On 13 November 2018, Bibblio, with Media Voices, What’s New In Publishing and Sovrn Holdings put on ‘The Present & Future of Publishing’, an event exploring key industry developments in 2018, and a look forward to what will be making headlines in 2019. Here's some of what we learnt.
With so much covered, it would be impossible to sum up everything in one recap, but in this part we’ll be looking at the presentation of the Media Moments 2018 report. The report, produced by Media Voices for What’s New In Publishing, explores seven key areas which have influenced the media and publishing industry this year, from reader revenue and platforms to advertizing and data. It finishes with a look at some of the key opportunities for 2019. There to introduce it on the night were the team behind Media Voices, Chris Sutcliffe, Peter Houston and Esther Kezia Thorpe, who delved into some of the key takeaways from the report.
Chris started by exploring the stark reality of the Duopoly (Facebook and Google, for anyone not haunted by the term) and the effect that their control of the vast majority of ad spend has on publishers. It’s something that worries the industry, unsurprisingly, but he argued that things can change very quickly. Amazon has shown that new entrants really can muscle their way into the space. It was probably inevitable that they would try, since 90% of Amazon searches end with a purchase, and that’s a place advertizers want to be. Chris conceded that that doesn’t necessarily create a lot of hope for publishers, but it does show that the landscape isn’t immutable. Things will continue to change and there’s room for innovation. This year, ad alliances have sprung into being, Buymedia has expanded beyond Belgium and there have been other unexpected developments. Chris’ message was that as much as it can feel like publishers need to hop into bed with Google and Facebook to be successful, that’s not necessarily true. Things are always in flux, and there isn’t just one path to success.
Peter Houston took up the theme of how power has been concentrated in what we should perhaps think of now as the ‘Trioploy’, given the nature of Amazon. As the Triopoly hoover up ad revenues, many publishers have started looking to reader revenues. That’s subscriptions, digital subscriptions, memberships – taking money directly from readers for content. A couple of years ago there was a ‘pivot to paywalls’, and now that that has settled down a bit, people are starting to care more about how to actually retain readers. Churn in consumer magazines is somewhere around 30%, and it’s 4-5x cheaper to retain subscribers than it is to acquire new ones according to research by the FT. That’s a powerful incentive to work on retention.
It’s even more important than those figures make it sound, because consumers are going to start making choices. People won’t just keep adding subscription after subscription after subscription. If you’re going to avoid churn, it’s essential that you deliver on your promises. Publishers are recognizing that, and there’s a lot of work going on around engagement and personalization, more with the aim of keeping people than finding new people.
Esther discussed the platforms, aiming to keep the focus quite narrowly on what has affected publishers, since to write about everything would have taken a book, not a chapter. One thing that really stood out to her was that 44% of 18-27 year olds in the US have deleted their Facebook app. Facebook has had problems. According to a recently released report, it’s the least trusted social platform. Growth has also plateaued in the western markets, which are the most valuable. But, Facebook owns Messenger, WhatsApp and Instagram, and none of them are having any problems with growth at all. It remains to be seen what will happen in 2019.
Next, Peter brought up commodity print. He said it’s take an absolute kicking. In the last ABC report, women’s weeklies have seen a fall in circulation of 40%. Being in commoditised, undifferentiated print is not a good place to be. On the other hand, if you have a very specific point of view that people value, you can do very well. The Spectator is a case in point, with good growth and their biggest year ever, selling 65,000 copies between subscription and newsstand. The editor, Fraser Nelson, said that it was digital that drove that growth, specifically a web trial publicized in newsletters. The Week Junior, a current affairs magazine for children, has grown 30%. These are the sorts of things that are winning in print, and it seems like it’s coming from digital and print working together. Finally, print and digital are helping each other out.
