As the Danish saying goes...
“It’s tough to make predictions, especially about the future.” However, I have always found the NiemanLab “Predictions for Journalism” a great source of such inspiration and therefore, in this blog post, I will evaluate some of the most interesting takes for 2022.
Digital subscriptions, over the course of the past few years, have become the prevailing way in which news organisations build financial stability. In fact, 79% of news executives now say that reader revenue will be their key priority in 2022 (Reuters Institute). The appeal of a recurring revenue engine that is directly connected to the quality of your editorial content is obvious. However, as Chase Davis suggests: “The last year brought the sobering reminder that for even the most successful digital subscription businesses, converting new subscribers only gets harder as time goes on.”
I agree with Chase that in the long term, this could be no bad thing for subscription businesses. During periods of growth, it is very easy for organisations to get carried away with acquisition tactics – whether it's a new paid-media strategy or a change to a dynamic paywall. While these optimisations are important, they often draw focus away from the more existential questions: How can we make our product more valuable for our readers? How can we build long-term relationships with our subscribers?
Investing significant time, money and energy in answering these questions tends to pay the greatest dividends and helps businesses to reach their market potential. And, studies show that there continues to be major untapped subscription market potential within news – as exemplified below by Heidi Legg’s examination of the local news ecosystem in the United States.
The business model that underpinned the financial success of almost all news organisations remained unchanged for hundreds of years. However, an existential change in consumer behaviour and the competitive market environment has upended that historic model. The pandemic has only exacerbated these challenges, with the FT reporting that: “Coronavirus rips a hole in newspapers’ business model.”
While the industry searches for the next “viable business model”, Paul Cheung suggests that: “Successful news organisations of all varieties will stop talking about business models. Instead, there will be a focus on building up business infrastructure – to support journalism products that people will pay for and to improve their operational excellence.”
I am in complete agreement with Paul Cheung. At FT Strategies, we are constantly looking for innovative forms of diversification and they are only becoming more prevalent. The most important factor in diversification is that it aligns with your existing value proposition.
A few great examples that we have seen are:
- GK Studio launching a niche non-profit communications agency.
- Village Media building “Villager”, a digital platform built for digital news publishers by a digital publishing company.
Transitioning from a static “business model” to a more sophisticated digital “infrastructure” will provide news organisations with the foundations for future success.
The intensity and pace of the news agenda over the last few years has been overwhelming for readers. Despite news consumption rising during the pandemic, the public's overall interest in news has actually been in decline (Reuters Digital News Report). This bizarre phenomenon suggests that we should reevaluate the quantity, quality and formats of news reporting.
Tamar Charney suggests that the industry could swing back to more finite forms of news in an attempt to alleviate the all-too-familiar “doomscrolling”. By limiting the quantity and size of content, alongside experimentation with alternative formats (podcasts, newsletters), there is hope that we can improve the experience for our readers.
From my perspective, I agree that the pendulum is swinging towards a world where content is more manageable and curated. However, having said that, publishers need to speak to their readers to understand what content (type, depth, format) best meets their needs. There is no hard and fast rule here. A great example of audience listening is Will Media, who launched a country-wide listening tour involving 20 community meetings, eight focus groups and meeting 1,500 people. This process deepened their knowledge of their communities' needs and also helped to build “a better and more fruitful relationship with the audience”. Going beyond audience analytics and actually speaking to readers is here to stay.
My conclusion
Overall, I am optimistic about the direction of the news publishing industry. Although the pandemic has proven extremely difficult in so many ways, it has arguably accelerated a few necessary transitions: a switch from print to digital, a greater focus on the audience / reader revenue and finally, a greater emphasis on revenue diversification to support financial stability. Here is hoping my optimism is well placed.
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