“We’ve made a huge mistake.”
That’s the general sentiment among publishers discussing the current state of the magazine industry at Digiday’s Publishing Summit Europe earlier this month. According to Lucinda Southern of Digiday, 150 publishers gathered to talk reader revenue models, recruiting and retention, and the general state of the ad landscape.
“As premium publishers, we’ve made a huge mistake in allowing consumers to believe they can consume content for free,” said one attendee. “I can have the biggest brand but still be competing with all the content for free online. Two years ago, we gave away content on Facebook Instant Articles; it increased traffic but revenue was significantly cannibalized.”
We are now hearing publicly what we’ve been saying for a while now – giving away your most valuable commodity is not the way to run a business. Condé Nast, for example, is putting all their content behind paywalls by the end of the year. It is now on publishers to figure out how to reverse more than a decade of free content models and find a new path to profitability.
It can be done. We are witnessing the rise in successful paid content. For a while it was like swimming upstream against a rising chorus of “if it’s online it must be free,” but publishers persevered and we see more publishers innovating with paywall strategies and being more creative with subscription offerings. Every day we see evidence of publishers getting paid content right. The once heavily ad-based publishing model is being driven more by subscription goals than clicks.
Beyond that, we see publishers ditching the massive content distribution platforms, as Facebook engagement plummets for brands and ROI on programs like Instant Articles shows little reason to continue.
Digital ad revenue is not going to save the day; Facebook has made it clear they aren’t there to help publishers figure this out. Collectively, the industry is realizing that their future is in their own hands, and reliance on third-party distribution really was too much of a crapshoot.
The change can be slow and painful. “It’s tough moving revenue generation from advertising to subscriptions,” said one attendee. And balance the use of content distribution for reach vs. revenue is tricky, as another attendee noted, saying “Our coverage is B2B and B2C. B2C relies on reach, and we have to watch out we don’t lose reach in subscriptions.”
Reach is important, certainly … but not at the expense of your best content. Marketing content reaches; paywall content brings in sustainable revenue. It’s time to reconsider the very nature of marketing and reach in the publishing industry, and have a go at a more sustainable model.