We have all heard the questions – maybe we are even guilty of asking the questions ourselves: Are we of a digital-first mindset? Are we more traditional in our business approach? Is mobile really the future of our industry? What is the future of print?
I would submit that, while these questions are great discussion starters, we are really asking all the wrong questions. To survive well into the future, we need to look at it in a very simple way: We must be customer first. If we are customer first, all the other questions will go in directions where the customers reside.
For some customers, that will involve being print first. For others, that might be desktop first, and for others it may be mobile first. For others it may be Big Data first, and for others it will be e-commerce first. And yet others might demand events first or even membership club first.
You get the point: The news media business plan of the future must be whatever the customer demands, not what we decide it will be.
Companies that are placing their eggs in one, two, or even three baskets are on a one-way path to extinction. Even if you select a profitable and high-margin path, the numbers needed to support the high-quality journalism and content sorely needed to succeed won’t add up.
I would submit that the path forward isn’t one, two, or even three revenue paths. The path forward that will best assure success will consist of eight to 10 — or even more — revenue streams, some of which will require new expertise and the innovation culture we all must grasp.
What might some of those eight to 10 revenue streams be?
Those listed below are all currently in play, making many companies very good profits, and proving to be quite lucrative. I am sure we could add many more to the list in the near future.
- Traditional print: Yes, traditional print is still part of a long-range strategy. In fact, companies that are not keeping on the ball when it comes to print are amoung those most likely to ultimately fail.
Print will continue to decline, but riding the wave as long as possible adds more time to the clock, allowing companies to build new revenue streams moving forward.
- Digital and mobile: This is certainly one of the future components of a successful news media business model. However, to rely on this to save the day for our robust business model is fraught with extreme peril.
The price of entry for competitors in this arena will always be low. This creates extreme competition for a digital product that proves successful, which usually serves to drive down prices and turn it into a simple commodity.
- Big (little) Data: Data isn’t only a large market play. News media companies are in a unique situation where the collection and utilisation of data only makes sense. Data requires investment in resources to truly harness the vast expanse of this revenue stream, but the rewards on both the audience and business-to-business side are massive.
- E-commerce: This area (as well as the next several listed) is a space where leveraging one’s brand provides nearly instant and great reward.
News media companies have left this multi-billion dollar vertical to a few national players such as Amazon and other similar online merchants. What better way to monetise one’s brand than through a local e-commerce push from a local trusted brand or shop — a local Amazon, if you will.
- Events: This is a great way for news media companies to leverage and even grow their brands in their respective communities. In the past, companies have been quick to sponsor events, but they have rarely created the events.
Those days need to end. From marathons, concerts, expos, sports banquets, business events, red carpet previews, and more, the opportunities are practically endless.
- Membership/loyalty: We are learning that our customers seek added value. That should come as no surprise as we have spent centuries telling our advertisers they need to present great deals to drive traffic through their advertising.
Our customer base is no different. Build value, offer outside the core benefits, and give your base a bigger reason to stay with you.
- Equity ownership swaps: What better way to grow one’s portfolio than with equity stakes in start-ups and other local businesses? While not mainstream in our country yet, one need look no further than The Times of India and its US$1 billion+ portfolio of equity in non-core businesses.
- Niche magazines (print and/or digital formats): Yes, doubling down on certain segments of print still make sense. Margins are known to be near 50% in many cases with no end in sight. Why not ride the wave before it breaks?
- Direct mail: Many of our markets either have or fear the entry of shared-mail products. Instead of fear, we should utilise our brands and enter the fray. As is evidenced by our competition, there is money to be made if we strap on our helmets and go to battle protecting our turf.
For too long our industry has had a stranglehold on our markets. I fear many have spent their careers in the driver’s seat and, when attacked, only know how to play defense.
Whether it is any of the above revenue streams or the many others not mentioned here, the time has come to put our defensive posture aside and take our companies into an offensive frame of mind.
We no longer can wait, playing a lazy defense hoping for the good ol’ days. As an industry we need to flex our muscles once again, taking the offense and seizing the day.
Time is of the essence and those who wait defensively will lose — as they should. Those who are bold and taking the offense will find a way forward despite the opposition. They will live to fight many more profitable days.