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13 Business Models to Enable Your Media Company to Thrive Ne Ti Sa Tion MO 13 BUSINESS MODELS TO ENABLE YOUR MEDIA COMPANY TO THRIVE NE TI SA TION INNOVATION Monetisation IN MEDIA 36 WORLD REPORT BUSINESS MODEL CLIENT INCOME INCOME TRANSACTION PROFIT REQUIREMENTS RISKS FOCUS COLLECTION POTENTIAL COSTS POTENTIAL B2C Unique, relevant, must-have content; systems Customers not willing to pay. PAIDSUBSCRIPTIONS CONTENT Direct & B2B for raising awareness of that content High churn rate A strong funding culture and strong Unless you already get foundation funding, NON-PROFITNON-PROFIT B2C Direct connections to the investor community the chances of breaking into that world in and wealthy individuals a substantial way are low Deep understanding of audiences. E-COMMERCE B2C Direct Excellent platform. Unique and exclusive Lousy logistics and customer service E-COMMERCE & B2B product portfolio Expertise to offer irresistible “content Strong existing competition in your niche. B2C Direct on stage”; internal event expertise Poor event organising capability. Unappealing EVENTSEVENTS & B2B or connections with event organisers content or presenters Good partnerships with commercial and Creating a membership programme CLUB B2C Direct other outlets for product/service portfolio. that is just a thinly veiled subscription that CLUB & B2B Geographical reach aligned with media coverage offers little of value An IT team that has already created (or is Substantial investments to hire expensive ITIT PROVIDERPROVIDER B2B Direct capable of creating) unique media software IT talent, and creating and maintaining and working comfortably with clients the software Sales staff adept at consultative sales, Increased competition from big platforms ADVERTISING B2C Intermediated deep data to prove qualified audiences and from growing native/branded AD DEPENDENT & B2B and results, native/branded expertise advertising agencies Creative teams within the organisation. Increasing competition from both traditional AGENCYAGENCY B2B Direct Marketing intelligence competencies and upstart advertising and marketing agencies Sophisticated data-gathering software and Weak databases, insufficient analytics DATADATA BROKER B2B Direct internal analytics competencies to identify capabilities, inability to show results potential clients and deliver bespoke data BRAND B2C Core brand deterioration due to poor BRAND LCENSER Direct Strong and valued brands LICENSING & B2B licensing choices Unique (and expensive) investment talent with There are no guarantees. You risk losing it all. INVESTORINVESTOR B2B Intermediated deep understanding of the media start-up world The potential gains are insights into the cutting and the start-up world within your niches edge of the industry and profits NOSTALGIA B2C Direct EDUCATOR B2C Direct & B2B INNOVATION IN MEDIA WORLD REPORT 2020-21 High Medium Low 37 BUSINESS MODEL CLIENT INCOME INCOME TRANSACTION PROFIT REQUIREMENTS RISKS FOCUS COLLECTION POTENTIAL COSTS POTENTIAL B2C Unique, relevant, must-have content; systems Customers not willing to pay. PAID CONTENT Direct & B2B for raising awareness of that content High churn rate A strong funding culture and strong Unless you already get foundation funding, NON-PROFIT B2C Direct connections to the investor community the chances of breaking into that world in and wealthy individuals a substantial way are low Deep understanding of audiences. B2C Direct Excellent platform. Unique and exclusive Lousy logistics and customer service E-COMMERCE & B2B product portfolio Expertise to offer irresistible “content Strong existing competition in your niche. B2C Direct on stage”; internal event expertise Poor event organising capability. Unappealing EVENTS & B2B or connections with event organisers content or presenters Good partnerships with commercial and Creating a membership programme B2C Direct other outlets for product/service portfolio. that is just a thinly veiled subscription that CLUB & B2B Geographical reach aligned with media coverage offers little of value An IT team that has already created (or is Substantial investments to hire expensive IT PROVIDER B2B Direct capable of creating) unique media software IT talent, and creating and maintaining and working comfortably with clients the software Sales staff adept at consultative sales, Increased competition from big platforms B2C Intermediated deep data to prove qualified audiences and from growing native/branded AD DEPENDENT & B2B and results, native/branded expertise advertising agencies Creative teams within the organisation. Increasing competition from both traditional AGENCY B2B Direct Marketing intelligence competencies and upstart advertising and marketing agencies Sophisticated data-gathering software and Weak databases, insufficient analytics DATA BROKER B2B Direct internal