Publishers need to migrate from advertising revenue to reader revenue as they make moves to charge for digital content. That’s according to the latest FIPP Innovation in Magazine Media released at the FIPP World Congress in London, the global publishing industry conference.
Mary Ann Azer, executive director of Magazine Networks, reported that was one of the key discussion points for publishers as she attended the FIPP World Congress in London on behalf of the Australian organisation.
The report, now in its eighth year, advised that free digital content needs to be monetised either through financial transactions or by readers paying with their data. Money should be made where the article is viewed – anything else is a promise of false prophets.
By commoditising content, the study noted, the publishing business has been devalued and this needs to be rectified.
Publishers heard that relying on display ad revenue is a one-legged stool. This is particularly true in the US market where 73% of digital ad revenue is controlled by Facebook and Google.
Publishers need to become digitally sustainable before they become print unsustainable or, in the words of The New York Times CEO Mark Thompson, “I am trying to build a digital model big enough and strong enough for when print revenue is at zero.”
The report cited Spotify and Netflix as encouraging examples of people being willing to pay for content, even millennials who have never known a time without free content.
A dip in traffic is to be expected by making digital content paid. However, the report suggested this would not be catastrophic and questioned whether large unpaying audiences or smaller paid audiences that actually generate profit were more important to the business.
The greatest challenge would be ensuring the content is worth paying for and that it has the power to trigger subscriptions. The best approach to do this, according to the report, would be to find scarcity or the niche for the content and then go an inch wide and a mile deep. Depth is key and will provide the volume required to drive revenue.
Photo: Gruner + Jahr Germany CEO Julia Jäkel speaking at the FIPP World Congress in London. c Osborne Hollis
This is an excerpt of the full article, which appears in the latest issue of Mediaweek magazine.
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