Is the publishing industry suffering from a lack of ambition?
In June, the Guardian Media Group announced a huge shake-up in its print and digital strategy. As well as outsourcing its printing, it is also working towards breaking even at operating level by 2019 by developing and growing its membership offering and restructuring its advertising business.
More recently, the Wall Street Journal (WSJ) also announced that it will be stopping its European print edition and scaling back its Asian edition to focus on digital subscriptions. While digital is critical to the future of news publishing, both these decisions raise questions about low targets and the benefits of international reach.
Fundamentally, this demonstrates how the publishing industry is suffering from a lack of ambition. As content is its number one resource, publishers need to ensure that their digital monetisation strategy is aligned with changing consumer behavior in order to increase revenue.
These announcements come despite a surge in subscribers and current affairs interest from readers across a number of news organisations. In fact, the New York Times revealed at the start of this year it had added a record 267,000 subscribers in Q4 2016, as consumers looked to the most trusted news outlets to gain insight on the political climate, particularly following the US presidential election results and the Brexit vote.
The Guardian’s announcement emphasises that it is undervaluing its number one resource – its content. As a result, its current ambition is too small. Instead, it should be looking at how it can build on its current membership offering and advertising business through other monetisation means, targeting profits rather than simply breaking even. A more comprehensive monetisation strategy, reflecting an increasingly mobile audience, would give it greater resources to fund its world-class journalism and deliver the quality content its readers value.
With the Guardian and WSJ both looking to increase revenue, it is time that publishers adopted monetisation strategies that better reflect reader behaviour and support how they want to consume the content available. Data shows that subscription and other monetisation models complement each other, giving publishers the confidence to monetise through a variety of methods and develop their mobile strategies further. Alongside supporting their growing subscriptions, publishers must do more to facilitate consumers who may be put off by ongoing price models and complex sign up processes.
The pioneers in digital content monetisation, like the music, film and TV industries, have demonstrated how media companies can complement subscription revenue by allowing non-subscribers to make one-off purchases of shows and music singles. This consumer habit of digital snacking is growing – driven primarily by mobile – which demonstrates consumers want and need to access content from multiple sources, discovered via social media.
Another important factor is reducing the friction on these small payments. While card transactions are slow and complex, there are now many alternative payments, including direct carrier billing, which involve fewer keystrokes and have much lower friction, making them more suited to the mobile reader. Overall, the publishing industry is yet to adapt to changing consumer habits and take full advantage of the clear trend that consumers are willing to pay for individual pieces of content that they think are of value in that current time.
Equally, with the WSJ abandoning its international print presence to focus on digital subscription, it will need to ensure that this move doesn’t damage future readership reach. To achieve this, WSJ must implement a solution that will allow them to continue to reach both existing and new readers in regions that no longer have access to the print edition.
Publishers also need to take into account that consumers in many countries do not use cards the same way that they do in the UK and US, therefore existing subscription payment methods need to adapt according to their audience. From the Middle East to Asia Pacific, and even in Germany, many countries have extremely low card penetration. To deliver content to this audience, publishers need to diversify and offer alternative payment methods for subscriptions and content – to reflect the fact that despite there being five billion phone owners globally, there are only 1.5 billion credit card owners. In many markets reaching your audience necessitates a mobile operator payment strategy.
There is no doubt that this industry has seen confidence dampened by change and disruption but now is the time for publishers and news organisations to rediscover their ambition and focus on content. Rather than scaling back or aiming to break even –they need to maximise on the readership boom.
Publishers have an audience, which is very engaged and willing to pay for content it values, however, to realise this opportunity, the options for how this audience access and pay for that content need to be more closely aligned with consumer behaviour and expectations.
Michael Tomlins is chief executive at Infomedia