Beyond Digital: Re-Inventing Publishing from a Value Perspective
There is not enough perceived value in digital content to sustain the revenue-streams publishers require to maintain their editorial quality.
Publishers around the world are beginning to switch from a product-centric view of publishing to a value-centric one.
This implies a fundamental change, switching from publishing a newspaper to focussing specifically on delivering value based on content, expertise, curation and trust in the brand.
The trend towards mining available assets at a publisher to find new ways of engaging with customers is here to stay.
(This is part 2 of a two-part series on re-thinking publishing. The first part is here)
Since the first part of this article was posted a few months ago, the mood around digital publishing has considerably darkened, and what I initially suggested as a personal view has since solidified to attain an aura of inexorable truth: the perceived value and the monetization prospects of digital content are constantly diminishing. While Facebook proudly boasts billions of daily content views, only very few participants in the production chain of the content in question seem to be able to make decent money from it. And things are not getting better in terms of advertising either. Roughly 80% of the money spent on digital advertising go to Google or Facebook. Bullish views on the value of social propagation of content are sadly reminiscent of the early days of the web: the common hope that “as long as you get the eyeballs, revenue just has to follow” has been proven wrong over and over again. “For dollars in print you get dimes on the web” the saying used to go, and “for dimes on the web you get pennies on mobile” is the sad second part to this statement.
But enough said about the problems of digital publishing. Let’s look at some potential solutions — and consider some alternate routes to defining what publishing is about.
Starting with a few assumptions
If you boil all the doom-and-gloom stories about the monetization problems of digital media down to their essence, what emerges is simple: there is not enough perceived value in digital content to sustain the revenue-streams publishers require to maintain their editorial quality — and however bullish one may be about massive social distribution, while it is certainly good for Facebook’s bottom line, it is much less so for publishers. One might want to question if viral content is a sustainable business model at all. But that’s a discussion for another day.
And then there is the problem of scale: on-line content favors big brands, and what may be an excellent (or at least acceptable) way of making money for a huge media brand such as the New York Times and a few others may be hopelessly inefficient for smaller publishers.
Life beyond digital
I concluded the first part of this essay with the words “The point I’m trying to make is quite simple really: instead of looking at the realm publishers function in as being predominantly digital, with print being at best a leftover from an increasingly anachronistic past, we should forget about the whole digital/analog divide for a moment and place publishing in the real world. Even if we have our hands full keeping up with the increasingly convoluted technology landscape, we should simply forget about the delivery aspects of what we produce, to focus on what the actual, real-world value is that we are trying to deliver to our customers.”.
The operative words here are real-world value. It is becoming increasingly clear that in order to have proper monetization of professionally produced editorial content, the digital realm alone may not suffice in the long run, however starry-eyed some analysts are about the prospects of mobile advertising. Rest assured, in no way, shape or form am I trying to minimize the importance of digital content and social media distribution. But I also have looked a lot at what publishers around the world are doing — and it has made me realize that a secret revolution may be underway.
Convenience vs Value
How much perceived value does Facebook have for the average user? What about Google Maps? Or Snapchat, WhatsApp, Buzzfeed and thousands of other on-line services? Well? We have of course no way to be certain, but it seems rather likely that if any one of the most popular on-line services and platforms charged even a minimal amount for their use, only a small fraction of users would be willing to pay. Which in turn means that while users undeniably perceive the convenience of these services, they much more rarely seem to see actual value.
Traditional media companies, on the other hand, always had to deliver value to their customers, since they usually charge for their wares. Perceived value and some form of excellence was always required in this field – after all, customers vote with their pocket-books, not with a simple click of the mouse.
RIP Product-centric publishing?
It all started with a simple necessity: given that distribution and ad-revenue of newspapers (and to a lesser extent magazines) are diminishing, publishers started to investigate alternate revenue streams, exploring new ways to make money. (WAN-IFRA has an excellent report on the subject). Events, in particular, turned out to be a very serious source of additional revenue for publishers as diverse as New Yorker, Le Monde, The Guardian and even digital pure-players such as Recode, to name but a few.
Yet what is happening in publishing these days goes well beyond text-book diversification of the business portfolio: the revolution that is shaping up is akin to deconstructing a building and re-assembling the pieces in a new, more efficient way. Or, to put it differently, it is about going from a product-centric view of publishing to a value-centric one.
