As traditional media revenues continue to fall off a cliff thanks to the precipitous decline in print advertising, there seems to be a desire on the part of media companies to somehow find a single solution that will magically cure this problem — hence the increasing popularity of paywalls. But as media industry analyst Ken Doctor points out in a recent post at the Nieman Journalism Lab, it is far more likely that success for media entities of all kinds will come by making smaller bets on a number of different things. The big problem for the industry’s traditional players is that they have spent decades getting good at doing one thing. But now not as many people want that thing, and experimentation and rapid innovation is not in the media companies’ DNA.
Doctor says that after years of hoping the rise of the Web and digital media would not decimate the industry, followed closely by the hope that digital ad revenue would somehow arrive and close the gap, print executives are finally starting to understand that both of these hopes are futile:
Until recently, the holy grail was summed up in two words: replacement revenue. Now the jig’s up. No matter how fast you shovel digital dirt into the chasm of print loss, you can’t recreate the past; you can’t fill the hole.
Stack those digital dimes as fast as you can
John Paton, the CEO of Media News Group and a leading advocate of the “digital first” approach for newspapers, has said that the only possible response to the problem of digital dimes’ not making up for the loss of print dollars is to “stack those digital dimes” as fast as possible. In other words, accumulate as much as possible from as many sources as possible (while also reducing costs to try to stem the bleeding). In his Nieman post, Doctor notes that Meinolf Ellers, the managing director of German multimedia agency dpa-infocom, made a similar point at a recent conference of news executives:
What we all see — newspaper publisher or news agency — is that the bundle is eroding, losing its power. The more we see the bundle losing market share and reaching the end of its lifecycle, the more we have to work on smaller, fragmented products that, not each by each, but overall, can compensate. That’s the strategy.
This reminds me of a phrase that David Weinberger, a fellow at Harvard’s Berkman Center for the Internet and Society and co-author of the book The Cluetrain Manifesto, came up with to describe how the Web works: He called it “small pieces, loosely joined.” One of the things I took from this is the idea that the Web allows for individuals and small groups or entities to have almost as much power as — and in some cases more power than — established players. The barriers to entry, and the barriers to discovery, are so much lower now, thanks to the Web’s “democratization of distribution.”
We have seen the impact of exactly that phenomenon in the media industry in spades over the past few years, with the rise of digital-first entities such as the Huffington Post (s aol), TMZ, Politico and others, as well as the rise of individual media sources’ using social tools to become the equivalent of media entities in their own right or hybrids such as Andy Carvin of NPR and his one-man Twitter newswire model.
What will readers pay for other than just a paywall?
In his discussion of what media outlets can do to make a number of smaller bets instead of one or two big ones, Doctor refers to a number of things, including “in-sourcing” — using printing presses and distribution chains to provide services to others who need those skills — as well as providing marketing services outside the traditional newsprint platform. These are also things that Paton has focused on while trying to remake the Journal-Register Co., a chain of papers he took over after it emerged from bankruptcy.
But the things that really interest me are the ones that fit the kind of “velvet rope” model I have argued for as an alternative to a hard paywall around content: the ones that encourage a kind of membership approach, where new features or ways of packaging content or experiences related to that content are offered to readers. So live events, for example, which both the Texas Tribune and the Atlantic have been using to their advantage, or e-books, which are a different way of packaging content, can be remarkably profitable, even if that content has already appeared on the Web for free.
Unfortunately, many traditional media companies simply don’t have the kind of culture that allows for random experimentation or rapid iteration and prototyping: in other words, a startup culture. Some papers such as the New York Times have a skunkworks or research lab, and others such as the Washington Post have experimented with new features such as the Trove recommendation engine or the Facebook social reader. But many of these still feel like afterthoughts or side projects rather than a coordinated plan of attack on multiple fronts. The ones that are trying the hardest always seem to be the digital natives, or the ones with the gun to their head.