In February 2013, we polled 130 publishers on the changing shape of their business and their views about the future. What is encouraging is the speed with which they are adapting to the new world of paid online content, mobile, social and community interaction.
B2B publishers appear to be making the digital transition more quickly - typically only half their revenue now derives from print, with web subscriptions and ad revenues plus events important contributors, although mobile has so far failed to deliver on revenues. Consumer publishers still generate two thirds of their revenue from print, and are making greater progress on mobile revenues, with web ads and subs also growing. But, interestingly, print revenues haven't declined quite as quickly as predicted: in 2012, publishers were perhaps unduly pessimistic about the prospects for print, or maybe overly optimistic about the growth potential of web and mobile.
I've selected seven surprising facts from the 2013 research. We also asked publishers about their main opportunities and challenges which revealed some interesting trends.
Seven surprising facts…
1. Mobile apps have passed the tipping point
Consumer publishers were first to embrace the tablet and mobile revolution: 74% already have at least one mobile app, and 83% expect to be publishing on mobile by 2015. Business publishers are now catching up; although only 58% have at least one mobile app now; within two years, this is likely to rise to 72%. So now the focus has gone from experimentation to rolling out full portfolios on mobile.
2. The future is multi platform
Whilst iPhone and iPad still dominate, Android is definitely catching up, with Google Play and Kindle Fire on the road map for most publishers. Kindle Fire is more consumer-oriented, with 48% of consumer publishers on it already compared to just 21% of B2B publishers.
And e-readers also have a B2C bias: 31% of consumer publishers are on Kindle already and a further 43% plan to; while just 9% of business publishers are on Kindle now and 26% plan to. Newer e-readers Nook and Kobo are even more biased towards consumer publishers.
3. PDF replicas are so last year
Whilst most current mobile publications are simple PDF replicas, publishers' future plans centre around greater interaction and even mobile-only magazines. There's strong interest in repackaging content into specials and compilations: 27% of publishers are doing this already and an additional 40% plan to. And many are planning mobile-only magazines, unconstrained by print layouts.
4. Pricing on mobile firming up
Only a year ago, publishers were bundling digital editions free for print subscribers, and discounting digital-only magazines substantially. The good news is that pricing is hardening, with 60% of B2B magazines and 35% of consumer magazines charging the same for digital as for print, and those who are still discounting are offering smaller reductions for digital mags.
5. Online events growing fast for B2B
B2B publishers, who have long found live events lucrative, are actively experimenting with online events. 32% already run free to attend webinars, with 30% planning to launch. Paid-for webinars are rarer; only 8% run them now, but 38% are looking to launch. Full-blown online events are less common than one-off webinars, with just 17% of B2B publishers running them currently, but over 30% have them in the plan. And distance learning is also on the agenda; just 13% of publishers offer this now, but another 11% have plans to launch
6. Premium online subs beat mobile for B2B
Almost half (43%) of business publishers already charge for online content, with a further 30% planning to charge in the next two years. This contrasts with only 16% of consumer publishers who charge now, with 29% having this on the road map. And business publishers command higher online subs rates – 86% charge over £100pa, while consumer publishers mostly charge £20-50pa, comparable to a print subscription. So far, mobile hasn't delivered significant revenues for B2B, and online subs are expected to deliver more revenue growth.
7. Social media now making a measurable contribution
For consumer publishers, social media drives, on average, 17% of web traffic, with 14% of publishers claiming over 30% of traffic comes from social sources. B2B publishers lag slightly, averaging just 11% of traffic from social media, with only 6% exceeding 30% of traffic.
Social media works well with live events, as it connects the community, with real time updates. Both consumer and B2B publishers attribute some of their event ticket sales to social media - but only 11% for B2B and 13% for consumer.
And it's still early days on using social media to sell print or digital subscriptions. Both consumer and business publishers feel it does contribute, but is hard to measure.
