Fueled by digital disruption, news consumption has become more social, more promiscuous, more topic-driven, and less masthead-driven, as readers discover and engage with content in multiple forms through a myriad of distribution channels.

Competition for eyeballs is fierce for both news and advertising. Which begs the question: How can publishers grow global audiences and revenues in such a complex and competitive world?

Digital news consumption trends in the United States

According to Reuters, readers in the United Kingdom and some other European countries still tend to discover content through trusted brands. But it is a different story in the United States where searching is the main gateway to news.

Interest in digital news is growing in the United States. The number of people engaging with digital newspaper content has grown by 19% in one year since January 2014 to 173 million.

So, the U.S. market is gaining interest in quality content which is great, but how can American publishers capitalise on this trend to maximise engagement and revenues?

Here’s a look a little deeper into U.S. news reader behaviour.

Cross-platform content consumption and sharing is a way of life for U.S. readers.

  • 35% get news on at least two devices.

  • 35% share news stories via e-mail or social media each week.

  • 17% access news mainly through mobile.

  • 10% say tablets are their main way of accessing news online.

However, the data also indicates that only 11% of U.S. readers actually paid-for news in 2014.

This presents a real dillemma to U.S. publishers. They have an audience that wants to read their news, but the majority don’t want to pay for it today. What about the future?

When looking at where publishers could potentially receive payment, one might instinctively think that older, more traditional readers would value the content enough to pay for it since they’ve been paying for printed media for years. But, in fact, it is the Y generation (i.e. Millennials) that will be more open to paying for news moving forward.

Research shows Millennials spend 30% of their media time (more than five hours a day) with content created and shared by peers and trusted sources they follow on social networks. These digital natives are also forecasted to spend US$62 billion on media content in North America this year.

These readers expect instant, seamless access to content curated by other readers (not editors). So the moment a publisher raises a requirement to register or worse, a paywall, in front of that content, is the moment the publisher loses profit potential.

This less conventional news consumption behaviour presents yet another challenge for U.S. publishers. How can they serve both traditional readers, who favour the printed replica format today but are unlikely to pay for news in the future, and the likely-willing-to-pay-in-the-future digital natives who prefer a more contemporary presentation that offers “frictionless discovery of content curated by the crowd?”

It’s really quite simple; give readers what they want – quality content they can read, engage with, and share with others:

  • Wherever they are.

  • In whatever format they choose (online, via apps, or in print).

  • In the presentation style they prefer (enhanced replica and non-replica).

  • On whatever device they carry.

  • Online or off.

  • For the right price.

Many established and new entries into the digital publishing world are attempting to satisfy these readers through various presentation formats, distribution solutions, and pricing models. Their goals may be the same, but their service offerings and abilities to satisfy the needs of both consumers and publishers couldn’t be more diverse.

Making sense of the confusing digital publishing landscape

At last count, there were more than 80 companies in the digital newspaper and magazine distribution and publishing industry. It’s become a very crowded and confusing landscape because it’s so easy for start-ups to adopt Digital Publishing Suite (DPS) technology and start promoting themselves as the new Netflix/Spotify/iTunes for news.

But are they really giving publishers what they need, which is to:

  • Grow audience.

  • Grow revenues.

  • Grow audited circulation.

  • Protect their content.

  • Engage with readers.

  • Know their readers.

  • Attract advertisers.

  • Reduce costs.

Offering publishers multiple distribution options to reach more readers is great. But publishers must be careful to weigh the pros and cons of each offering against what they truly need and consider the combined effect of all these factors on their current business and their future.

Business viability

There is some big money being invested in little start-ups in digital publishing these days, but the future sustainability of many of these small businesses is still in question. It isn’t the first time publishers have invested in “alternative” publishing solutions one year, only to disband them the next.

A publisher’s content is its most valuable asset. Risking it on unproven solutions can be dangerous. Established, proven, and trusted partners are a much safer bet when the stakes of high. And in today’s highly competitive publishing landscape, the stakes have never been higher.

Content presentation, engagement

Presentation of content may not be a deal breaker when it comes to online classifieds, but when it comes to attracting and retaining newspaper and magazine reading audiences, it is critical. Publishers need to pay close attention to how service providers are presenting their content to ensure that it:

  • Serves the needs of both traditional replica readers and today’s new generation of news consumers.

  • Offers frictionless discovery of content curated by the crowd.

  • Supports digital features designed to engage readers’ interest longer (e.g. search, sharing, translation, text to speech, personalization, commenting, bookmarking, etc.).

  • Allows for the integration of multi-media and interactivity into editorial and advertising.

Content processing

It’s fairly easy to manually process a monthly magazine, which is another reason so many new players have entered the market. They can pay pennies for offshore contractors to process magazines. But for full-content newspapers and supplements, the barriers to entry are just too high.

So before jumping into a relationship with a new channel, publishers need to evaluate the scalability, reliability, and quality of the content processing systems in place.  Can the solution handle the complexities of processing their daily publications 24/7/365?

Audience reach

Every digital newsstand promises publishers a global distribution solution simply because the service is online. But the Internet is a highly competitive universe where content is like a needle in a haystack – difficult to discover (especially if it’s a flat PDF-like replica) unless the searcher is specifically “brand hunting.”

