Publishers: think more internationally

09 Aug 2017  |  Michael Tomlins 
Publishers: think more internationally

It's time for publishers to rediscover their ambitions and harness the potential of their global audiences, writes Michael Tomlins

Globally, 60% of the digital advertising market is controlled by Facebook and Google, with newspapers’ share of the remaining pot predicted to decline by 9% this year. In contrast, the number of global internet users reading newspapers online is currently at 40% and is growing particularly on mobile; while global online newspaper revenues grew by 30% between 2014 and 2015.

Looking at these numbers, it is unsurprising that Guardian Media Group recently announced a huge shake-up in its print and digital strategy. As well as outsourcing its printing, it is also working towards breaking even at operating level by 2019 by developing and growing its membership offering and restructuring its advertising business.

Separately, The Wall Street Journal (WSJ) also announced it is stopping its European print edition and scaling back the Asian edition with the aim to focus on digital subscriptions. While digital is undeniably a critical part of any revenue strategy, these announcements raise questions about low targets and the benefits of international reach.

Fundamentally, these publications need to be more ambitious. To successfully update their monetisation strategies, publications need to align their strategies with changing reader behaviour, and harness the surge in digital engagement with traditional news media. This will allow them to build on their global reputation, rather than withdrawing their presence, and deliver a more international monetisation strategy to support world-class journalism and deliver quality content.

Digital content offers a supply chain that is limited only by language, not by physical distribution. This low barrier to entry has allowed BuzzFeed, for example, to chip away at mainstream media’s readership. Its model could be used by traditional publishers to expand existing products into new markets, launch completely new products, or grow revenue in exciting, but un-monetised markets.

To maximise on this international and mobile opportunity, it is critical that publishers adapt to changing reader behaviour and support how they want to consume the content. Globally, in 2017, the average use worldwide of social media as a source for news is 54%. In Latin America, these numbers rise to around 75%.

With increasing numbers of consumers finding their way to publications from social media sites having originally only been interested in one specific story, there needs to be a change in how publishers think about paywalls and enable access to content.

In the US the number of people paying for news subscriptions increased last year from 9% to 16%, according to the 2017 Reuters Institute Digital Media Report and globally 13% of consumers have paid for news. However, in many markets, including Hong Kong, Korea, Malaysia and Taiwan, as well as Poland, France and the Netherlands, alternatives to subscriptions are proving more popular, including one-off purchases for single editions, print/digital bundles, and donations.

There are also strong indications that these numbers could grow further. The number of consumers who have paid for video, for example, is 25% globally. This consumer habit of digital snacking is growing, driven primarily by mobile, and means consumers want to access content from multiple sources. However, the publishing industry is yet to take full advantage of the clear trend that consumers are willing to pay for individual pieces of content that they think are of value.

Recognising this customer behaviour also means different strategies for news and content. The always-on nature of social media means that news has no value unless immediate. Opinions and exclusives have more inherent digital value - combining a new content mix with a frictionless payment method could transform performance.

This is an excellent opportunity for publishers to monetise their back catalogue, with consumers willing to pay small but cumulatively significant amounts for single pieces of content. By monetising this resource publishers like the Guardian can harness a significant untapped revenue stream in their archive of content that, may not be current but, is still highly relevant and has a market value.

However, as huge brands including Amazon, Spotify, Google, and Facebook have already recognised, in order to be able to reach a global audience, payment methods need to adapt. Publishers need to consider the provision for monetisation opportunities in global markets - perhaps where their current payment service provider (PSP) does not traditionally work and other operational considerations limit their reach.

This is a critical lesson for publications like the Guardian, where 62% of its audience is sourced outside of the UK and US and with 73% of its global audience accessing content via mobile. Equally, with the WSJ abandoning its international print presence to focus on digital subscription, it will need to ensure that this move doesn’t damage future readership reach.

WSJ must implement a solution that will allow them to continue to reach both existing and new readers in regions that no longer have access to the print edition. To realise the potential of its global readership, it needs to recognise that mobile customers need a mobile friendly payment strategy.

Publishers need to take into account that consumers in many countries do not use cards the same way that they do in the UK and US, therefore existing subscription payment methods need to adapt according to their audience.

From the Middle East to Asia Pacific, and even in Germany, many countries have extremely low card penetration. To deliver content to this audience, publishers need to diversify and offer alternative payment methods for subscriptions and content - to reflect the fact that despite there being five billion phone owners globally, there are only 1.5 billion credit card owners.

There is no doubt that the publishing industry has seen confidence dampened by change and disruption, but now is the time for publishers and news organisations to rediscover their ambition and focus on international growth.

Rather than scaling back or aiming to break even, they need to maximise on the readership by harnessing the potential of their global audiences. However, to realise this opportunity, the options for how this audience can access and pay for that content need to be more closely aligned with consumer behaviour and expectations.

Michael Tomlins is CEO of Infomedia


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