Online business models. I hadn’t thought about ‘business’ at all except in a critical (but not always negative) sense until about a year ago. Here is an abstract to a paper I have in the works. However, I’ve been thinking about business models for the magazines since I’ve been involved in developing a new online presence for some of them. This post is the result of some of the thinking I have been doing on the subject and has been in the works for a while now (several weeks). I’ve been thinking about it constantly but have little time to actually work on it.
I work at Express Media Group, which publishes a number of niche-market enthusiast titles. EMG is currently developing its online presence and is working on ways to successfully integrate print and online publishing. As well as working as a Production Editor, I’ve been involved in developing some of the websites for the motoring titles. The first new website up is that for Zoom magazine.
We have a massive advertising campaign starting tomorrow that requires the other websites to be up and I am waiting on our overworked web team to finish them. I look forward to seeing the results.
I’ve been carrying out research in my own time to think about new business models that integrate print and online publishing. I have no official role in this at EMG (yet), rather I have been treating it as an extension of my PhD research on enthusiasm in modified-car culture where I looked at the relation between the enthusiast media and the scene over a 30 year period.
I used philosophical concepts to examine the composition of power relations in the organisation of the scene (dispositif) and how this has changed a number of times over the time period (an event-based conception of history). Now it seems my research is going to be the most relevant if it is developed in a simple set of critical tools for understanding legacy business models.
The general character of these legacy business models is mostly well understood. The current public workshops being hosted by the FTC are working on the issues and problems of “how the Internet has affected journalism”. The FTC has posted a Staff Discussion Draft paper that explores some of the points raised over the course of several months worth of hearings. In the first few pages of the paper (2-3) the FTC outlines the general problem with legacy business models faced by all print-based publishers. I have extracted the three main points below:
1. Newspapersâ€™ revenues from advertising have fallen approximately 45% since 2000. For example, classified advertising accounted for $19.6 billion in revenue for newspapers in 2000, $10.2 billion in 2008, and is estimated to be only $6.0 billion in 2009.
2. With the advent of the Internet, advertisers have many more ways in which to reach consumers, including, for example, through a marketerâ€™s own website or through topical websites that relate to the products that an advertiser wants to sell (e.g., a soccer blog for soccer equipment). Search engines also provide sites for advertising related to particular search queries.
3. Although some types of online advertising (e.g., advertising targeted to a consumerâ€™s known interests) can generate greater revenue than other types (e.g., banner ads), the vast supply of online sites for advertising reduces the amount that an online news site can charge for advertising at its site. This means that online advertising typically generates much less revenue than print advertising (often described as â€œdigital dimesâ€ as compared to the dollars generated by print ads). It appears unlikely that online advertising revenues will ever be sufficient to replace the print advertising revenues that newspapers previously received.
First year journalism students are taught about the ‘news hole’ well in the actual publishing business there is often an ‘advertising hole’ as well. As more advertisers have moved online to directly target the niche market enthusiast communities that the advertiser services, there are less advertisers looking at print-based advertising. Of course, this is a generalisation as there are many enthusiast communities, of mostly older enthusiasts, that have not gone online.
All is not lost, however. There are other ways to sell advertising beyond simple ‘display’-type advertising. Dan Blank has a good post up from over a year ago on different sources of revenue for online media publishers.
The main goal here is for editorial teams to be pursuing fewer standalone articles that rely solely on CPM ads, and look to more integrated packages that build many products from a single effort.
For the last six years or so I have long looked at this from the flip side. Media events assembled from a series of inter-related texts. Often these texts are assembled around a non-media product, so a product is doubled as its media-based simulacra. It was the basis of my work I carried out on exchange to Sweden during my PhD looking at media events not as the media coverage of an event, but the event produced through the media.
In social media circles posting the same material across a number of channels is called â€˜content leverageâ€™. So a Facebook post about a blog post describing a Youtube video is Tweeted. At EMG I have been working on producing media content from single opportunities that can be distributed across a number of media channels. So far the best example of this was an ECU guide in Zoom issue 147 that is currently on the stands. I have several hours of video that I shot and I am currently editing to be posted to our Youtube channel and posted to our blog. Here is an example:
The real problem with thinking about new business models for niche/enthusiast media that integrate online and print elements is that most of the current discussion about the state of print media has been about ‘hard news’. Niche/enthusiast media and ‘hard news’ work following different journalistic models of content production. For example, Blank writes:
An underlying theme in many of these is to create evergreen content whose shelf life is longer than a news article â€“ with multiple segments that extend the ways you can market it and sell it. Focusing on business needs beyond the cycle of “breaking news” may diminish the reliance on the single revenue model of advertising.
We already do this to a certain extent, but we are going to be doing much more of this style of content production and it is going to be a real challenge for editorial teams working under increasingly tight deadlines (we make a magazine per week on average!). To make this possible Blank has two suggestions:
1) Editorial teams mapping out a product roadmap, not just an editorial calendar.
2) Editorial teams working more closely with their sales teams to come up with these ideas, and ensure that the sales dept has this information with enough time to test the market, and ideally, sell these products.
Working closer to advertising sales teams is not a problem, the other challenge, beyond deadlines, is getting a sense of what is happening in the scene. There is so much activity nowadays that to track it all, even just all the online activity, for the scene in Australia is a full-time role.
So where to go from here? I am currently rewriting some of my PhD research for a draft paper about legacy media business models for niche/enthusiast media.