The transition to digital monetization
The transition to digital is complicated and it’s slower than expected – digital isn’t a static concept.
By Giles Crosse Frome Reuters Community
Google’s new subscriptions lab examines the constantly evolving platforms, tools and formats that serve audience and business customers, and how small and large publishers approach monetization challenges differently.
In Part 2 of this exploration, Jed Williams, Local Media Association (LMA) and Ben Monnie, director, Google News & Publishing Partnership Solutions, discuss pathways to digital profitability. If you missed it, we recommend you discover Part 1 before reading further…
Modern publishers face a unique set of challenges that require digital strategies and subscription playbooks tailored to their audience and their business model.
Google News Initiative’s (GNI) subscription lab partnership seeks to provide publishers with the opportunity to learn from each other, and enable new digital subscription model blueprints for the entire industry.
Talking with GNI about the lab, we gained fascinating insights into the changing digital landscape and how large and small publishers face different monetization challenges.
Lessons learned
Jed Williams, chief strategy officer, LMA, told Reuters that new skills and competencies are required to operate a profitable digital business; this often starts with cultural transformation.
“Publishers have run successful print-focused businesses for generations in many cases, which presents a classic dilemma of sustaining the core enterprise versus investing in less-proven digital models,” he begins.
“We know that running a print subscription business isn’t a prescription for building a successful digital subscriptions business.
“Many, if not most of these [digital] consumers are not print subscribers, so a new relationship must be fostered in which they favor a brand’s content and experience enough to become a paying subscriber. This presents sophisticated considerations around content choices, data collection, promotional offers, pricing and payments.”
The minnow vs the whale
Recently, Digiday argued that for larger national news brands such as The New York Times, the pivot to digital subscription revenue has been a tremendous success, but identified concerns this pivot will only benefit the largest titles.
“That’s precisely the type of hypothesis we want to test through the subscriptions lab,” answers Jed. “What happens with the extensibility of an effective digital subscriptions business to news publishers of different flavors, particularly mid-sized and smaller titles that don’t have national or international brands?
“We’ve seen promising early signs with many local publishers large and small:
- stronger conversion rates than even some national brands
- significant two-year growth trajectories
- appetite from local customers to support publishers’ important work, and more.
The success of niche and digital startup models also suggests customer interest in supporting quality news and content.”
Jed believes local publishers in particular are creating entirely new digital businesses, and “the lab will help them navigate these challenges to build a structured roadmap.”
Can the minnow run away with it?
Ben Monnie, director of global partnerships solutions, Google News & Publishing notes that in some cases, the smaller players are doing better on digital transition and monetization.
“We see some local news publishers converting visitors to their site into subscribers at higher rates than metro or national publishers. But, taking advantage of this opportunity isn’t easy. There are fixed costs to setting up a robust digital subscriptions effort, particularly around the technology stack, that are more difficult for smaller publishers to defray.”
He suggests every publisher should ask themselves what is it they are offering to possible subscribers that sets them apart, that shows people they are getting something they can’t get elsewhere.
“This is true regardless of what size of publisher you are, small and niche to big and national.Each publisher has to look at it’s own unique selling points and really leverage those to build their paying audience and keep them coming back.”
Subscriptions
“Subscriptions have been around for a long time, and certainly before the internet era,” Ben continues. “Over the last couple of years you have seen a greater emphasis on them as businesses look to diversify their revenue streams.
“That being said, the digital subscriptions world is still maturing. Consumer attitudes, acquisition and retention strategies, the subscriptions fulfilment and management technology stack and other key pieces of the puzzle are all still changing and improving.”
He too references the dilemma which has slowed digital transitions. “It’s worth noting that many legacy news publishers have successful, and very profitable print subscriptions.
“For many, there is a classic innovator’s dilemma: invest in the growth area and risk cannibalizing your current business, or spend the majority of your time and money keeping the business you currently have.
“We are seeing a broad range of publishers having success: like MediaPart, an online-only home for investigative journalism in France, and niche-focused digital natives in the US like The Athletic and The Information. Even small and community publishers are getting in the game with contributions models.”
The final word
Evidence suggests that the dilemma between resourcing legacy and new digital models is slowing the shift to digital, but that small and large publishers alike can gain real traction from embracing digital subscription models.
But, a solid UVP is fundamental to attracting digital subscribers, along with willingness to let them pay in flexible ways for top quality content.
In the final part of our GNI digital subscriptions conversation, we seek to establish how tomorrow’s publishing payment models will ultimately play out.
SOURCE: https://www.reuterscommunity.com/topics/monetization/the-transition-to-digital-monetization/
