Will tablets save publishing? Should content be protected by pay walls? Are micropayments the key to the future? As revered newspapers, magazines, and networks face extinction, content publishers need to face a more fundamental challenge: to think differently about the value of content.
Publishers Are Facing Extinction
With revered publishers and networks facing extinction, the arrival of tablet devices and a reconsideration of pay models for content has created a media frenzy to start off 2010. There has been excited talk of micropayments, subscriber-only pay walls, mergers, acquisitions, divorces, and everything in between. It is a conversation with real stakes, with well-loved titles like I.D. Magazine and Portfolio feeling the consequence.
There is good news and bad news: global revenue for entertainment and media is forecast to rise to $2.2 trillion by 2012, boosted by advertising-supported digital and mobile media and an explosion in the adoption of broadband. And yet many publishers still face the threat of extinction.
There is no silver bullet that can save publishing. Micropayments have yet to prove fruitful for legal and logistical implementation issues. The iPad and other similar devices will certainly help, but are not a panacea. One thing is for certain; we are approaching the issues the wrong way and asking the wrong questions.
Creating A Profitable Canvas
Despite publishing’s ailments, the consumer landscape for content is actually trending positively. The global audience for content is greater than ever. People are consuming more content than ever before. And although the luster of CPM advertising models may slowly be fading, the competition for audience attention and an engaged target audience is more valuable to advertisers than ever before.
The challenge, as it was recently framed to us by an SVP at Time Warner, is to create a profitable canvas for journalism and entertainment.
Stop Thinking Like a Publisher
The bogeymen for the publishing industry are legion, but to lay the blame on a clutch of technology companies and the Web is to fail to understand the problem. The fundamental economic equation that rewards content creators for delivering value to consumers has changed irrevocably.
Digital properties have undercut the value of simply delivering content to consumers. The total value assigned to access is zero. The measured and scientific promise of digital advertising has never been realized. Meanwhile, audiences have been taught to actively ignore and avoid display advertising, turning online publishers into violators, disruptors, and interrupters of the very content experience around which they should be building loyal and engaged audiences.
The value of content must be aligned to the content itself, not the value of the distribution platform. To do this, publishers must start to think differently about how content can be valuable to audiences, and about how target audiences can be connected to the advertisers that care about them.
Add New Types of Value, Not New Types of Costs
Publishing companies need to begin investing in a few critical initiatives that will allow them to re-take ownership of how consumers and advertisers get value from content. They will also become more nimble as technological advances create new opportunities for people to discover and consume content. Discerning companies should act on these critical insights:
Audiences are increasingly accustomed to discovering and consuming content in streams that are rich, real-time, personalized, and malleable. The most obvious are social platforms like Facebook or Web publishing standards like RSS. However, publishers should pay attention to the success of blogging as a content curation platform, like Engadget, Talking Points Memo, New York Magazine’s Culture Vulture or the social discovery enabled by Boxee or Last.fm.
Publishers must deliver content not only as carefully composed packages of content, but as well-tagged streams of content available to other syndicators, curators, and innovators.
Content streams allow editorial and curatorial minds to re-mix and re-distribute content, creating new avenues of discovery and value.
Relevance is King: Deliver Content in Context
The exciting opportunity presented by connected devices lies at the intersection of the content that a person is consuming and the personal, social, geographic, and temporal contexts that can be provided by the device and its other applications. This creates a completely new set of opportunities to deliver relevant content to consumers. And it is bigger than simply making an interactive magazine.
The possibilities are myriad. Imagine sitting down on an airplane and pulling out a "digital in-flight magazine" with news, travel essays, historical articles and tips tailored to your destination, with local offers interspersed. Or sitting in Fenway and having your iPhone automatically serve you a menu of the greatest Red Sox articles and videos—from Sports Illustrated, local papers, and local television stations—so you can consume them with your friends and family.
Whimsical or practical, educational or entertaining, publishers can unlock a stunning array of opportunities to richly decorate the content with useful metadata.
The potential is tremendous, and who better to envision how content can be made relevant than the producers and curators of that content?
Monetize the Experience, the Insight, and the Audience. Not the Access.
People recognize and appreciate the professional effort that goes into creating and curating quality content, and will pay for it if it is unique and differentiated (as proven by the 1 million plus WSJ Online subscribers and 500,000 MLB.TV subscribers).
Publishers create the platform for capturing value by aligning the audience’s perception of value with the quality and curation of the content, not the convenience of accessing the content. Value is created directly from the consumer, through subscription, micropayment mechanisms, and more powerfully, by creating engaged audiences with defined interests against which advertising can be effective.
By thinking about monetization not in terms of distribution but in terms of the value of content, publishers can create a more natural alignment between their core competencies of creating and curating content, the wants and needs of their audience, and the desires of their advertisers.
This change in mindset is what is needed to liberate creators and curators of quality content to better serve their audiences.
Unlocking the Infinite Library
The challenge to publishers is to avoid trying to reconstitute traditional physical distribution value in some new form of digital distribution. Distribution no longer has value, and it’s not coming back. Get over it.
Publishing cannot be saved by creating digital layouts of physical magazines. Nor can publishers hope to out-compete technology companies by creating proprietary devices or platforms for consuming content. That is picking a fight that cannot be won.
The real future for successful publishers is more complex. Consumer technology continues to evolve at a breakneck pace. Mobile and connected devices create richer opportunities to deliver content to audiences, some tied to plausible payment mechanisms. Barriers for producing and accessing digital content continue to lower. Models for capturing revenue appear, succeed, fail, and disappear.
So what is the future of publishing? For publishers, consumers, and advertisers alike, the future shares the following characteristics:
Value will come from precision, not scale: it will be realized by depth and frequency of engagement, not volume of impressions.
Value will be recognized in delight, insight, and usefulness, not cheapness of cost. Value will be in quality and relevance of content, not convenience of access.
Publishers need not face extinction; the profitable canvas is malleable. It is a matter of picking up the brushes and creating a precise and useful model.