surpassed social networks based on number of monthly active users. As messaging apps grow in scale, they will continue to evolve as service providers with news being a key component of their offerings.
Out of all the tech giants currently partnering with news publisher, Facebook stands out as the only one with a dominant position in messaging. Its Messenger and WhatsApp products boast a whopping 800 million and 900 million users each month, respectively, which is roughly 3x the users on Twitter and 4x the users on Snapchat.
In the year ahead, there’s a strong possibility that we will see Facebook deepen its partnership with publishers as the Menlo Park-based company transforms messaging from a peer-to-peer communications platform to a full-service platform that connects publishers, brands, and people.
We’ve already seen hints of this change with Facebook opening up its Messenger API in December 2015 and WhatsApp dropping its $1 annual subscription fee (inferring a shift in monetization strategy from subscriptions to ads or services).
If it closely follows the playbook of popular messaging apps like WeChat and LINE, Facebook will eventually introduce news and publishing services within its messaging products that will require publishers to weigh the costs and benefits of another platform integration.
Media innovation will be crucial to a publishers’ success in messaging as publishers will need to further build out their in-house capability to create news in new formats like Snapchat’s vertical videos or Periscope‘s live streaming.
The challenge for publishers will be determine how much to invest in these experiments and whether the return on investment is attractive enough. As Facebook deeply invests in its ability to help scale publishers’ reach and monetization, it will be a hard offer to turn down. There are powerful motivations for Facebook to see their messaging-as-a-platform strategy succeed and they will look to publishers to help them achieve their goal.
Audio Is The New Video
The widely accepted truth today is that premium publishers need to create more video content to capture as much the $9.59 billion expected digital video ad spend in 2016 as possible. In the last two years we have seen publishers like Conde Nast, Elite Daily, and Time Inc. invest significantly in video content creation and there are no signs that this will recede.
As video has become a de facto part of publishers’ strategy there still remains white space in one medium: audio.
Digital audio storytelling will finally become mainstream as the percentage of internet-connected new cars sold will shift from 20% (today) to 100% by 2025. This trend will lead to the death of AM/FM audio that Americans listen to for over 2 hours daily.
The digital audio platform wars have already begun with streaming services like Spotify, Pandora, SoundCloud, Apple’s iTunes and Podcasts, and Google Play Music all vying to become the de-facto distribution platform for music, podcasts and digital radio.
“Automotive is our fastest-growing listening category,” says Geoff Snyder, Pandora’s VP of Business Development.
However, as with text and video content, these platforms will need publishers to create great audio content that are unique to their brand.
There are already signs of investment in audio content creation by traditional publishers such as The New York Times and Washington Post that have each created 40+ episode series exclusively for podcasts.
At the very least, all publishers should seriously consider creating and promoting content across text, video, and audio. Vox does this really well with its Re/Code podcast interviews that they use as source material for articles and cross-promote within articles (see example here).
Although publishers may be hesitant to invest in digital audio given it accounted for just 4.7% of total US digital ad dollars spent in 2015, 80% of music industry professionals expect ad spend to increase over the coming years.
There also remains the potential of connected home devices like the Amazon Echo to play your favorite podcast or update you on news and sports scores while at home. While the future of audio is not crystal clear, it makes a lot of sense for publishers to start experimenting today instead of playing catch up tomorrow.
Publishers As Software Providers
News publishers still predominantly rely on advertising and subscription revenue to make money. However, both revenue streams have become harder to rely on due to increased competition by media startups, lower ad rates on mobile, increased usage of ad blockers and the general trend that most millennials do not want to pay for news.
As a result, publishers have been forced to rethink their value proposition in order to tap into alternative revenue streams. In a recent survey of over 400 publishers, 60% believe that monetization will be their biggest challenge.
It’s no surprise then that we have seen publishers try a variety of different tactics.
We have seen publishers become creative agencies — such as Vice’s Virtue or HuffPost’s Partner Studio — where they help advertisers connect with audiences in a more authentic and natural way often through the lens of creating branded content.
We have seen publishers become research institutes — such as BI Intelligence and the Economist’s Intelligence Unit — that provide data and analysis for a healthy subscription fee.
We have seen publishers become event organizers — such as Forbes’ Summit Conferences and Re/Code’s Code Conference — where they leverage their brand and bring people together around topics specific to an industry or C-level executive.
But why haven’t we seen publishers become software providers?
Leading digital publishers have technology at their core and have developed in-house software to help them manage, create and optimize content creation.
Hearst developed its proprietary CMS platform, Media OS, to streamline its magazine operations, break down silos between departments, and focus on data insights to drive its content creation approach. The platform allowed Hearst Magazines to move from eighty templates to three, repurpose 20% of its content across its properties, and motivate its editors to deliver great content.
BuzzFeed’s data science team has built proprietary technology that powers the social distribution of content, detects what is trending on the web, and connects people and brands with the most viral content of the moment. Software has been a core driver to BuzzFeed’s success and a key reason why prominent venture capitalist firm Andreesen Horowitz invested $50M in the company.