The revenue model for content publishers (in this case with publishers I refer to newspapers and news outlets) is based on subscriptions and advertising and since the dawn of the World Wide Web publishers have trusted the web to drive both: Advertising revenue through banners and also more subscribers to their traditional business – printing content on paper.
This is no longer the case. The web, and to some degree the publishers themselves, have taught us that content is free. With tablets and smartphones taking the world by storm even the common man doesn’t settle for reading yesterdays news on paper while downing their bacon and eggs. We need our news as they happen. We are also no longer content on relying on just one or two sources for our news. The (mobile) web has drastically increased the number of news sources we follow on a daily basis.
With this fundamental shift in human behaviour it’s harder and harder to build a loyal reader base and publishers are facing their ultimate nightmare: Declining ad revenues AND subscribers. We’ve already seen a number of high-profile formerly thought of as untouchable publishing houses close their doors.
So what can a publisher do?
As this change has become apparent and unavoidable publishers have started to figure out new ways of saving their business. Unfortunately the silver bullet is still to be found. The pay gate works for only the strongest brands and for some highly targeted niche players. No matter the format display ads are getting fewer and fewer clicks. Video ads have yet to fulfill their promise. Blogs and social media are stealing visitors. Google has taught advertisers that it’s all about keywords – not quality content (though with Google’s Hummingbird update this is changing back to underlining the importance of great content).
Luckily one fundamental thing hasn’t changed: We all love great content that is relevant to our lives and interests. With new technologies and gadgets we are consuming more content than ever before. So the market is there. But how to build a viable business model when everything is expected to be free?
Look at those who have gone before you
The music and film industries have been battling the same dilemma as publishing is facing now. With file sharing and torrents music, films and tv-shows are virtually free to download and consume for everyone. We want everything and we want it now. For free.
According to Jonathan Fosters, the head of Spotify Europe, the only way to fight this and teach us to pay for music is “to make finding and consuming music legally easier and more fun than pirating”. With Spotify and Netflix seeing global success with their content aggregator / subscription model that fights piracy with convenience it’s not a big leap to predict that the same model would work for publishing.
Learn, listen and adapt
Publishers have complained loudly about how Flipboard and other content aggregators leech off their content to build a business. That might be true if you think of publishing via the traditional publishing business model but as we’ve now established the world and our behaviour has changed and so must the business thinking applied to it change as well.
Instead of fighting content aggregators and the change in user behaviour publishers should accept the change (that they in part hand a hand in crafting) and work closely with Flipboard and the likes to test and build new business models based on the understanding that we want easy and convenient access to multiple sources of great content with a set price that’s closer to micro payments than magazine subscriptions. I for one would be more than happy to pay a monthly fee for Flipboard.
With the old model clearly not working it’s definitely at least worth a shot. Then again you can also just resist ’til the bitter end and see where that gets you.
All I can say is that if your content is not on Flipboard it’s highly unlikely I’ll ever read it.