The next topic was trust in the media, which Chris introduced. He said it’s been a bugbear of his for a while, and he feels like this was the year that issues with trust in the media really came home to roost. He was particularly alarmed by the way that some politicians seem to be trying to exploit distrust of the media for their own ends. It’s not just distrust. He said that 1 in 5 people now just ignore the news completely. That’s not people being ignorant of the news, it’s people making a deliberate choice to avoid it. This is a problem, because trust is really the base success metric for news media. This year particularly, where we saw so many issues around the media more generally: falling advertizing revenue, inability to convert people to paying subscribers, really biting, the idea that people don't trust the news anymore is particularly troubling.
As depressing as that is, there are a few real causes for hope. People do tend to trust public media, like the BBC, a lot more than they do private media. People tend to trust their own local sources of news a lot more than they do the national news. So Chris sees real green shoots here. Because trust in media is the basis on which people buy news - they won't buy news from sources that they don't trust - you do get the sense that the local media, as relatively under-resourced as they are, will be able to find their footing again. What’s more, despite the problems, some news organizations are basically building a business model on the fact that people trust them. For example what The Guardian is doing with its membership scheme, what The Atlantic's doing with The Masthead, what Quartz is doing (today they announced that they're launching a new memberships section). You can see that there is a business model as long as you have that trusted relationship with an audience. So there’s hope.
Peter Houston carried on with the theme of business models. He talked about one of his heroes, David Carey, who ran Hearst Magazines for years. About a decade ago David Carey said: you need five or six revenue streams to run a publishing business. This year, Reuters did a digital leadership survey, and guess what they said: you need five or six revenue streams to run a publishing company. Advertizing and subscriptions, or reader revenues, are two of those, you can perhaps add events and e-commerce too, and then it's up to you. The question of how are you going to structure these alternative revenue streams is the most interesting part. It's all about adding value. Just throwing stuff out there and hoping that people will pay for it is done. You could create an archive model like Esquire, then sell a subscription directly to that archive. You could create books out of your recipes, like allrecipes.com did. You could offer consultancy services, like some of the B2B publishers do, or talk directly to the readers and giving them advice about the markets they're in. You have to figure out what adds value to your audience. If you can get that ‘mix of six’ going, then you've got a sustainable business. If you’re just looking at digital display, or even print display, you're in trouble.
Esther mentioned GDPR as well, and the problems it’s caused for European consumers trying to access US sites, but the main thing for publishers to be aware of, perhaps, is the fact that the US is contemplating their own GDPR-style rules. Things could get interesting.
Chris finished things off on a positive note, announcing to the audience that 40 percent of Slate's revenue will come from podcasting this year: those aren’t incidental numbers anymore. Slate's sister company, Panoply, are going solely into the provision side of podcasting, e.g. advertizing and programmatic. Chris said that what this stat proves, more than anything, is that there is room for growth in the amount of content that we consume. New touch points like podcasts give publishers new ways to reach their audience: there is a huge opportunity there. It’s not just podcasts - you only have to look at what Vox is doing on Netflix with its explained series - what the FT is doing with VR, essentially virtual reality programmatic.
There are opportunities here for publishers to reach audiences on these new channels, and as Peter mentioned with that 'mix of six', you can’t rely on one or two revenue channels, especially bigger publishers. A lot of that ‘mix of six’ is going to be coming in from these new sources of revenue, whether that's podcasting, video, partnerships with platforms, or something else.
Chris said that they wanted to end the report with hopeful thought: publishers won't necessarily be able to rely entirely on advertizing or subscriptions anymore, but if you can reach an audience with content that really matters to them then you do have a great business model. Slate and Panoply are a great case in point, with podcasting. There’s a real sense of hope among publishers who are investing in these new ways of reaching audiences: a sense that they'll be able to thrive, and they’re not just running down the clock like a lot of print newspapers in the UK are. They're actually going out, finding and reaching new audiences.
Some of these points aren’t necessarily revelatory – people have said them before – but 2018 was the year where we saw them go mainstream. That’s a great source of hope.