World Association of Newspapers and News Publishers


The urgent need for publishers to diversify their approach to revenue generation

World News Publishing Focus

World News Publishing Focus
Your Guide to the Changing Media Landscape

The urgent need for publishers to diversify their approach to revenue generation

PHOTO/ WAN-IFRA

Juan Señor, president of Innovation Media Consulting Group, and Raju Narisetti, professor at Columbia University and director of the Knight-Bagehot Fellowship in Economics & Business Journalism, gave the opening and closing keynotes, respectively, on the final day of this year’s conference.

Both detailed a variety of new approaches that publishers can take to generate increased audience engagement and revenues and emphasized that failure to move beyond the traditional pillars of advertising and subscriptions would ultimately cripple news outs. 

Señor said that publishers committed an original sin when internet publishing came along, one that they’ve paid for ever since: They gave away their content for free, hoping that high traffic numbers would pay off somehow later. But the ad dollars migrated to the platforms, like Facebook and Google, leaving publishers with little.

 PHOTO/ BILL POORMAN

“It’s important that to admit we made a mistake,” Señor says. “We devalued the business model that sustained us.” He says publishers need to begin to recapture that value that they’re generating from solid journalism by getting readers to pay in one form or another. “In 2019,” he says, “if you are not asking your readers for their data or their dollars, it’s game over.” Señor set a target for publishers. He said they should work to get 40% of their revenue from readers in short order.

But, he said, that kind of revenue will only come if publishers are already creating a quality news product worth paying for. If you’re not doing that already, Señor said, addressing that problem should be the top priority. 

Señor also spelled out more than a dozen other different business models that publishers should explore, many of which overlapped with a list of more than 20 different business model options that Narisetti presented later in the day. 

Both speakers highlighted so-called branded or native content (it goes by many names), in which news publishers use their essential journalistic skills to tell an advertiser’s story. Sometimes publishers have a separate division that produces material directly, and sometimes advertisers are brought in as exclusive sponsors for content that would already be developed. There are many other forms besides those, as well. But in general, this form of advertising and marketing is expected to grow by double digits in coming years.

 PHOTO/ BILL POORMAN

Other potential business model options include holding events and festivals to bring your audience together; developing a membership program with special perks and benefits for loyal, connected subscribers; publishing special content newsletters to capture particular interest groups; launching new video or audio/podcasting projects; and seeking big foundation donations or small crowdsourced ones for special coverage areas, among many others. The exact mix of business models will depend on the particular organization, both said.

In important respects, though, Narisetti had a different message for publishers. First, he was much more skeptical of the potential of subscriber dollars. “If you think subscriptions are somehow going to solve your problems, you’re going to be wrong again,” Narisetti says. Very few visitors ever convert to paid subscriptions. For example, The Wall Street Journal, he said, is one of the best at conversions, and its rate is only 4.5 percent.

 PHOTO/ WAN-IFRA

Instead, Narisetti says, publishing companies will need a wide portfolio of businesses, all of which compliment and offset one another. “If you can generate 7 to 8 to 9 different revenue streams, some of them will be large, like advertising or subscriptions, some small like podcasts or newsletters, but if you can create 7 to 8 to 9 different ones, the chances are, collectively, you can have a growing business.”

Ultimately, Narisetti says, he thinks the future for publishers is a positive one. “I wanted to leave you with a sense of optimism,” he says. But it will require being creative and flexible when it comes to finding ways to generate the revenue needed to sustain the core product of news publishers - high-quality journalism.

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About the author: Bill Poorman is a freelance journalist, writer, podcast producer, and video producer, living in Singapore.

 

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Kimberly Lim's picture

Kimberly Lim

Date

2019-05-14 09:43

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