With so much buzz about combined revenue models in the media industry over the past year, we have to ask, why are executives always talking about media revenue diversification? Aren’t they doing it yet?
In this blog post, we’ll cover the challenges that are preventing some publishers from diversifying their revenue streams, and share a few examples of media companies that are implementing new revenue models successfully.
3 revenue-related challenges for publishers
In January 2021, the Reuters Institute for the Study of Journalism (RISJ) released a report on publishing industry trends and the impact that the Covid-19 pandemic has had on the media landscape. One particularly prominent trend the RISJ report highlighted was the conversation around paid versus free content during the public health crisis.
“What became clear…is that the publications with a subscription or a membership model fared generally better than those who gave their [Covid-19 coverage] out for free,” the report said.
Despite this promising nod to subscription models, media revenue diversification is no simple feat to achieve. Let’s explore 3 common challenges facing publishers today as they restructure their revenue mixes.
Insufficient technology to support new revenue streams
Software is outdated in 70% of workplaces, according to a survey by PCMag. If your media organization is struggling with clunky technology, now is the time to seriously consider what it’s costing your company, and the benefits you could gain from retiring your old tech and upgrading to a new system, including advantages like better security and greater efficiency.
Any publisher toying with the idea of implementing a subscription model for their business must understand the various options for data ownership offered by different software vendors. This is one reason why it’s essential to write a request for proposal (RFP) when you’re looking for a new solution. Creating an RFP will also give you the opportunity to talk to various teams within your organization, and get their feedback and buy-in regarding a shift toward subscriptions—as well as the best tech to make it happen smoothly.
One option worth considering is Lineup Systems’ Amplio software, the first complete recurring revenue platform built to accelerate publishers’ success in the subscription economy. Amplio is designed to kick your subscription strategy into high gear, ensuring you never miss an opportunity to engage new readers or delight your existing audience.
A lack of organizational alignment around revenue diversification
You can have the fanciest new tech on the market, but if the different teams across your media company aren’t on the same page regarding your revenue diversification strategy and goals, it’ll be difficult to get any new initiatives off the ground—let alone to see results.
Our recent report, Combined Revenue Models Gaining Traction in Media Industry, suggests that publishers may be overconfident when it comes to the topic of interdepartmental collaboration, and maybe underestimate the challenges associated with working together to take their businesses in a new direction.
Digital collaboration tools can boost productivity by up to 30%, according to GoRemotely. This is especially significant considering that many employees around the world are still working from home due to the Covid-19 pandemic.
However, collaboration and alignment rely on more than being able to communicate quickly and easily (although that’s important). Publishers must ensure that their staff understands why they’re pursuing new revenue streams, and how these models can actually help serve their audiences better while contributing to a healthy bottom line.
Having a discussion with your team about the future of your media organization—and asking for their input—can go a long way toward getting buy-in for new initiatives.
Misplaced enthusiasm for fleeting trends
You know that colleague who keeps insisting you “go all-in on TikTok?” That’s exactly what we’re talking about when it comes to fleeting trends. We’re not saying the social network will turn out to be a bust—we’re simply cautioning you not to put all of your eggs in one basket and schedule a full-day retreat for your team to learn a new dance routine. (Yes, we know it’s slightly disappointing).
“It takes continuous industry and general marketing research to watch for signs a trend has arrived,” according to this article by the Digital Marketing Institute. “Fads [can] still play a role in your marketing strategy…but only as a tactic.”
Publishers should remain focused on the bigger picture as it relates to revenue diversification, and keep a keen eye on the industry to evaluate whether a new development is likely to be a trend—or just a fad. Tap into your audience data to gain insight on what content types and formats have been resonating over time with your market.
Two major areas where publishers have seen success
The topic of media revenue diversification isn’t all doom and gloom. Media organizations are navigating this new landscape with an open-minded and adaptable approach, and many have made strides in 2 particular areas.
Subscription models
Numerous small digital publishers around the globe are now generating substantial revenue from audiences, according to the recent RISJ report referenced earlier in this article. These outlets include MediaPart in France, El Diario in Spain, Zetland in Denmark, Dennik N in Slovakia, the Daily Maverick in South Africa, and Malaysiakini in Malaysia.
“Willingness to pay for convenience, news explained by people [audiences] like and feel a connection to, and a sense of belonging does exist,” Lea Korsgaard, Editor-in-Chief at Zetland said in the report.
E-commerce offerings
Dennis Publishing (a UK and US company) caught onto the e-commerce trend early several years ago. The company has ramped up its affiliate revenue model across its publications such as The Week and Men’s Fitness, which has led to repeat business from clients, greater website traffic, and longer site visits.
“As well as all the tech gadgets like cameras, laptops, and mobiles, the site now sell karaoke machines, mattresses, and vacuum cleaners,” according to this article by Digiday.
In addition, NBCUniversal launched a new checkout product in 2020, which enables audiences to click on featured products in articles or videos and make a purchase directly from within the piece of content.
Uncover more insights around revenue diversification
Media executives agree that revenue diversification is an important focus for the future of the industry. If you’re wondering how this might play out in your own business, download our report with NAPCO Research and Adweek, which includes insights from over 100 senior media executives about their plans to grow their revenue.