In very basic terms, this implies a fundamental change, switching from publishing a newspaper to focussing specifically on delivering value based on content, expertise, curation and trust in the brand. In other words, it is based on using a publisher’s key available assets, which range from brand recognition, familiarity and trust, to the available in-house expertise, and redefine from the ground up what perceived value can be created and monetized. And very often that value is not simply the content, but various other real-world applications of editorial excellence and know-how.
What is rather remarkable about this trend — and what makes me think that the term revolution may not be too extreme — is that for the first time since the arrival of the web, a media trend is not directly defined by a technological evolution, but rather by aspects of life that lie squarely outside of the digital realm. In the words of Andy Hart, SVP and Chief Revenue Officer of Hearst: “We need to give experiences to readers that meet their human needs”.
A few examples
One of the key aspects of value-centric publishing is not just to diversify revenue streams, but to realize that the competencies that allow publishers to produce excellent editorial content can be used in a variety of ways. In fact, editorial vision that binds together the different, seemingly unrelated activities can be essential.
An excellent example for the value-driven model is Die Presse, one of Austria’s oldest newspapers (it has been around since 1848). A couple of years ago, the editorial team had the idea of mining the considerable available archives to produce a one-of history magazine. It was a gamble: a perfect-bound, almost book-like publication that was produced entirely in-house, and sold in news-stands and bookstores around the country. A shot in the dark that proved very successful: despite little or no dedicated marketing, and with a break-even point at around 4000 copies, within a few weeks, tens of thousands of copies had been sold; the initiative has since been copied by several competitors, and several follow-up issues have been produced by Die Presse.
Over the past few years, the paper managed to bolster its revenue and competitive advantage significantly by diversifying print products for niche markets: there is a publication for luxury real estate, for instance, a glossy magazine that draws significant advertising revenue; special issues of the newspapers for significant events such as the presidential election; and even a high-touch product guide for the curated store for selected products that the newspaper runs. An influencer magazine for the affluent central district of Vienna is also in the works. In other words, Die Presse uses print in a very targeted way, not as an additional output channel for on-line content, but as an increasingly diversified way to engage with customers.
But print is not the only area where the newspaper diversifies its activities: Die Presse now produces a range of different events, some of them B-to-C, others B-to-B, and it operates a curated shopping site as well as an actual store in Vienna. But the most interesting aspect of these new revenue streams is that they are held together by a coherent editorial vision, and give the staff of the newspapers new ways of using their professional capacities.
While Die Presse may be an outlier in terms of diversification, many publishers have realized that it has become essential to reach outside of the digital realm to connect with customers. Le Monde in France has not only stabilized print distribution, but it has managed to establish its weekly M Le Monde magazine section as one of the leading trend and lifestyle publications. Le Monde is betting squarely on fast-paced innovation to stay competitive, and has developed a wide range of events that contribute significantly to the revenue stream..
How crazy is crazy?
Other publishers go to even greater extremes to provide value to their customers: The New York Times, not known for being particularly shy when it comes to experimentation, last May initiated an interesting experiment: the paper started a service to deliver meal-kits that go along with special recipes on the NYT Cooking website, teaming up with a food delivery service. This may be one of the more far-out ideas, but it certainly proves the point that what is most critical today is to deliver real-world value, not only digital content.
Another very interesting example is the crowd-funded dutch website The Correspondent, which focusses on quality journalism and does not use advertising: in order to publish Utopia for realists, the acclaimed book by Rutger Bregman, one of their writers, the company went as far as starting a book publishing imprint.
Turning brand and expertise into value-centers.
The examples above actually only scratch the surface. Based on a publisher’s key assets (Brand, Trust, Content, Expertise, Editorial Team) there’s a wide range of value-centric activities that can be developed. Below are some basic ideas. Any comments and suggestions are welcome!
Connecting people in the real world
- Study or discovery tours.
- B to B activities.
Delivering value through curation.
- Magazines or books based on the available archives.
- Curated e-commerce sites and physical stores.
Delivering value through knowledge and expertise
- Magazines or books that provide in-depth analysis on burning economic or political issues.
- Providing advice and assistance through available expertise.
- Provide information and events for highly motivated vertical markets such as gaming or cooking..
But these are just some ideas to explore. One of the most important aspect of this value-centric approach is that it can be highly motivating for the staff of a publication to realize that they there is room for experimentation and that their creativity is valued.
Even social media platforms have realized that something is changing, and that simply providing algorithmically selected content does not meet all of users needs any more. Facebook for instance, very recently debuted human-curated lists of “Featured Events” in 10 US cities.
In any case, mining available assets at a publisher to find new ways of engaging with customers and finding new ones is here to stay. There’s life beyond digital…