analytics competencies to identify capabilities, inability to show results potential clients and deliver bespoke data B2C Core brand deterioration due to poor BRAND LCENSER Direct Strong and valued brands & B2B licensing choices Unique (and expensive) investment talent with There are no guarantees. You risk losing it all. INVESTOR B2B Intermediated deep understanding of the media start-up world The potential gains are insights into the cutting and the start-up world within your niches edge of the industry and profits An easily accessed database of old photos, stories, Cost of handling exceeds profits due to pages/covers easily reproduced. Someone/team inefficiencies, insufficient demand assigned to handling sales/fulfilment Internal expertise or access to external Poor execution; lack of expertise; poor expertise; a reputation for expertise in your reputation; courses that miss the target niche(s); an audience looking to expand their audience's interests knowledge base INNOVATION Monetisation IN MEDIA WORLD REPORT 38 Subscriptions 2020-21 THE SUBSCRIPTION BUSINESS MODEL “Reader revenue is providing stable and growing income while advertising has remained volatile, with many reporting worse than expected results in 2019.” — The Reuters Institute ot only is subscription “I do think there is an unbundling of the maga- revenue growing, it is zine subscription,” Esquire Editor-in-chief Michael also morphing beyond its Sebastian told Folio. “Just as iTunes detached original form to include tracks from albums, we may be seeing the general greatly expanded niche access model for paid content splinter into passion vertical subscriptions, points that micro-subscriptions serve with prod- profitable enterprise uct mixes that go far beyond text and images.” B2B sales, conversions We are also seeing the creation of entire de- to high-end product partments dedicated to subscriber retention. subscriptions, and, most Tellingly, back in late 2016, The Washington importantly, whole Post had no one dedicated to retention. Today, departments dedicated to there are 25 people working on retention. Simi- retention. larly, The New York Times tripled its retention- This transformation focused staff between 2015 and 2017. of reader revenue has “You don’t get money from conversion, it’s prompted what media from retention,” Kjersti Thorneus, Director industry magazine Folio called “a deep rethink of Product Management at Schibsted Media Naround what a magazine is or can be”. Group, told WhatsNewInPublishing. INNOVATION IN MEDIA WORLD REPORT 2020-21 39 52k to 13k KEY In mid-2019, The Los Angeles Times reported adding 52,000 new digital subscriptions in the first half of 2019, but netted an increase of only NUMBERS 13,000 due to churn. EditorAndPublisher.com 20m 5%-25% Since the first Global Digital Subscription (GDS) While there’s a certain allure that comes with Snapshot in 2018, the number of digital-only capturing new customers, keeping customers subscriptions reported had doubled from coming back will continually result in a greater ten million to nearly 20 million by the autumn ROI — and it costs 5-25X less to retain a of 2019. That number is impressive because in customer. Harvard Business Review 2018, Deloitte predicted that it wouldn’t be until the end of 2020 that there would be 20 million digital-only subscribers to news and magazine media globally. FIPP 0-25 Tellingly, back in late 2016, The Washington Post had no one dedicated to working on retention. Today, there are 25 people who work on retention 52% v. 14% in some fashion. Similarly, The New York Times According to the latest annual Journalism, tripled its retention-focused staff between 2015 Media and Technology Trends and Predictions and 2017. report from the Reuters Institute for the Study of Journalism, more than half (52%) of the 200 media executives surveyed in 29 countries said subscription and membership would be their main revenue focus in 2019. This compared with 6% 14% for advertising revenue. Reuters Institute Publishers with over 6% stop rates have “thriving” digital subscriptions businesses (a stop rate is the percentage of all digital users who are “stopped” by a subscription prompt, a paywall, or a meter limit), according to the Digital Pay- 10x Meter Playbook from The Shorenstein Center Research firm Piano has found that the average and Lenfest Institute. The 50th percentile conversion rate of registered users is 10x that of publishers in the study stops only 1.8% of anonymous visitors. Piano, a digital business of their readership with a paywall or meter. platform Publishers with sustainable digital businesses report stop rates above 4.2% of their readers. WhatsNewInPublishing From 1 to 8 Today, Investor’s Business Daily offers eight different products, each designed with a different investor
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