FEATURE 

Is this the last chapter for paper?

Digital technologies are resulting in more content, more channels and more ways to consume media than ever before. What does this mean for publishers? To find out, Deloitte and the UK Association of Online Publishers spoke to over thirty key digital decision makers across the publishing industry, from media organisations with turnovers ranging from £30m to £1bn. Here, Deloitte’s Jane Price-Stephens and Stephanie Wood discuss the winners and laggards in the digital world, and present five key principles of success for digital publishers.

By Jane Price-Stephens

As publishers have continued to experience flat or falling circulation of their printed products, the importance of digital publishing has increasingly been questioned: will digital products augment or cannibalise print revenues?

Contrary to popular belief, our survey found cannibalisation of print revenues by digital to be a myth. We found that the majority of interviewees could not cite a case of digital products destroying revenue, and none of the participants equated digital success with the demise of the printed product.

Instead, it was found that print is alive and well, with digital offerings complementing rather than competing with print products. Overall, print is still regarded as an efficient and valued means of consumption. Book, magazine and newspaper lovers may always prefer the feel and portability of paper, even if they supplement some of their consumption online, or have chosen and bought the book online.

There are several cases where print products have been bolstered by an online presence and opportunities, leading to the rejuvenation of brands and allowing content to reach new audiences. As an example, newspaper publishers, such as the Guardian, are now starting to post major international and business news stories online before they appear in print, aiming to broaden and deepen online coverage for a targeted readership.

Digital winners vs laggards

Digital winners are those with established digital brands and products. Our survey respondents most admired the BBC’s initiatives within the digital space, with three or four further digital businesses emerging as the most admired within the digital publishing world (see figure 1).

Whilst all these organisations have come from different starting points, they share common characteristics that have made them successful as digital businesses, and admired by their peers. Firstly, the businesses have been active in the digital marketplace for more than five years. Secondly, they have board-level support that permeates the organisation, with demonstrable executive leadership backed by a commitment of resources and structure. In addition to these qualities, the survey identified a number of additional characteristics which drive digital success (see figure 2).

On analysing the performance of the sub-sectors within the publishing industry, it became clear that the outright digital winner at the moment is the business publishing market. This sector boasts the most coherent and fully developed digital strategies, which tend to leverage their brands to take advantage of new revenue opportunities in the digital space. Business publishing fits naturally with the digital world – these companies have built their print businesses on serving communities. Digital technology now allows these communities to share information, communicate and access must-have content under the umbrella of a trusted brand or title.

The most viable and successful online consumer magazine titles are those that follow the business publishing model of serving niche audiences or particular demographics. This model creates the most effective defence against potential competitors – raising the barriers to entry – while simultaneously pushing up digital revenue, be this through increased traffic, sales of third party goods and services or pay-as-you-go premium content.

We believe the gap between those that are successful in the digital world, ‘the winners’, and those that are not, ‘the digital laggards’, comes down to two factors. Firstly, the degree to which the strategy is clearly articulated, and secondly, the degree to which they are understood and endorsed by boards. Of the companies surveyed, some had yet to develop a digital strategy – although they recognised that they should. Around a quarter had business models which fully integrated their digital and print business. Most businesses sit comfortably in the middle, constrained by legacy practices, culture or digital maturity.

Five principles for success in the digital world

When seeking success in the digital world, there is no winning off-the-shelf solution that publishers can implement. Instead, the Deloitte / AOP survey revealed five key principles for publishers to adhere to as they pursue initiatives in the digital world.

1. Make it simple
Develop and clearly articulate a simple overarching strategy that sets out how your offline, online and mobile offerings interplay. Ensure it delivers incremental value to your customers.

The digital world is developing rapidly, and in such an evolving environment a simple digital strategy is important to provide direction but also enable flexibility. The digital publishers most likely to succeed will be those that can clearly articulate to their customers how each of the various print, online and mobile channels provide different perspectives on the same theme. As an example, a popular topic in most newspapers is football. The multimedia portfolio for football content could include: newspapers providing in-depth post-match reports, online websites providing video match highlights or historic statistics, and mobile providing live match scores or breaking transfer news.

2. Know your customer
Get to know your customers and grow with them. Don’t ignore the young – they are your future.

From a publishing perspective, technology is not driving digital transformation, customers are. Customers are soaking up new digital experiences. They are blogging, downloading, podcasting and watching mobisodes. Successful businesses will be those who support these trends by developing products and offerings that embrace the changing behaviours of their audience. Several new publishers are now using podcasting and content-to-PDAs with both audience and advertising success. These businesses are using technology to enable and support the experiences that customers are increasingly demanding.

Young people are some of the earliest adopters of new technology, and the downloading youth today will be tomorrow’s mass market for media consumption. Keeping abreast of the trends in the way young people consume media and adopt technology will be crucial to building successful digital publishing brands with longevity.

3. Profit from personalisation
Personalise to provide what customers want at the right price and they will come. Don’t be afraid of breaking your traditional one-to-many publishing model.

Content is personalised when a publisher knows the customer, understands their preferences and previous behaviour, and provides them with content that they have either requested or that they believe they will like. Compelling personalised offerings could be sports results tailored to your favourite team, or local news from where you live. Consumers will be more willing to pay for personalised content, especially when they are packaged well and are easy to find and buy online.

The data analytics behind such personalisation are becoming increasingly important. Companies are collecting more information about their consumers, and often purchasing third party data in order to target new consumers with customised offerings.

4. Embrace user-generated content
Harness the power of user-generated content, encouraging its inclusion to enhance and support your brand.

The recent explosion of user-generated content poses an editorial challenge, as this content competes directly with existing published offerings. Publishers will not be able to stem the flow, so smart companies are finding new ways to work with it. Publishers must welcome user-generated content and leverage its potential – both as a source of closer customer contact and as a marketing tool. Citizen journalism via photo contribution has been encouraged by publishers including the Telegraph, whose ‘snap and send’ initiative increased reader participation.

User-generated content can also mean user-participation. Leading digital publishers, in both consumer and business sectors, have experimented successfully with allowing readers to participate and be part of the digitally-published content through forums, podcasts, webinars and blogs. By allowing customers to ‘have their say’ and participate with the editors and experts, publishers have created new revenue opportunities and brought audiences closer to their products. Such companies include Guardian Newspapers, which has launched its ‘comment is free’ blog project via the Guardian Unlimited website. It is being increasingly recognised that blogs can be an effective marketing tool to drive traffic to online content, acting as unpaid syndicators as they comment on and link to content.

5. Build your brand
Look beyond the printed word and focus on the brand as the centrepiece for generating revenue.

Publishers should no longer think of themselves as just content publishers. Rather they must see their content as a means of supporting revenue-generating brands.

For instance, readers of a magazine can be directed to the publication’s website, where they can pay to hear the writer talk about a subject, or watch a video that complements information in the magazine. Readers’ offers – the ‘page fillers’ in the back pages of many newspapers - take on a whole new life when introduced in a digital environment, be that multimedia products such as music downloads or financial services products for which you can apply online. These are real examples of publishers taking trusted brands and leveraging them to generate alternative revenue streams.

Conclusion

Digital provides a unique opportunity for both consumer and business publishers to form the commercial backbone of the communities they serve. The digital world will offer opportunities to launch businesses that may not even have a print background, enabling publishers to find new business models and deliver content in the way readers demand. Publishing’s digital chapter is now just being written and there are early winners. It is not clear which laggards will become victors and which may fail, unable to reconcile their history with today’s nascent business models. Yet we are certain, for both consumers and publishers the net benefit is positive.