Revenue Europe will be hosted in Berlin next month where FT Strategies’ Managing Director, Joanna Levesque will present the key strategies for creating diversified and balanced revenue models. Ahead of the event, Media Makers Meet (Mx3) interviewed Joanna to learn more about her thinking on how publishers should approach revenue diversification.
1. Imagine our audience will meet you for the first time. Can you briefly introduce yourself and FT Strategies?
I’m passionate about organic customer or audience-led growth and have spent my career working with a variety of organisations across a range of industries to deliver profitable growth. On a personal note, I enjoy running and travelling with my family. I joined FT Strategies in January where we focus on deploying dynamic digital transformation programmes to help the news and media industries achieve sustainable growth. We have delivered strategy, commercial growth, operational transformation and technology and data advice to more than 700 media organisations globally since we were founded in 2020.
2. The only way for media to survive commercially now is through building diversified revenue models. Do you agree/disagree with this statement and why?
I would agree with this statement, but I would also say that this isn’t necessarily a new phenomenon for media organisations. I was struck listening to Liz Moseley (Managing Director of Good Housekeeping) at our recent event talking about how Good Housekeeping’s financial success has been underpinned by a 95-year-old affiliate and product testing business - Good Housekeeping Institute. Although giant warehouses of cleaning products may not be the first thing you associate with media organisations, non-core revenue streams often have a higher profit margin and more room for growth.
We recently published a whitepaper on the topic of revenue diversification and it supports these anecdotal findings. Here is a relevant extract that I think is worth sharing:
One route to financial success is diversification. By transitioning away from a single audience segment or single product, news organisations can mitigate the risk associated with “revenue concentration”, a situation where a significant portion of a company's revenue comes from a limited number of customers or a single product line. This bears out in the news media market, according to our recent study based on data from more than 400+ publishers: news organisations with four significant revenue streams (of 15%+) had higher profit margins and better overall sustainability scores.
3. What media organisations are impressing you today with regards to revenue strategies, and why?
There are many examples, some more well-known than others. One that is slightly off the beaten track is Time Out. Time Out faced an existential crisis in the 2010s where the decline of print media was forcing brands to transform digitally. Rather than prioritising digital transformation, in 2014 Time Out branched into completely new product territory by launching its first-ever Time Out Market in Lisbon in the historical Mercado da Ribeira. Time Out described the move as a “physical representation of Time Out, bringing the best of the city’s restaurants, bars and cultural experiences together under one roof, and pointing the way forward for a new era of expert curation”. By 2019, it had opened in five new locations across North America. In an incredible turnaround, revenues from the markets outgrew its historical print product.
Looking at their most recent full-year fiscal report from June 2023, we can see a successful example of diversification at play. Not only have revenues from Markets outgrown digital revenues, but in 2022 Time Out decided to halt its print activities following the success of its pivot to focus on digital-first. It has now added new editorial talent, covering 333 cities in 59 countries. As a result of all this work, EBITDA was positive in 2022 for the first time in almost a decade, all while over-doubling its revenues.
The below graph that we put together highlights just how incredible that turnaround has been.
4. What are some of the conversations you'd be keen to have with fellow attendees in Berlin?
I’d love to hear from them about their challenges in revenue diversification and also about how they are thinking about attracting younger audiences - a related challenge that we are working on with a number of clients.
See Joanna Levesque speak at Revenue Europe on 1st October, featuring a world-class lineup of international speakers. You can view the event agenda here.
