Most people would probably agree that media houses have faced challenges the last decade and that it will become even worse within the near future. Old money is running out and new money is not coming in. Simple as that.
Well – the night is always darkest before dawn! I truly believe that and would like to share some insights learned from a concept we did for Cosmopolitan. It's called Bloggazine.
The main problem, one could argue, is the customers' unwillingness to pay for online content in combination with dramatically dropping newsstand sales, subscription fees and ad sales.
One could also argue that it’s because newspapers and magazines initially didn’t charge for online content and now it’s too late and consumers have become used to getting it for free.
How about revenues?
So far the solution for revenues have been banners. Now - in print I actually enjoy ads. But the translation from print ads to banners is, in my opinion, a horrible advertising experience.
Set a side the fact that people don’t click - they also make people dislike your brand and many people even block them out with various plugins.
In Sweden we have 0.08% average click through. In Finland it’s 0.05% and the trend for this is? – Correct, sinking.
How about Paywalls
The last 2-3 years the discussions have also included different variations of paywalls. The idea is that for some quality content you need to become a subscriber. Most major newspapers in Sweden have tried this and so far the results have been quite depressing.
If you are considering implementing this, lets have a look at how it most likely will end up:
Initially you will lose about 20-30% of your traffic. This you might have foreseen but the problem will be that conversation rate will not meet your expectations at all. After all, you would never have launched it without a business plan that showed black figures after say… 6-12 months?
So now you'll be forced to remove your paywall. Back to square one with major traffic losses and lots of badwill. Not to mention the costs for the rollout. This will be followed up by internal discussions and customer surveys.
Was the pricing unclear?
Was the product to hard to buy?
Should we go for something a little more toned down?
Worse case you now start pouring money into variations of billings solutions and unified signups. There’s nothing wrong with unified sign up and trying to get users to login and share their data with you – but you need to do it for the right reason if you want them to actually do it.
Another exit in this situation is to implement a lighter freemium model where the reader is given a certain amount of free articles per day/week and then, when they see how good your product is – they'll become subscribers.
Well – I’m a bit skeptical.
Reading behaviors are completely different online. Typically readers just scroll through a frontpage to get an update rather than “reading a newspaper”. Personally I have to make an effort to actually read the amount of articles given away for free.
If the reader actually hits your freemium article limit there’s incognito browsing built into all modern browsers (even the mobile ones) making it impossible to track this (there’s various plugins as well). You might argue that most people won't do this because of conscience or lack of technical skills but that’s not correct.
Some will refer to paywall-success-stories like New York Times and Wall Street Journal. Well, problem is that there is only one New York Times and there is only one Wall Street Journal and you’re not it.
So how could they succeed (I claim their "success" may be a case of boosted numbers rather than actual success, but let's assume for now that they enjoy real actual success) – and why are you different?
First of all, thanks to the Internet, these newspapers have potential customer base of about 640 million (≈1 billion speaking English in the world 2012 - minus ≈ 20% with no Internet, about 80% are seen as grownups). Last month New York Times had about 70 million monthly visitors. There’s that small percentage that will accept these solutions - Much like for you, but in their case 0.015% is enough to show some revenues.
For non-English countries like Sweden, Denmark, Finland & Norway with high Internet penetration (and where most people are more or less fluent in English) this is devastating. Their readers used to be limited to 1 or at most 2 local newspapers – now the world is their oyster.
Who’s the most powerful media house in the world?
Traditional media no longer have a monopoly on distributing content and are in many ways actually lagging behind. Classic fashion magazines have way less readers than style bloggers and TV channels have way less viewers than YouTube stars. These guys & gals most important discovery is that the Internet isn’t a broadcast media. It goes both ways! They communicate with their readers/viewers, create relationships and most important ly- they create engagement.
Putting the power of broadcasting and communicating in the hands of everyone has given rise to a completely new situation. Regardless of what you are into when it comes to hobbies – you are now more likely to find better answers, and discussions in forums, blogs or on YouTube.
Magazines used to be the hub of trust for this.
If you were into fashion, you read fashion magazines.
If you liked cooking there were plenty of magazines to cover that as well.
Now there are plenty of extremely creative people out there that have dedicated their life to teaching you how to best fold t-shirts, create wedding invitations that fold into a castle or repair a broken model train.
