New momentum, new strategies
2019 was the year of the podcast. Media coverage of this topic has been extensive. More and more publishers have launched podcasts but will this really save the sector? Alongside the well-known ones, such as the New York Times Daily or the Guardian, some Advantage clients have developed their own. Bayard Presse just launched its own for 7 to 11-year-olds, and De Telegraaf also has one.
However, publishers are entering a competitive field where they are not necessarily in the best position. There are radio stations, especially public ones (Radio France, the BBC ...) whose programs in podcast format are well-known and get huge audiences. There are also pure players like Majelan in France or Parcast in the United States, which both create and broadcast. But the market is especially well-covered by streaming players like Spotify, which has just bought Parcast, or Apple which has one of the main access channels with its app. And finally, there are book publishers whose markets for audiobooks are growing rapidly. In the case of Audible, its owner Amazon is never far away.
A viable business model for podcast profitability has not yet been found. The main source of revenue is advertising, but the numbers are small, despite doubling in volume in one year. Audience funding is less common, although The Anfield Wrap, a channel dedicated to sports journalism, has managed to attract more than 10,000 subscribers at £5 per month. But in the absence of a profitable model, publishers justify their investments with the anticipation of conversions. The New York Times Daily attempts to reach very young audiences, in hopes of instilling a life-long habit. The strong commitment demonstrated by listeners is also of interest to the Financial Times, which sees it as a fertile breeding ground for prospecting. Le Monde in France may have found a concrete way to achieve this, by building podcasts designed as extensions of articles. After listening to podcasts, the rate of visits to the online source articles increases significantly. The Le Monde approach now being tested offers a new strategy---giving subscribers premium podcast access.
Besides the podcast, a more promising avenue linking journalism and subscriptions. At the Digital Innovation Summit in Berlin in 2017, a consultant reminded his audience of publishers of an obvious but neglected observation: your content is your main asset, so don't give it away! His message was aimed mostly at social networks where editorial assets yield virtually zero return. Two years later, at the INMA Digital Innovation Summit 2019 in Stockholm, the topic of journalism driving subscriptions made for some fascinating presentations.
Actually, paywall growth, and in particular the freemium model, puts journalists in the position to make the business decision of whether their pieces are available for free or require payment. Alexandra Beverfjord, editor-in-chief and CEO of Dagesbladet (Aller Media) recalls the daily question asked about each article: should it be free or behind the "wall?" The daily Le Temps goes further, asking each journalist to declare a value for the contribution of the article to the business. While the metered paywall was managed by marketing, Marc Isler of Tamedia highlights the key role of editorial in freemium.
Could the next step be data-driven journalism? This is already the case in Australia at NewsCorp. Brendan Collogan, Head of Customer Marketing, developed Verity, an application that uses artificial intelligence to evaluate the contribution of each article published. Each is classified as primarily for acquisition of readers/subscribers or for boosting loyalty. This approach is only in its infancy.
What is the future of the publishing industry? 2018 showed signs of hope with the upsurge of digital subscriptions, but the perfect recipe for success has not yet been found. The research needed to find it is expensive while the continuing losses leave less and less funds for this purpose. The pattern of buyouts, restructurings and vanishing companies will undoubtedly continue. We can only hope to find a new balance, perhaps by discovering new ways to diversify or by developing a winning advertising strategy to compete against GAFA. See you in 2020!