Publishers already own brand loyalists in their local markets. What they need is a distributor that brings their content to a massive paying audience they can’t easily reach on their own.

The questions publishers need to ask are:

  • How many people will my content actually reach on a daily basis?

  • What specific consumer-centric channels does the distributor own that have captive audiences willing to pay for my content (or have others pay on their behalf)?

Audience analytics

There is a lot of buzz in the industry these days about the importance of Big Data and how newspaper and magazine publishers should use it to maximise audience and revenue growth.

When choosing a distribution and publishing partner, make sure their data and audience analytics and reporting give you everything you need to truly “know” your audience, so you can give them what they want to maximise their engagement with your content.

Revenue models

In the 1990,s there were basically three ways to make money with news – subscriptions, single copy purchases, and advertising.

Today, new revenue models are popping up all over the publishing landscape. Here are a few that are making headlines these days that require further scrutiny.

  • Pay per issue: The moment the iPad hit the market in 2010 and fueled the mobile app revolution, digital newsstands started popping up everywhere with every publisher in the world scrambling to get its titles up front and center on readers’ tablets and smartphones.

    They provide a one-stop shop for readers willing to pay for news and offer some opportunities for publishers to count issues as audited circulation But newsstands are losing favour with many publishers because they don’t offer the level of discoverability, subscriber growth, and reader convenience publishers and consumers need.

  • Pay by time spent: There is a relatively new model being hyped that pays publishers based on reading habits of subscribers. The more time spent with a publisher’s content, the more money that publisher gets out of the “pot” collected from readers.

    The revenue pool so far is small with relatively few users, requiring the provider to pay publishers minimums to entice their participation. It will be interesting to see how long the pay-by-time model keeps vendors afloat before their time runs out.

  • Micro-payments: Recently, some new players and even some established publishers have embarked on a mission to cure what ails the industry through an iTunes-for-news paid content model.

    This model breaks the typical monetisation paradigms by unbundling publications and selling articles by the slice to subscribers. Price per piece, determined by the publisher, ranges between 20 cents to just over US$1. 

    This model not only arguably devalues a publisher’s content, it introduces a level of “friction” in the content discovery process because readers have to decide, with each and every article they want to read, whether it’s worth the money.

    On the surface the model sounds “interesting,” but isnt it leading publishers down the same path to pennies the music industry slid down nearly a decade ago? It didn’t work for music (streaming music is cannibalising song downloads), it didn’t work for video, and it especially won’t work for news where the shelf life of an article has much less value to consumers than the evergreen media (i.e. songs and movies) they consume multiple times.

  • People are no longer interested paying per tune or DVD; they are more interested in paying for a license to listen to any song or watch any movie on any device. The same is true for media, which bring us to …

  • Netflix for news: Today, the most user-friendly consumption model for music, video, and news is the all-access/one-subscription model.

    A number of new digital publishing houses now offer some form of “Netflix for news” to their magazine readers for a monthly fee. Newspapers aren’t included as they require complex processing these companies do not possess.

    Many offer just flat PDF-like replicas created using off-the-shelf digital publishing solutions and do not support frictionless discovery of content; they do little more than present images of a publisher’s content which can’t be searched, shared, or enhanced with digital features. The value to users, publishers, and advertisers is limited at best.

Audited circulation

The success of a publisher’s advertising revenues lies in its ability to recognise its content as audited circulation. Audit bureaus worldwide provide very strict guidelines to ensure publishers’ content is being “counted” properly.

The Alliance for Audited Media (AAM) pays close attention to how publishers are accounting for digital distribution. So when choosing a partner to distribute paid content to readers, U.S. publishers need to make sure the value of their content is recognised and properly counted, both from the commercial/publisher side and from that of the consumer.

Services that pay publishers “per issue read” count and are a publisher’s best choice when looking to maximise audited circulation. The more amorphous revenue sharing models (e.g. time spent or articles read) that do not “count” are questionable in terms of their value to a publisher and its advertisers.

Capitalising on disruption

Every industry in the world has either been disrupted, going through disruption now, or is about to be disrupted.

Video, music, software, hospitality, advertising, and even transportation industries are evolving in radical ways as a result of technological innovations, market dynamics, and consumer demands.

Publishing is no different. It’s been living in “interesting times” since Craigslist hit the Internet in the late 90s. And while some publishers attempt to weather the storm with flashy apps, diversification of product lines, and dubious distribution choices, others are taking a more pragmatic approach.

They are partnering with proven innovators that are working with every part of the publishing ecosystem and transforming it in a way that readers and publishers don’t feel they are losing out in terms of quality content, value for money, audited circulation, audience growth, and revenues.

Unlike the video and music industries that always sold products through third parties, the publishing industry has traditionally sold directly to consumers.

However, with todays multi-platform and multi-channel demands of news consumers, its not really feasible for most publishers to reach readers wherever they are on whatever devices they carry. The pressure to partner with third parties to develop new technology and manage distribution challenges has never been greater.

The music and video industries have suffered serious revenue setbacks after adopting business models that were not publisher-friendly. So what does that mean for mainstream media looking to capitalise on disruption with the right distribution and publishing partner?

Two words: partner wisely!