The common dilemma of on-line publishers has always been whether they should derive revenue from subscriptions or advertising. The choice for most has been the arguably simpler advertising route. But times have changed and some at least are being forced to question that wisdom. Is it too late?
Early in the on-line publishing revolution proponents appear to have developed a consensus that said it wasn’t possible to have a model that generated revenues from both subscriptions and advertising. Its easy to see how they arrived at that decision, the criteria for ad. sales is, after all, site traffic, but traffic is limited when payment is required for access.
However, with advertising revenues falling and costs escalating, more than a few publishers are wishing they could go back and start again. Readers are happy of course, and its a brave and optimistic man who will hang his reputation on persuading them to pay for what they already have for free. Besides, while free access, will broaden your visitor profile, advertisers expect tight targeting and to some extent that’s what the web is all about. So, is there another solution?
Maybe its time to change the way we view publishing? That’s all types on-line and off. Last year I was involved with a number of publishers who were all, internally at least, questioning their traditional understanding of the business they were in. All healthy stuff.
To me, publications have always represented the epitome of a brand. I have said many times in this blog and elsewhere that brands are communities, held together by common interests, beliefs and values and publications, especially specialist press, are just that.
Mature operators in other sectors have come to recognise that selling anything is a whole lot simpler and requires far less investment if everyone you approach shares the same perspective. That’s why brand development is so important. The problem for publishers is that so few of them have leveraged their communities as, say an fmcg brand might do. Basically, they have set up a really great store, but it has a very limited offer. My belief is that now is the time for publishers to recognise that their business isn’t necessarily publishing, but that this is merely the means they have to gather an audience to whom they can make revenue-generating offers of pretty well any products and services that might appeal to their community members.
I’m not the only person who is thinking this way. One of the UK’s biggest publishers (it wouldn’t be fair for me to say who) are developing a new strategy on this basis already and others are certainly discussing it. I am working with another right now whose future clearly lies in diversification. Of course, there is always the danger that diversification stretches resources and distracts managers from their core business, but we are developing a model that overcomes that and I can see a number of alternative routes to the same objective.
You don’t need me to tell you that times are hard and they’ll get tougher yet. If your business is struggling now you are likely to be among the millions of victims of the economic downturn, so what better time (I guess you could have done it already) to take a radical look at your business model.
There’s a silver lining in every cloud and if a publisher sees their future in owning interests in diversified businesses that could be fed by his community, there are a whole lot of struggling businesses with great products who are open to a very favourable deal right now. And, once you get your corporate head around the paradigm shift, a switch like this isn’t that difficult to bring about, and it can happen very quickly.
I realise, that there are publishers who have so far been able to perfect that balancing act between subscriptions and advertising. The result is usually a really great, tightly defined and high value community that advertisers prize. But it is a balancing act that’s going to get tough to carry off and this doesn’t exclude these publishers from the opportunity. In fact, it could be even more lucrative when starting from a base as stable as theirs. Worth a thought I think.