Diversifying revenue for long-term success

In the ever-changing landscape of news media, diversification is key to sustainability. In this session, we heard how publishers from across EMEA are exploring new revenue streams beyond their ‘core business’ of journalism, and how executing these strategies can assist with their long-term success.

Our moderator, Dimitra Letsa, Strategic Partner Manager, News and Publishers at Google asked our team of panellists Yvette Dimiri, Director, Stears Nigeria, Jim Egan, Principal at FT Strategies, Liz Moseley, Managing Director at Good Housekeeping, and Keith Underwood, Chief Operating & Financial Officer of Guardian Media Group, what they were doing to diversify their revenue successfully, and what lessons they had learned along the way.

Opening the discussion, Jim Egan, Principal at FT Strategies and our resident expert on Building Resilience: Diversification Strategies for the News Media Industry, set out why there is still money to be made in the business of journalism if you look for adjacent revenue lines to support the core product.

He compared the bold attempt made by HMV to move into live events to the FT’s more cautious and gradual approach to diversification by moving into the specialist B2B publication space, then specialist event, management consulting, executive coaching and so on. “It’s important to learn how to do diversification well, rather than overreaching into alien territories that risk damaging your core brand values and can come at a significant financial expense as well”.

Self-proclaimed ‘wild card’ on the panel, Yvette Dimiri, Director of Stears Nigeria, an African data and insights provider, described how her company ‘did the opposite of diversification’ and ‘doubled-down’ on their professional subscriptions model at the time of the elections.

“We took the FT Strategies North Star programme and executed it pretty near perfectly. It was a pretty big bet on reader revenue, and I had to trust my instincts”

She said consolidating into one product, shifting focus to B2B and branding themselves the ‘Bloomberg of Africa’ “feels like we’ve hit a goldmine in terms of the commercial viability of the product. Compared to when we focussed on B2C, we’re about 13x the contract value, so that’s a good story for us”.

Though the change was difficult, she said, the change was evidenced and supported by the ‘close relationship’ Stears built with their customers, which Dimiri described as a ‘source of innovation - and new revenue’.

Echoing the importance of being reader-centric, Keith Underwood, Chief Operating & Financial Officer of Guardian Media Group, shared how geo-diversification adds resilience to their model.

“At the Guardian, we were a pioneer for online journalism and that has accelerated the business. We are more digital, more global and more reader funded than ever before: 70% of our revenues are now digital; 35% of total revenue is from outside the UK; 50% of digital revenue is from outside of the UK”.

He went on to add how finding new formats can engage audiences in new ways, “we’ve just done a deal with Sony to get our journalism out in a TV & Film format, out to more people, engaging them in new ways, in new formats” as a way of further diversifying their offering.

Coming from another angle, where print revenues remain high, Liz Moseley, Managing Director of Good Housekeeping pressed on how important it is to ensure your diversification efforts align with what your readers want, and act as a continuation of your brand and ergo, reader trust.

“Our second biggest revenue stream after circulation is our affiliation revenue. We have a big hangar out in Heathrow where we have people testing all sorts! The reason why Good Housekeeping is still here and growing is because of this institute. We give tested product advice to help consumers make informed decisions. We’ve always held ourselves to the highest standard of trust that has a halo effect on the rest of the brand”.

While explaining licensing and affiliate revenues were strong, she aired caution around looking for new revenue sources, “diversification has always been on the list of things we want to do. Sometimes when we try to focus on it too much we forget what we do really well which leaves money on the table, like taking a true and authentic audience story back to market”.

Good Housekeeping is rare in that they are in “double digit growth with print advertising” Moseley went on to say, “which shows it still pays to do the things that you used to do well”.

Her takeaway, which received agreement from the panel, was that “you have to test and learn. Diversification doesn’t have to be as big as your core business. Start small and see what sticks”