How Publishers Can Save Themselves
Everywhere you look, publishers are under fire. The Washington Post was sold to Jeff Bezos. Time Inc, the world’s largest magazine publisher, is to be spun off by its parent and the NY Times years of financial woes is now leading to a massive exodus of talent.
Yet publishing itself is doing quite well. The Huffington Post and Bleacher Report created hundreds of millions of dollars of value in just a few short years. Others, like The Atlantic, have remade themselves in the digital age and AOL and Yahoo are very healthy.
So the situation is far from hopeless. In fact, there has probably never been a better time to be a publisher, it’s just that many have lost their way. Ironically, the way forward isn’t technological wizardry or even innovative business models—neither of which seem to be a major factor in successful operators—but in rediscovering publishing itself.
Reclaim The Mission
When Peter Drucker said that the “purpose of a business is to create a customer,” he meant that it is through identifying needs and developing new products that value is created. Every other business function simply supports the core mission.
In much the same way, the purpose of a publishing enterprise is to inform, excite and inspire. It is certainly not to sell ads, or to leverage content, or to directly receive payment from customers. Depending on your business model, those may be things that are important to do well, but they are not core to the mission of the enterprise.
Put another way, publishers need to stand for something. That’s how you attract great talent and get the most out of them. It’s how you maintain a loyal audience that will follow you across platforms and actively co-create with you to further the mission. If you expect anyone to ever care about your business, the first step is to start caring yourself.
Ditch The Paywalls
Many publishers think that the only true way to salvation is to erect a paywall. They believe that only by getting consumers to pay for content can it prove it’s worth. So they expend their limited resources—which could have been deployed to improve their product—on building ever more elaborate paywalls.
As I’ve said before, paywalls are stupid. Publishers historically haven’t made money on print and distribution—and for magazine publishers it’s actually been an enormous cost—so free digital distribution should have them dancing in the streets.
The golden rule of media is that, on balance, marketers will pay more for consumers than consumers will pay for content. The truth is that paywalls are rarely profitable once losses in advertising revenue are factored in. That doesn’t mean that some publishers can’t make money off subscription revenue, but those are exceptions rather than rules.
Once again, if your core mission is to inform, excite and inspire, you want to reach as many people as possible—not limit distribution—and your creative talent wants to be read, seen and heard by a mass audience. Paywalls, in almost every case, limit your ability to fulfill your mission.
Manage And Cultivate Talent
Most publishers started out in ad sales (as I did), on the other side of the “Chinese wall” from the creative teams. From a day-to-day operational perspective, creative people can be a nuisance. They want to protect their product from commercial intrusion and can sometimes even be derisive of fiscal prudence.
Yet it is creative output which achieves the core mission, not fancy technology platforms or big ad deals. Strong creative people take years to develop and it takes years more to build creative teams that can collaborate effectively. This has always been a challenge.
But now, it has become exponentially harder because there are far more skills sets to integrate, from technologists to usability experts to more traditional talent. One of the hardest things I’ve ever had to do as a manager is to forge an effective working dynamic between a team of fashion editors and a team of web developers.
And, to belabor the point a bit further, your ability to attract and retain talent is largely a function of their commitment to your core mission. Would The New York Times be facing a talent crises if people still believed that working there meant something special? Probably not and I don’t see how turning audience away through a paywall helps either.
Most of all, publishers need to stop mourning the loss of old revenue streams and start embracing the enormous possibilities that digital technology is unlocking. While adaptation is always uncomfortable, the potential for gain greatly exceeds the potential for loss. Here are just a few examples:
Automation: Historically, media markets have been made up of spot buyers and spot sellers, who haggled over research and rates, count “eyeballs” and make deals. It was, to be sure, a fairly silly way to spend a career. So it’s not surprising that this function is rapidly being automated through supply side platforms.
As Bob Lord of AOL networks pointed out in a recent HBR column, this is a huge win for publishers, not just because it helps reduce costs, but because it frees up resources to work with marketers on value-added promotions. In other words, automation will allow us to align revenue producing activity more closely with the core mission.
Video: Before digital, the biggest gripe among publishers was that they wanted a piece of all those massive TV budgets. Now, there is a new video ecosystem emerging which makes it possible for just about anyone to compete for TV budgets.
Community: Modern media brands thrive on community. Certainly, successful digital publishers like Huffington Post and Bleacher Report have done a great job leveraging what NYU’s Jay Rosen calls the people formerly known as the audience. When the audience contributes, both ad inventory and user experience benefit.
Unfortunately, many publishers have mistakenly evaluated their communities in terms of the size of their social media followings. That’s a grave mistake. The strength of a community is not a function of the audience’s connections to the brand, but in their connection to each other.
Satellite Brands: One strategy many publishers (including me) have implemented successfully is creating satellite brands. Goodreads, for example, built a strong product focused on books, while The New York Times—with all of its stellar literary content—never even launched a site.
Creating verticals using existing resources is a very cost effective way to create new, highly marketable inventory and strengthen communities. It also helps keep talent happy by giving them a place where they can shine.
The bottom line is that there has never been a better time to be a publisher. There have never been more opportunities to build an audience, deliver engaging experiences and monetize them.