The media is passing through an awkward digital adolescence. With falling revenues and smaller newsrooms, the industry is being squeezed into an unfamiliar online space against its will. Publications with hundred-year pedigrees are having to rethink and relearn their trade from the ground up.
The industry has been in a downturn since 2007 and, while some publications have been plodding on, hemorrhaging cash and complaining, others — like The New York Times — have been actively experimenting with new business models in order to turn things around. The publication’s latest venture, producing a Spanish language version for Latin America, shows it has eyes on an expanding, global future.
I am optimistic that the industry will prevail, despite the naysayers. So how will the media continue to adapt to the digital revolution and monetize its content for the age of online sharing? And how might platforms like Facebook, Google and Apple reinvent our concept of the exclusive?
The challenges and opportunities of the digital age
Before the great digital expansion, broadcasters and publishers had a fairly captive audience.
Viewers were limited to the few television channels they had available or the newspapers they bought. Higher ratings and wider circulations meant bigger ad revenues, and distribution advantages gave the broadcaster and publisher greater power to monetize. Today, those advantages have all but vanished; consumers have free and easy access to many channels and are always just one click away from new content.
Nowadays, audiences are less likely to head directly to destination news outlets. Instead, they are discovering this content on social media — 63 percent of Facebook and Twitter users say they access news on the social networks, according to the Pew Research Center. This is exposing social media users to a whole range of varied content. Not only are media outlets forced to write stories that stand out from the crowd, but they also must cater to an entirely new kind of consumer.
The audience is no longer trapped in a demographic or geographical bubble.
In response, publications and marketers are creating bite-sized, easily digestible and shareable content that comes in the form of listicles, FAQs, photo essays, video content and so on. We’re also seeing a rise in clickbait — sensationalist content that attempts to lure readers with over-the-top claims, compelling imagery and shock tactics, ultimately to sell advertising.
While the reader might enjoy the content, he or she doesn’t value that which lacks substance. Nevertheless, this type of content won’t disappear; it is perhaps not unlike poor-quality tabloids versus quality broadsheets in the old days. It falls into the category of the ephemeral and of mindless fun — something that has always been popular.
However, I am optimistic that these changes will bring about an evolution of the industry, rather than its demise. The fact is, there are advantages to the new, digital world.
For one, broadcasters and publishers now have a far cheaper distribution system. When I first began distributing television content and newspapers in 1985, distribution costs could reach a staggering 25 percent. Trying to reach an audience of over one billion — as several YouTube videos have now done — would have been unthinkable.
Of course, consumers can click away from your content, but they also come to your product in the same way. As The New York Times has realized with its new foreign language ventures, the audience is no longer trapped in a demographic or geographical bubble — it can be global. Viewers, readers and consumers can now access online content from anywhere, at any time. These advantages will start accumulating and will become more advantageous as time goes by.
How digital content will be monetized
Publishers are now making content for a new generation of younger consumers. Pew Research reports that newspaper digital readership increased more than twice as fast as the overall internet audience in the age groups of 18-24, 25-34 and 35-44.
Despite the prevalence of short-form content, millennial readers are in fact voracious readers. What’s more, deep, meaningful content of more than 3,000 words is more likely to be shared, and that longer-form article gives marketers more conversions. This is good news for journalists and publishers, as advertisers will once again value long-form content, and will likely pay more for content that drives more leads.
Branded and native ad content can be seamlessly interwoven with quality journalistic content — through words, sound and moving pictures — and delivered on a nonlinear mobile platform. There is no doubt that this form of advertising content will increase in both relevance and in volume, and will replace more traditional forms of advertising. In this regard, we can draw a parallel to the old days, when advertising column inches in newspapers became 30-second commercials — now a staple of the television experience.Furthermore, the marriage of print and mobile is happening. Thanks to the prevalence of social channels, media is becoming ever more personal, and will from now on be consumed on a handheld device. This new animal will be fed with a new advertising format; multi-media and targeted ads are already driving revenues for some publishers. This will only increase.
It’s time for publications to embrace the digital revolution, because it is only going to make them stronger.
Despite broad changes to advertising revenue sources, this does not mean an end for recognizable subscription models. What we will see instead is a qualitative split in the media.
On one hand we will have short-form content pulling in low-margin advertising revenue; on the other, we will have in-depth, insightful reporting that adds value to the readership and commands both subscription fees and far higher advertising revenue.
Subscription models are sustainable for powerful media brands like The New York Times or The Economist. An established, loyal readership is always willing to pay, as the rising number of digital subscribers attests. And where less-well-known outlets — like Pando, for example — provide in-depth, original reporting, consumers will part with their cash. Subscription models will also flourish when media outlets provide utility and advice — for entrepreneurs and investors, for example.
What does the future look like?
There is an even bigger change on the horizon. We must look to digital platforms like Facebook, Google and Amazon for the future of exclusive news content.
Facebook, the biggest of the bunch, has recently allowed users to monetize its news feed with video content — giving advertisers a large percentage of the profits. This paradigm change will shift even further as this monopoly is challenged by other large platforms joining the race.
When Google news, Apple and even Amazon follow suit, the power of the exclusive content provider will go up. Platforms will begin vying for exclusive, monetized content, increasing the value of the product and making publishers more powerful, in turn.
Despite fears that it’s all over for the media, I argue the opposite — we are simply in a difficult transition from which we will emerge stronger and better. Along with the intensely crowded clickbait and popular quickie-content market, we will continue to see serious, quality journalism. The amazing cost advantages brought by free (or nearly free) distribution channels, and a growing global audience, means publishers can continue to operate and good content will still rise to the top.
And when monetized social media content really takes off, we are likely to see a return to exclusive media and a huge boost in ad revenues, shepherded in by the biggest social and commercial online platforms out there. It’s time for publications to embrace the digital revolution, because it is only going to make them stronger.