Over the last several decades, traditional news industry (newspapers, magazines, books, journals, and periodicals) had a lot of issues which needed to be fixed from profit generation point of view, issues such as sharp decline in number of customers, loss in advertisement revenue, increase in the cost of print production and mass adoption of digital modes of distribution. In 2007, 2008, 2009, there was a sharp fall in Newspaper revenue by 9.4%, 17.7% and 28% respectively. With decrease in number of subscribers, the value of print advertisement decreased on a per-ad basis. To overcome this dip in revenue, agencies have started to adopt digital media by and large. Even the agencies whose business model revolved around tangible flow of news (through mediums like newspaper, magazines) are now switching to digital media to still be in the race.
Apparently, U.S. News & World Report moved to the web (digital media) fully from being print media as a result their subscription rates and thereby their revenues have seen a trend going North.
Another challenge for Media industry: Impact of Covid-19
The news media industry already was facing enormous change and was having to deal with a lot of issues as mentioned above. But since covid-19 struck, there are now further challenges which the media industry will have to face.
Since the start of the pandemic, print advertising revenue has collapsed down by 80%. Though newspaper websites have a good readership number but the income is little because the advertisers have slashed budgets or blocked their promotions from appearing alongside coronavirus related stories. It was also observed that news audiences are starting to decline as people get used to the lockdown.
Media analysts are predicting a long-lasting effect on the consumer behavior across the globe. The changes that were expected to take more than five years have happened in the past five weeks. Further researches say that people are unlikely to entirely return to their pre-lockdown habits.
The media industry extensively works on the concept of meeting supply with demand. Due to this pandemic, there has been a sharp increase in supply but the demand has drastically decreased since there has been a fall in the number of companies wanting to put up their advertisements to reach their target customers.
Is media industry still the most lucrative industry? Are they still making the highest profit?
The media industry was believed to be the most lucrative and highest money-making industry and the incumbent players in this industry were in no mood to change that. After almost dealing with various issues (as mentioned above), they still managed to come up with ways to monetize.
Paywalls are essentially a website feature/ filter that prevents users to view any content until they pay for it. Paywalls have been classified according to the extent of access they provide to their readers.
It requires the users to subscribe and thereby pay before they can view any of the content. This will work only if the users are convinced that the content is very high quality and they might not find such content anywhere else or it might work if the users put blind trust in your company (this is where loyalty will come in the picture).
If you do not have a bunch of loyal customers, but you are confident about your content, this paywall will help you monetize. Soft paywall is when you let the user read your content till a certain point but to get full access to the write up, they will have to pay for it. This paywall gives you a chance to prove that your content is worthy of the money that they are going to pay to get full access to it.
“Newsday.com” has a paywall in place which charges $260 per year which is pretty high. Even though the number of subscribers they had then was not even near to what they had expected but from those handful of subscribers, they still managed to have a massive revenue of $9000.
Meanwhile “The Wall Street Journal” charged $149 per year for complete online access and enjoys the highest number of subscribers and hence has a steady year-on-year growth even during economic downturn.
There are some content which requires us to just compile and sort our thoughts (basically lesser efforts) and we want it to be accessible to everybody. And at the same time, there are write ups which require extensive research, analysis, in-depth investigation etc. In this case, we would want it to be accessible only after getting paid. This combination of some articles being fully accessible for free while some articles requiring paid subscription is an ideal method for publishers who are confident about their content quality as well as their reach.
“The New York Times” has a combination of soft and hard paywall also called metered paywall wherein users can read a certain number of articles per day but post that, they will be asked to pay in order to get access to further articles.
Give free access:
In a world where every media agency is looking forward to putting some kind of a paywall to get access to their content, it might be a wise option to keep your content accessible to everybody. This will increase the traffic on your portal and will definitely attract more advertisers to put up their advertisements.
A few media agencies have given free access to their users for e.g. “The Washington post” or “ChicagoNow” has no paywall and its content is freely accessible and also is one of the most sought-after news portals. These media agencies having “free access to news” business model monetize on the basis of pageviews.
How are startups/aggregators making money: (New ways adopted by them)
Making use of analytics:
With the advent of analytics, pretty much every industry has undergone a “paradigm shift” and so has the media industry. Analytics brings about immense scope of personalization, close enough predictions, trends etc. These analytics tools are exploited immensely by media startups and aggregators which has helped them live up to the customers expectation and thereby improve their agency’s overall performance. These newbies focus on the time spent by individuals on various news genre, on the kind of news individuals prefer to read on the basis of their demographic details etc. They also ran several campaigns to better understand the kind of news people want (detailed or one liners). With the use of analytics, they are trying to personalize the App for higher customer satisfaction.
According to a survey, it was found out that the very basic reason of people not reading/subscribing to news was the fact that they do not have time.
News aggregators like “Inshorts” took leverage of the fundamental problem of the users which was “lack of time”, so they focused on time saving aspect and came up with 60 words summary of News which now is their USP.
Knowing your niche and embracing it:
A lot of aggregators are not just news providers. After a lot of in-depth analysis and research, they have found their niche and they have decided to stick to it which is keeping them in them race. There are plenty of such examples of aggregators who knew their niche and decided to embrace it.
For e.g. “Techmeme”, a technology themed aggregator), “eScience News”, a Science themed aggregator etc.
“The Athletic” for example is a fully paid sports journalism website and provides in-depth sports stories and is absolutely advertisement free. They claim to provide national and local coverage with engrossing analysis & storytelling style. They also have interactive content such as events, podcasts, live Q&A etc.
