We are only two weeks into the new year, and the news industry is abuzz with colliding priorities.
Gone are the days of macro-economic winds blowing advertising this way and that way. Gone is the newness of digital subscriber acquisition. Gone is journalism disconnected from the business of news.
My ear hears three big themes:
- What to do next with a subscription-first business model: Bundle? Discount? Augment?
- The acceleration of print declines and the ramping up a total digital business model.
- Preparing for a big news year, with so much on the line for media’s bottom line.
Lurking in the shadows of these themes is where GenAI will help or hurt.
Let’s break these down into digestible parts.
The next steps of a subscription-first business model
How do subscription-mature publishers build on the foundations they have created? Beyond bundling and discounts, to what degree should we rebalance some semblance of advertising and commerce into a subscription-first business model?
The INMA Media Subscriptions in New York in February will dive deep into this subject, but here’s the way I’m hearing this stretched across three to five years:
Phase 1: Build subscription engine for premium readers.
Rally your entire company around subscriptions, prioritise high-ARPU low-hanging fruit, ready the whole organisation for acquisition and retention.
Create the engine.
Phase 2: Extend subscription engine.
Once you’ve mastered subscriptions, what most mature media companies run into are the end of “easy money” days. Should you try to prop up ARPU by bundling assets into a more valuable subscription package? Should you reach back to the old print days with deep introductory discounting layered on with a masterful retention engine?
At this stage of the game, you’re still thinking subscriptions-only.
Phase 3: Augment subscriptions with advertising.
If you’ve cycled through high-ARPU subscription ideation and exhausted second phase tactics, step back and have a serious conversation about the value of content and the value of readers. How do you integrate advertising and commerce into your subscription-first business model? How do you segment paid and free audiences and create advertising-focused products? The readers remaining in your market to engage and convert may be closer to US$5 to US$10 ARPU than US$20 ARPU, but to what degree can advertising bridge that gap?
According to feedback from INMA’s CEO Roundtable in Vail last year, don’t try the re-balance until you’ve done all you can to maximize high-ARPU subscriptions in your market.
Print declines and the ramp-up of digital-only
Publishers are seeing an acceleration of print circulation declines, which is shaking the wobbly economics of print.
To boot, they are surprised by the declines. It reminds me of the passing of someone ill for many years. Were you surprised by their passing even though you knew it was coming? No, but you’re never prepared for the end.
In late 2022, INMA held a Europe Division Board meeting in Copenhagen. Staring at a winter of war and newsprint supply chain issues, most of the board members admitted they had plans for reducing print frequency — a reality that thankfully didn’t happen. But they equally confessed their companies weren’t economically or culturally ready to be digital-only.
I will cast stones on the day I realise I’m perfect. Yet I sat there in Copenhagen and wondered, “If Europe represents the most digitally transformed media markets in the world … and they aren’t ready for this … what about the rest of us?”
I’m hearing media companies are reallocating monies to reduce print costs and ramp up what they believe is the end game for digital-only or at least digital-dominant. Imagine a bridge 75% complete, yet the boss says it needs to be 100% complete tomorrow. There’s only so much acceleration that can be done, yet print-to-digital transformation — for these reasons — is already back on the minds of c-suites.
Am I surprised we’re talking about print-to-digital transformation in January 2024? Yes for markets that I thought were digitally advanced.
Are you ready for a busy news cycle?
Is your business model ready to ingest the busiest news cycle since the pandemic? We have elections and wars and sporting events — and recent history shows what this can mean.
It reminds me of a preacher asking me if I’m ready for heaven. Yes, I say. Are you sure, he asks. Well, I didn’t know it was going to be this level of questioning.
Media professionals, are you sure your company is ready to acquire subscribers (and retain them) with 60 elections worldwide, two wars, and the Paris Olympics in 2024? Newsroom? Customer service? User experience? Marketing? Are you prepared to retain that surge when the heat burns off in a few months?
If Greg Piechota has taught us anything as lead of our Readers First Initiative the past five years, the entirety of your company needs to be aligned and ready for this moment. It happened with the pandemic. It happened with Trump.
I interviewed INMA President Maribel Perez Wadsworth last week about expectations for 2024, and she toned down the business optimism surrounding these events. The year could be a two-edged sword.
“On the one hand, you expect that these moments generate tremendous demand for news, and it is important that our industry by poised to capitalise on that, to be sure that they are positioned … to meet the needs of their readers and viewers and listeners,” Wadsworth told me in the Webinar.
Yet here comes GenAI and “landmines” that can rapidly spread misinformation and make it more difficult for news brands to accurately report. Said Wadsworth: “Just the spread of deep fakes alone poses tremendous threats to our abilities to do our jobs well. And in a world where we are already struggling with trust, potentially seeing that come under even greater assault.”
These are the “on the ground” subjects I’m hearing from the INMA network as we start the year. I can’t wait to talk more about journalism, impact and influence, trust, and newsroom transformation. I can’t wait to see how GenAI plays out.
I want to speak with you directly at our February Subscriptions Summit in New York and our April World Congress in London. Don’t just have your teams attend the sessions. Make sure we connect directly.
Let’s go smash 2024.