New business model for media is found in loyalty through non-traditional offers

By Dr. Dietmar Schantin

Institute for Media Strategies

London, United Kingdom


With news organisations closing at an alarming rate and newsrooms facing significant reductions, it is no secret business models have been decimated by digital disruption. At the same time, there is a lot of experimentation and some notable successes in finding replacements in the connected world.

But even if we agree the traditional business models are broken, we continue to think of news media in terms of their traditional values: journalism and content. Historically, a news brand is closely linked to the product, and that brand primarily stands for the outlet’s journalism or content.

The business models are still based on this today: the sale of journalistic content in combination with paid advertising content.

To increase the average revenue per user and grow with existing customers, media companies must get them to subscribe or buy additional products or services.
To increase the average revenue per user and grow with existing customers, media companies must get them to subscribe or buy additional products or services.

Things are different in the digital world

Growth rates are slow and flatten out faster. The churn rate — the unsubscribe rate for digital subscriptions — is signficantly more than 50% on average in many markets. This means much more attention is needed to maintain current subscriptions and find replacements when subscribers walk away. It is becoming increasingly difficult to reach potential customers who are willing to pay money for a content-centric product.

The consequence is that media houses have now expanded to include other products and services in addition to the content, some of which are non-traditional for news media but offer a logical extension of the brand.

It is important to increase the ARPU (average revenue per user) and grow with existing customers by getting them to subscribe or buy additional products or services and build their loyalty. New packages can be built that no longer consist exclusively of content and journalism, but start with your own brand and include offers that people consider “vital” or at least very desirable.

These offers often include events, conferences, trips, seminars, e-commerce offers, games, recipes, marketing services, and other products. Short-term sales are less important than medium- to long-term customer loyalty. Some media companies, particularly in Europe, have packaged these products in membership offers, which tie the customer tightly to the company by offering a variety of exclusive products and services that go well beyond journalism.

Purists might argue such offers dilute the mission of news media

 However, they can, in fact, enhance the journalism if they are high quality and the offer is related.

For example, many news consumers would enjoy the opportunity — and likely pay — to attend an exclusive evening fireside talk and discuss relevant issues with a distinguished expert, moderated by knowledgeable journalists.

The success of these new offerings is decidedly mixed. Though many companies are developing these initiatives, the revenue produced overall is modest, likely because it takes time to succeed. Early adopters are finding revenue growth.

Without a doubt, seeking these new sources of revenue takes an investment in time and resources, and is perhaps a complicated endeavor. Companies often don’t have the know-how for these kind of activities, and sales staff are already managing a variety of new advertising products.

The material benefit is only a small part of what is important for brand loyalty 

The far more important part is the emotional bond achieved through shared values, worldviews, goals, and attitudes. Topics such as sustainability, family, health, physical and financial security, or work life always are central to the concerns of most readers and users. Just writing about these topics and standing on the sidelines as a chronicler is no longer enough. Brands can serve customers with a wide variety of offers without degenerating into a mad scramble for cash.

It is helpful to examine what news media companies are doing in these areas and tailor them for your local markets. When you look at those at the forefront of these activities, it becomes very clear they are better positioned for the present and the future than those who stick with traditional offerings.

About Dr. Dietmar Schantin

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