“Finshots” with its bold yet very clear motive of “cutting the bullsh*t and getting to the point” claims to provide the most latest and important financial developments in a “language you would understand” that too in less than 3 minutes. Unlike other financial media agencies, they do not post research reports or financial analysis. Instead they build stories for better understanding of status of stock market for people who do not understand financial terminologies.
A News aggregator called “Knappily”, after analysis found out that not everybody wants to go to the depth of the News, to cater to those customers, they release summary of news while for users who would want to know more about any News, they have a 5W1H framework for each news excerpt (who, when, what, where, why & how).
“Pocket” a news aggregator allows users to build an archive of must-read links. Not only that, they let you save articles, photos, videos etc. which you can go through later on, on any device of your choice.
“The Wall Street Journal”(a world class business newspaper) has always concentrated on reporting markets and best deals. It is a one stop solution for executives and business minded people. That is their USP and they have never tried to cater to other needs.
Austria’s “Kleine Zeitung” (“Little Newspaper”, a very lucrative and widely subscribed newspaper) serves only two Austrian countries. They have a “freemium” business model because of the value they created in those regions. In a survey, its readers explicitly mentioned the fact that if they lost focus (of them being a regional/local newspaper), they will immediately cancel all the subscriptions.
The whole point is that we do not want to be all over the place. Trying to cater to multiple needs will only dilute the power of the brand and consumers will end up being confused. Besides, publishers get more opportunities to capitalize on reader’s interest if they are niche in their offerings.
Laying stress on overall service and experience and not only on “content” :
Users definitely come to News sites/Apps in search of authentic, latest news but if they find it difficult to browse through, or somehow they did not like the overall experience, it is very less likely that they will visit the portal again. To ensure loyalty and repeated visits, they have to lay stress over their service as a whole. These services could include conferences, events, tours, e-commerce, advisory and consulting services. News agencies revolve around content marketing but sometimes thinking beyond content and using content to provide a service might just hit bullseye. Mild facilities like being able to share it directly on Facebook, Instagram, WhatsApp or being able to save them for later visits might help increase the user base. A few aggregators are actually playing lucratively in this arena.
Aggregators like “Feedly” is claimed to be the most aesthetically pleasant aggregators of all with their simple, clean and easy to browse vertical grid setup. Not only that, it is completely customisable in paid as well as unpaid version.
Another aggregator which is trying to aggregate the aggregators in the world of technology is “Panda”. With their expertise in technology, this App is heaven like for web designers, developers or for people having entrepreneurial instinct. What makes them unique is the fact that they follow Hacker News, Dribble, Behance, Product Hunt, GitHub etc.
In this list of aggregators winning over because of the overall experience that they provide, “Metacritic” is somewhere top in the list. “Metacritic” is a review aggregator which also includes music and games hence enhancing the overall experience of the user. In the world of aggregators Metacritic is often used as a synonym of professionalism.
“The Wall Street Journal” partnered with National Geographic to offer guided adventure tours.
“Forbes” Magazine has offered “investor cruises” to discuss finance topics at the sea accompanied by its editors, Forbes family members along with a few readers.
Never compromise on quality of content:
That being said (referring to point #3), you can never ever take your content quality for granted, after all that is exactly what is bringing you the bread. Loyalty is gained through the quality of content. A reader will indeed visit your portal/ recommend it to others only if they are convinced of the fact that the news there is latest, crisp, authentic, being updated regularly etc. Quality over everything else, always!
Relationship with stakeholders:
Media companies, in order to survive and grow, need to have a well established relationship with their subscribers, critique, partners, advertisers, sponsors or any other stakeholder. Their readers should be loyal and should be convinced that they are provided with the best service/content available in the market. Also vice versa, if the media agency understands their consumers, they can present them with tailored offerings and not generic content.
At the same time, their partners, sponsors & advertisers should be convinced of the fact that the value they are getting in return is much more than they would get from any other media agency. Here, it is of utmost importance to put value generated for stakeholders over any other factor.
Establishing that kind of a relationship and goodwill is tough and it takes more than patience and perseverance to attain it. But good things come with time and this one will be worth the effort in the long run.
Trying to build an emotional connect with the consumers:
There are real time examples where we see a media agency doing exceptionally well while some not so well in spite of them having better content, UI, overall experience etc. than that compared to the former. This is exactly where the emotional quotient strikes. Clever communication with the stakeholders, trying to win their hearts and thereby loyalty without them knowing of the same is something every media agency should strive for. Every external stakeholder will be aware of the offerings of other agencies which might be better than their own offerings but if you have an emotional connect with your stakeholders, they won’t trade it for anything and you will always have an edge over your competition/potential entrants in media industry.
These startups and aggregators should indeed focus on cost cutting as much as possible and look for creative ways to leverage what they are good at while never losing the quality of their content and readership.
The business model crisis of news industry is no more about solving one particular problem. It is more about handling a couple of problems while taking care of other factors or even worse, handling five to six problems all at once. Because of such intertwined nature of this crisis, there is no “quick fixes” or “one solution for all” per say. Media agencies will have to try multiple ways of increasing revenue and cutting costs and thereby determine which one works the best for them. What works for one agency might not click for the other. From a pool of options like: direct commerce, selling their services, lucrative advertisement opportunities, collaborations, campaigns, membership events etc. While not all ventures might be successful, experimenting and learning is part of the journey.
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