For you this is a job. For them - a life mission.
Take an identical photo of my face every day for 2 years just to create a video of when my beard grows long in a 30 second YouTube video? No problem.
If you’re area hasn't been effected yet, I assure you it will be.
Media's business model is now way over 150 years old and needs to be put in perspective.
As media house you love it - Who wouldn’t? Getting money from all ends! Brilliant.
Customers undoubtedly are willing to pay a subscription fee for services like Spotify or Netflix (typically about 10 Euros per month). The simplicity in their offer is that it’s an all I you can eat buffet for a reasonable price.
In comparison a digital subscription for a daily newspaper in Sweden is about 15-20€/month. Is that reasonable? Maybe If I could have all the news and magazine content in the world delivered in one single app in a highly attractive and interactive way without advertising.
But to just read your paper?
What needs to change?
This has been quite a depressive take on media but there’s light at the end of the tunnel. However - the solution isn’t a copy paste version of old business models or experiences. We need to push forward and explore the possibilities this technology have given us, rather than trying to adapt it to the past.
Compare media with, say, the gaming industry. When I was a kid up we had board games. In the 80s came computers and video games, simple ones of course, but since then the gaming industry has kept pushing the limits and possibilities and now we have Battefield.
Isn't it exciting to imaging what media would have been with the same attitude?
There are many aspects to deal with here. Creativity, costs, fear of what the world will accept as “quality content”, tradition, production tools, amount of posts, communication with readers, proprietary rights, understanding how it all ties togehter and so on.
Instead of seeing bloggers, YouTube-stars or Instagram phenomenons as your enemies you need to start creating allies and invite them to contribute and involve them, or their content, into yours.
Or even better: create the stars of tomorrow under your brand.
In order to do his you need to start thinking that publishing is no longer a one-way street but something that you do together with your readers. Bottom line, content needs to fearless, fast, cheap and fun.
There are still advertisers out there that want to sell their products and you have visitors. Surely there must be a solution?
To quote Frank Underwood:
“For those of us climbing to the top of the food chain, there can be no mercy”
You need to do just that.
Advertisers (like regular people) can now create their own media solutions. Alone, together with bloggers, celebrities or with potential or existing customers and on all kinds of platforms. Often these solutions or “hubs” have more traffic than you. Depressing – but you have to ask yourself the question:
What you done for them lately?
Between this dark - and no longer distant future - stands a long range of agencies (media, advertising, web, social… you get the picture) wanting a share of the budget, telling them to spend more on production and social integration and less on traditional media.
So you need to be able to offer just that and then some.
You need to offer a platform that allows creative, interactive, collaborative, engaging, social, flexible solutions that deliver results, useful data and allow the advertisers brand to look better than ever before and let them and users communicate. You might think that online media is not about tech but on the contrary – It’s all about tech - and getting tech, sales and content to work together. And you need to be able to do it faster, easier, cheaper, cooler & more engaging than your competitors.
What we do
Part of why we succeeded in finding new revenues with Cosmopolitan was because they were open, brave and willing to try new ideas.
An important part of the concept was that it should be a banner free zone. Instead we created tools for the editors to create branded pages, product placement and various ways for them to control user-generated content and involve advertisers.
For the editors this meant learning basic HTML/CSS but it completely changed how they work with content, sales & their readers. Maybe even more important - they again became in charge of their own product.
We wanted them to be able to digitally create the same media magic as they done so well in print – but with the advantage of adding collaborative, engaging features and tools to their advantage.
Cosmopolitan won an award for this project. For us the biggest award was when H&M launched their spring campaign based on blogs, branded pages, product placement and all pages, design and ideas was done by the editors.
What lies ahead
This concept was a great step, but on our side it was just that - a first step. We have so many more ideas, features and concepts that we want to explore and offer to you.
The last 12-18 months we have done many projects with King.com and that certainly had an impact of how we see things. Gamification in media needs to explored further and when you involve end users in this, can you add payments for extra features rather than content?
It works for Candy Crush.
We’ve seen that the more features, modules and ideas we put into the editors hands & heads (that ended up also being salespeople) the more money they end up getting from their customers and the happier their readers were. That seems like a good road ahead, right?
"How can less be more? That’s impossible… More is more"