For too long, most news providers have laboured under the illusion that advertising would pay the bills in the digital era. It won’t. Yes, digital advertising revenues have grown massively, but as we now know, Facebook and Google are taking it all. This duopoly is basically eating your lunch, and by providing them with your great content, you’re giving it to them on a plate. You’ve been suckered into becoming little more than white label content providers.
There is an essential truth which news publishers have lost sight of: money is made where the article is viewed. You need to turn the tables, so that your content is viewed on your site with proper payment being made – which needn’t necessarily be monetary; it could be in the form of registration data.
The transition to reader-funded models is a journey and a state of mind. It needn’t involve binary choices. 3% of your unique visitors will auto-convert and you need to devise a strategy for the rest, which will inevitably involve some sort of wall. The strategy might include: an allocation of free articles, a datawall to capture registrations and a paywall; the publisher’s task is to then move people through the sales funnel. All classic marketing stuff. This route of course still allows for considerable opportunities to sell advertising, and by moving to verifiable eyeballs, as opposed to anonymous ones, those opportunities might even be enhanced. The process of feeding the tunnel never ends, a bit like painting the Forth Bridge, but a likely equilibrium point is where 40% of news publisher revenues come from readers.
It is, however, not all about erecting paywalls and registration barriers. Two more fundamental things need to happen simultaneously. The first of these is, you need to rebuild trust. A survey found that trust in mainstream media in the UK stood at 40%. For a newspaper sector that boasts a code of conduct, highly trained journalists and does everything possible to project itself as the antithesis of ‘fake news’, this is a shocking figure. Trust in your output has been severely eroded by, firstly, the volume-chase which has led to a diminution of quality: recycled news, cheap uninformed opinion, charlatanism, desk-bound analysis at the expense of real reporting, clickbait, and too many mistakes being made in the rush to be first, as opposed to being right. Secondly, the highly-partisan, agenda-driven, one-sided reporting of significant parts of the national press on major issues of the day means that there is little to distinguish much of their output from what’s being pumped out on social media.
Worth paying for?
The second fundamental thing you need to sort out is … quality. Put simply, is your content worth paying for? Ultimately, people will only pay if what you’re offering is distinctive enough. If it’s no different or better than what free-to-access-competitors are serving up, then no one will pay. News publishers need to create “premium scarcity”, to focus on depth, rather than breadth. Offer unique content, brilliant writers, agenda-setting exclusives, a distinctive yet trusted voice, great UI/UX, frictionless payment, and… er … don’t ever publish stuff that doesn’t measure up. Just… be great! This is achievable but you’ve got to have a vision and be rigorous in maintaining standards.
The good news is that you will not be alone on this journey. Even the Guardian with its begging bowl, is chasing reader revenues; no sign of any walls going up yet, but who knows what direction they will take in future. In the US, it’s anticipated that 300 newspapers will be charging readers for access by the end of 2018; up from zero a few years back. The old saw that people will not pay for digital content no longer holds true. People are increasingly prepared to pay subscriptions to digital services they value (like Spotify and Netflix) and in the States, the “Trump bump” has seen record numbers of new subscriptions at the New York Times and Washington Post, demonstrating people’s hunger for trusted news sources. Indeed, the “fake news” furore might yet turn out to be a blessing in disguise for news media, as it gives them the chance to reposition their offering.
Publishers are losing money and losing trust. They need to start the journey to a reader-funded future, setting up the correct barriers and messaging, rebuilding trust and investing in the uniqueness of their product. This all needs to be melded into a new content-led strategy. Today’s a good time to start.
Juan Señor is a partner at Innovation Media Consulting and Nic Newman is a visiting fellow at Reuters Institute for the Study of Journalism.
An abridged version of this article appeared in the 9 November edition of InPubWeekly.