How publishers are building revenues through innovation
At last week’s Digital Innovators’ Summit in Berlin, magazine publishers from over 35 countries came together to consider new technologies, hear from international speakers and scrutinize new business models. Amid debates and discussions about the future, however, a new saviour of the sector emerged: the reader.
Magazine publishers are using innovative methods to build their revenue streams.
The Summit saw Fipp (the International Federation of Periodical Publishers) release the ninth edition of their Innovation in Magazine Media World Report, a compendium of recommendations and predictions for the publishers of today and tomorrow.
The report sees the trade body hail a turnaround in fortunes for firms capitalising on reader-derived revenues, and a consensus among publishers that consumers are becoming more willing to hand over their cash for quality content. In fact, according to John Wilpers, the report’s author and co-editor, it is quite optimistic.
“In the nine years I’ve been doing this, it’s the first year that I actually feel the industry is in good shape,” he tells The Drum. His positivity is shared by Fipp’s president James Hewes, who says: “Innovation continues to drive out a wealth of opportunities for media businesses across the world.”
The report’s key findings focus on the changing revenue landscape for publishers, and in particular, on thawing attitudes towards paying for content. “After years of committing the media’s ‘original sin’ (putting content on the web for free) is that readers are finally willing to pay for our content,” writes Wilpers and fellow editor Juan Señor.
Paywalls, once considered a barrier to online growth, have finally begun to prove their worth with publications like The New Yorker using ‘dynamic paywalls’ to find the perfect balance between tempting readers in, and making sure they pay for what they take away.
Subscription sales are back with millennial readers – inured to the habit of subscribing to services like Netflix and Spotify – identified as having big potential for publishers. “The audiences of the future are past the whole ‘information is free’ thing,” the report concludes. Wilpers, who suggests that millennials are now among the biggest subscriber markets, thinks that this is especially benefiting print publications. He says: “They're doing it as a respite from their daily eight hours in front of a computer screen.”
There are other models to consider. The Guardian, recently dubbed “the poster child for memberships,” has developed a model that appeals to its readers’ hearts as well as their wallets, selling optional memberships that allow readers to support the paper and its magazines. The fact readers can still access the same content without paying might sound counter-intuitive, but it has worked.
Underpinning this renaissance in reader revenue, Wilpers says, is an embrace of diverse business models. Publishers across the board have begun to offer commercial advice services, affiliate services, data-driven e-commerce, events, newsletters, product licensing and programmatic.
The report highlights a partnership between The Oprah Media Group and cruise ship operator Holland America Line, in a deal which has seen branded ships sail the high seas and cruising-inspired content appear between the pages of the group’s publications. Wilpers suggests this is providing publishers with healthier income streams and a more sustainable model for the future. “If you have ten or twelve sources of revenue and one takes a hit, it's not going to sink the ship.”
Not all of Wilpers’ predictions are potential paths to sunlit uplands. Social platforms are treated with a degree of skepticism in the report, with Wilpers likening Facebook’s relationship to publishers to that of a drug dealer.
Without recommending the cold turkey treatment, Wilpers suggests that recent events have already begun to wean content creators off. “Fortunately this algorithm change has woken publishers up,” Wilpers says, “not to abandon the platforms altogether, but to finally use them just like the platforms are using the publishers. They're in business to take advantage of us, and we can be in business to take advantage of them, rather than relying on them as a platform.”
The Fipp report has more time for newer technologies that can be used to explore new narrative formats and mediums – chatbots, horizontal storytelling and audio, to name a few – and for possibilities held by the Internet of Things. Wilpers highlights Time Inc. publisher Meredith’s partnership with Samsung’s home appliances division, which has seen the manufacturer combine smartphone apps that monitor refrigerators with the publisher’s home cooking content.
The report’s findings point to a potential host of opportunities for savvy media brands, and Wilpers’ outlook is certainly upbeat. However, he concludes, it is up to publishers to act on them. “Getting a legacy company to see that the future is in all of these new and different things and then empowering their employees to pursue that is a real tough thing. We will see great success among many companies, but we'll see very tragic failure among companies that don't accept the new exchange.”
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