The decline of print media has been explored endlessly. Everyone is agreed that the traditional business model is broken. And most people agree that there is no silver bullet which will solve the problems facing publishers in this new environment.
To summarise the new reality:
- Print circulation is declining across the board, and in many cases will become unsustainable as a mass distribution channel.
- Advertising revenue in the print medium is declining rapidly, and advertising overall is becoming fragmented across many types of properties, including social networks, blogs, aggregators, and other services.
- Content is expensive, but almost no one will pay for it online.
- Publishers are able to freely reach much wider audiences than ever possible before, including new emerging markets, but the competition for eyeballs is fierce.
So the problem is huge; affecting hundreds of publishing companies, and many thousands of employees at those companies. So what can be done? Well, lots of things. And most of them simple, but its the complexity of managing many new and different models that is causing problems (well… and some crazy head-in-the-sand distractions). Even at this stage, many online business models are classed as “experiments” and are therefore not assigned due weight in the organisational plan. This leaves new businesses (like Craigslist, Monster, Facebook, WordPress, etc etc) the opportunity to leapfrog major publishers in specific areas, leading to the slow death-by-a-thousand-cuts that we now see.
Dan Blank of RBI has a good list of potential revenue streams (and he goes into more depth on the relevant options for B2B publications) which is worth reading. To provide a more general approach, I have summarised the main approaches as a framework, and then highlighted the most interesting and effective approaches I have seen. Some are fundamental shifts from the traditional publishing model that are only suitable in some contexts, and some are new revenue streams that are more universally applicable.
It is important to understand that publishers must move away from trying to monetise content, and focus on monetising their audience. This frees the publisher from a one-dimensional paid-content model, which usually won’t work, and from the relience on CPM advertising, which doesn’t seem to be working right now. New publishing business models will almost always combine many revenue streams, but the following is intended as a framework for exploring the possibilities.
A framework for the new publishing business model
Audience revenue drivers
Advertising – the more targeted and engaging the better. Standard formats don’t work best, but do reduce the cost of sales.
Affiliate/CPA – augmenting content with links to relevant products and services on an commission or cost-per-action basis. With the huge coverage of affiliate networks, and startups like Skimlinks (which turns product links into affiliate links), there are always relevant products to which readers can be referred.
Sponsored Content – clearly marked articles, videos, podcasts, and other content forms that are branded. See this post for an overview of the recent growth in sponsored content.
Content revenue drivers
Custom publishing – creating bespoke content for brands, for distribution as sponsored content or on the brand’s site or network. This post presents the case for custom publishing. A timely example is the recent launch of AOL and Sear’s collaboration on Good News Now.
Syndication – charging for republication of content in other formats and on other channels. With the rise of the link economy, this has become less profitable, but there are lots of opportunities. For example, Sunsilk’s microsite in India pulls in MSN India entertainment feeds.
Paid-content – charging users to access certain premium content. This can also include repurposing existing content into new and valuable formats such as ebooks, print, and mobile apps.
Data revenue drivers
Lead generation – connecting brands with users that an expressed or implied interest in the product offered. For a raw example, see Incisive Media’s IThound, which is a portal of premium content for the sole purpose of linking vendors with warm prospects in the technology and finance sectors.
Renting user database – conducting direct mail and email campaigns to the user database on behalf of brands.
Market research – providing anonymised preference and behaviour data for market research purposes. This is especially relevant if detailed and actionable data is being recorded as part of the publishers standard business process.
Advertising data – selling behavioural and other usage data to advertising networks for better targeting. This is only appropriate for very high-volume sites, but I have heard that a couple of advertising networks are working on easy-to-implement solutions which will allow less-trafficked sites to sell-back their data.
Brand revenue drivers
Products – selling iPhone apps, ebooks, market reports, or even physical products that are relevant to the audience. You can see an overview of iPhone apps run by magazines here, and read about a magazine that sells physical products as part of its new business model here.
Events – running events, meetups, webcasts, unconferences, panels (etc) for the audience. Many B2B publishers have been doing this for years, and given that “real-world” events are holding their value in the digital age, it is worth every publisher looking at this revenue opportunity.
Services – selling related services to the audience. This one really requires publishers to stop thinking like a traditional newspaper or magazine. Le Monde in France allows vetted bloggers to use “yourblog.lemonde.fr” subdomains for around EUR5. A website in Moldova operates in similar way.
Licensing – renting the publishing brand for use on products, events, and services of related companies.
Please let me know any improvements and comments you have on the above. Although I’ve tried to simplify the issues into a framework, I am very aware that every publisher will have to chart its own course, based on the vertical, audience requirements and other factors.