As the current year draws to a close with continuing unpredictability, today’s news media companies are faced with difficult choices. What will 2021 bring, and what can publishers do to prepare?
On Tuesday, Ashish Pherwani of EY India shared insights into this question with INMA members in a live Webinar. As the media and entertainment leader of EY India, Pherwani opened his presentation by asking what print needs to change in 2021.
“To answer that, I’ll do as I always do — hide behind numbers,” Pherwani said. “Don’t beat me up if you don’t like the numbers.”
His first prediction is that the COVID-19 headwinds will last in the coming year. He shared media revenue data from the previous two years, 2020, and projections for 2021.
- 2018: Approximately US$4 billion in revenue, with about 72% of that from advertising and the rest from subscriptions.
- 2019: Very close to the same numbers.
- 2020: Just under US$3 billion in revenue, with about 70% of that from advertising and the rest from subscriptions. This represents a 34% loss in revenue.
- 2021: Predicting a climb in revenue up to about US$3.2 billion in revenue, with some 70% of that from advertising and 30% from subscriptions — 19% less than 2018/19 numbers.
“That’s my estimate,” Pherwani said. “I might be way off, I hope I am.”
Regardless, 2021 is going to be an important year for news media publishers.
“I believe this year — 2021 — the main thing is going to be about the print product market fit,” Pherwani said. “A product-market fit is when a product actually meets a segmented audience, and you have a capacity of actually delivering that product.”
Without such an alignment, much effort and money will be wasted and the product won’t sell.
For the last 100 years, the print newspaper product and industry has been relatively stable and world-class, even with the advent of new things such as digital and video. However, it is shifting rapidly now.
“I feel 2021 is going to have a lot of changes in the product side and the market side, and that’s going to lead to a lot of changes in the fit side, which is really organisational capabilities,” he said.
Pherwani added that he’s seeing a lot of innovations happening right now on the product side, from digital and audio news to TV appointment viewing and community news — many of which launched during the COVID pandemic.
“The amount of product that is in the market is diversely changing, and will continue to evolve in 2021, pretty significantly.”
On the market side, there were also many changes in 2020:
- More openness to digital platforms.
- More interactivity.
- Demand for credible news.
- Demand for customisation.
- Advertisers want targeted ads.
The product-market fit will need to be realigned in 2021 in a bigger way than it ever has before, Pherwani concluded.
Four key areas for 2021
Next, Pherwani shared what he believes are the four most important areas for publishers to focus on in the coming year.
Product: Needs to be both beautiful and useful. Utility of print newspapers has gone down, and needs to be increased to give the reader a compelling reason to buy it and read it.
Revenue: Combat abundance of content, including largely free digital content, with credibility. Publishers can focus on circulation (new markets and recovering lost subscribers), cover price must cover cost, and ad sales transformation.
Cost: “Co-ompetition” rather than competition, collaboration on things such as stringer networks, news gathering, production, and support functions. Automation also presents an opportunity, from consumer side and content to advertising and subscription.
Digital: With only one regional news company (Times Internet) in the top 10 Web sites for highest unique viewers, the competition isn’t really other news media, but the top sites such as Facebook, Google, and Amazon.
Publishers can no longer simply put a newspaper in front of consumers and know that it will be picked up and read. There are too many new products on the market now competing for audience attention, he said: “You need to increase the reason for the consumer to actually pick up the newspaper.”
Pherwani continued by sharing four things that he believes are key to making digital work:
- Ad sales solutions by category.
- Many multi-communities, which equal brand extensions.
- Print and digital bundling.
- Focus on other content areas besides news.
“Data is God, and in God we trust,” Pherwani said. “If you’re fighting advertising service providers like the Big Tech companies with so much data, you better start getting your own data. You need audience data, otherwise it’s going to get more and more difficult to generate a premium.”
He posed the question: How do you build a digital business in a print organisation?
The key is to have an innovation zone that is kept separate from the core, print business zone.
“If you really want to innovate, you’ve got to keep that innovation separate,” Pherwani said. “You develop a portfolio of new talent, new ideas, new capabilities, new assets, new products over there — and use them to scale new business, which are different from the original, and defend core business.”