Publishers are exploring a range of new business models to reduce their reliance on advertising, grow digital revenues and develop multiple revenue sources. Some are focussing on subscriptions and other premium paid services, others exploring e-commerce and affiliates, or reinventing their approach to advertising.
Below are seven approaches to new digital business models with examples from the speakers at the Digital Innovators Summit in Berlin:
1. Subscriptions focus
Media businesses are strongly swinging towards subscriptions as a more reliable and predictable way to fund quality journalism than advertising.
The Economist is now sustainable on a subscriptions only model: it does not need advertising to make a profit. By investing in social media and offering a limited number of articles in return for free registration, it continually tops up its global pool of prospective subscribers.
Online Slovakian news start up Dennik N, takes no advertising and relies on online subscriptions. They can track which articles drive paid subs, to focus their editorial strategy.
The Washington Post has broadened its reach as a digitally delivered national news brand, and tests subs offers intensively to entice readers to pay for content. Meanwhile the New York Times now has over 2m digital subscribers and works hard to keep them engaged and loyal.
2. Multi media
Long established print media brands have been exploring new platforms for their content, from stand alone video channels to books, podcasts and events, funded by sponsorship, branded content, advertising and their reader audience.
Libelle, a women’s magazine in the Netherlands, launched a video channel, Libelle TV, which now reaches 500,000 women. They have also launched live events, plus bookazines, vlogs and a fashion collection.
Olive, a UK food magazine, has launched events, awards, books, a podcast plus a mobile edition and video
VG.no has established VGTV, a daily video news channel which has expanded their reach and created opportunities for branded sponsor content. They also syndicate long form documentaries.
3. Ecommerce/ affiliates
Media brands known for their product reviews are finding ways to generate affiliate and ecommerce revenues without undermining their editorial independence.
Business Insider launched Insider Picks three years ago, identifying products that their affluent millennial audience might want to buy, creating relevant content and generating revenue through affiliate links. Revenues have grown 100% yoy over last 3 years.
Future creates comprehensive, independent, expertly researched search friendly buying guides for its specialist sites like Techradar, and earns affiliate revenue from the products mentioned.
New Yorker magazine have a similar site, The Strategist, again funded from affiliate revenue.
4. Added value services, research, consultancy
B2B media are concentrating on the needs of their most valuable customers and developing highly tailored premium content, research and consultancy services.
National Journal, a US based magazine for the political ecosystem, generated 40% of its revenue via advertising in 2010. Over the last few years they have listened to their audience and created research, reputation trackers, policy influence maps and other practical tools as part of a premium paid service. They have now closed down their advertising and events businesses and in 2017 subscriptions contributed 31% revenue and advisory services 66%.
Many media businesses have been wrong footed as key classified markets: recruitment, property, motors have moved totally online, depleting traditional print advertising revenues. But some are actively developing stand alone digital classified businesses
Axel Springer, a dominant German print publisher, has become the world’s largest classified operator, largely via acquisition outside Germany. Over the last 10 years, digital revenue has grown twelvefold to €2500m. More in this article.
6. Marketing services/ data
Consumer and B2B media brands which focus on product reviews are sitting on fabulously detailed data that maps their readers entire research and purchase journey. This is invaluable to their advertisers, enabling them to market far more precisely.
IDG, the US based enterprise IT media owner, interrogates both its own in-house data via reader registrations and adds in third party data, to provide advertisers with deep insight into buying behaviour. Their ecommerce partners generate significant revenues.
Aller Media, a long established publisher in Finland, has developed a new business in marketing services, creating quality marketing content for brands. They have also developed Data Refinery, a new service combining data from multiple sources to provide brands with a more comprehensive view of their customers and prospects.
7. Analytics platform
Most media businesses realise that they need to think more like tech businesses, employing more developers and analysts, and adopting the agile test and learn culture. Some are now developing their own tech tools and making them available to other media owners.
The Washington Post, owned by Amazon founder Jeff Bezos, has invested substantially in creating an ecosystem of tech tools providing analytics, offer testing and frictionless mobile payments, plus AI to generate new headlines, predict which stories will go viral and moderate comments. Having demonstrated that this suite of tools has driven traffic and revenue growth on their own media brands they are now marketing it as a software platform for other publishers.
How can you diversify your revenues?
There are now plenty of examples of different media business models. The challenge is deciding what is the correct focus for your media brand and your audience – and the skills of your organisation. It’s worth investing the time to thoroughly research all these factors and build on the experiences of other publishers.
This article is part of a series based on speakers and panels at the Digital Innovators Summit: you might also want to read:
If you’d like to discuss how you could develop a new business model for your media business feel free to get in touch to have a chat over the phone or over a coffee.
About the author:
Carolyn Morgan has over twenty years experience launching, growing, buying and selling specialist media businesses across print, digital and live events. Carolyn now advises publishers large and small on their digital strategy and writes and speaks on digital publishing strategy.