The opportunities and challenges in specialist media
The Specialist Media Insights research also asked publishers about their biggest opportunities and challenges. Whilst most can glimpse the potential of digital platforms, online interaction, repackaging content and enhanced ad propositions, there is still a fear of new competitors, making the wrong technology choices, and traditional revenues evaporating before digital grows to replace them. Plus firms face a real skills gap especially in sales and technology.
* Digital publishing fuels global ambition
The lower launch cost and ease of marketing for digital services and mobile apps is broadening the geographical scope of even smaller publishers…
"Technology makes it easier to reach a wider audience"
"Marketing our digital and app versions worldwide"
"The world is our target market - location is not an issue"
* Greater engagement with customers through online communities
The immediacy of online communication is enabling a closer relationship with subscribers and readers…
"Closer engagement with consumers offering our content through different platforms, print or digital"
"Crowd sourcing content"
"Interactivity with subscribers"
* Enhanced ad propositions with digital, data, lists, communities
Creating high-value, bespoke commercial packages across multiple media is seen as an opportunity to grow revenues…
"Client solutions packages using multi-platform selling, increase database, list building"
"Getting potential advertisers to realise the advantages of distribution through social media & offering bespoke sponsorship opportunities"
"Combining digital audience with print for an enhanced ad sales offering"
"More bespoke work with clients"
* Social media and free content to grow brand
Publishers are learning how to use free content and social sharing to find new customers and up-sell to paid services…
"Ownership of strategic search terms through SEO excellence and weight of site"
"Using social media to cross-promote subscription news services to new potential customers"
"Harnessing social media for active sales"
* Repackaging content & data for multiple digital services
Content can be repackaged across different formats as both one-off sales and subscriptions – and data is as valuable as traditional content…
"Producing more digital books on the back of our magazines"
"Repackaging content as reports - focus on quality features"
"One-off PDF article sales"
"Much more monetised content online, growth in online traffic leading to increased ad revenues, sponsored forums etc, growth in digital paid-for subs"
"Visualisation of information, semantic web & natural language processing"
"Developing data and software services for niche automotive market"
But amid all this potential upside, there are still major challenges.
* Keeping up with technology & making right decisions
Publishers are struggling to keep abreast of tech developments, and feel that their people, hardware and software aren’t able to take full advantage. And there is a real fear of making the wrong strategic decision…
"Too many different formats and technologies. We do not have the resources to produce digital output to cover them all. It would be easy to spend a lot of money on developing and enhancing digital products but can you generate the extra income to recover these costs? What features will readers find valuable, not just an interesting gimmick?"
"Lack of technical knowledge to bring on board apps, web apps etc"
"Lack of good technical digital resources / people"
* Decline in print revenues and high investment in digital
Publishers feel cornered by declining revenues and rising costs in print while big investments are required in digital…
"Print revenue declines too rapidly before online revenue takes over"
"Applying resources so online can be developed without harming print: still our main source of revenue"
"Resource and set-up is high for minimal immediate returns"
* Advertisers having more alternatives and revenue pressure
Traditional advertising revenues are pressured as clients put more emphasis on their own content and social marketing, and publishers must evade expectations of low rates on digital. Sales teams also lack the necessary skills…
"Complete collapse of traditional advertising and sponsorship"
"Low digital revenues, less advertising as vendors move to social media and other mechanisms to reach their customer. M&A reducing pool of readers and vendors."
"Further reduced marketing budgets and customer owned routes to market"
"The current sales team not being able to sell cross platform and cross market"
* Free content and low entry barriers for competitors
Formerly strong publications feel under siege from new competitors and alternative free sources of content…
"Free user generated news on social media"
"Too many other sources of freely available high quality content in our markets"
"Relatively low barriers to entry into the market, so many people feel they could launch against us"
"Free content eroding commercial viability of digital media"
"Low cost start-up digital opposition"
Overall, the research shows an industry ready to grasp the digital media opportunity, but with real concerns about choosing the right priorities and technology and building teams with the right skills, before the traditional revenues dry up. And a strong awareness of a growing number of competitors willing to accept low returns to gain a foothold.