Newsbrands are increasingly feeling the pinch, and for most, the diversification of their revenue streams seems to be part of the solution. What has caused this move, and what are publishers doing now and looking to do in future?
Print advertising spends saw another significant fall in 2015. In an overall ad market which grew at a rate of 7.5%, national newsbrands saw ad spend fall by a reported 11%. According to the Warc expenditure report, the popular presses were hardest hit, with digital revenue failing to pick up the slack in print income.
Advertising revenue and cover price are essential to the commercial model of most newsbrands. However the latter is increasingly under pressure in a world where audiences have to be convinced of the merits of paying for a news product, and the continued journalistic quality and integrity this allows.
So what are newsbrands doing to stem their tumbling revenues? For some, such as the Times, an online paywall has been part of the solution for many years now. However their recent increase in cover price suggests this hasn’t gone all the way towards providing an answer. With the other major News UK newsbrand, The Sun, reversing its decision to implement a paywall, it suggests this is certainly not a one size fits all solution.
One of the most interesting trends in recent times has been the wider activities undertaken by newsbrands that go beyond simple membership or paid content.
News UK, looking at diversifying their offering and driving direct revenues from their already engaged audience beyond advertising, have recently announced ‘The Sun Bet’ – a new online platform which will see the tabloid become bookmaker. This has been identified as an interest for Sun readers and the publication hopes to see a new revenue stream as a result.
This moves away from the newsbrand seeing its audience as one singular group and marketing a subscription model to all of them. Instead it demonstrates a shift towards targeting specific segments of their audience with a separate Sun product. This helps The Sun monetise its offering and it gives readers more touchpoints with the brand – integrating it into other aspects of their lives.
Such trends are evident elsewhere in the market. Events are a growth area for a number of publishers from awards, to forums where sponsorship opportunities are available, to member-exclusive partnered events and talks shepherded solely by the publisher. City AM’s London-focussed events are well tailored to their audience and are a key revenue stream for the future. This is alongside its more recent controversial move to bring down the barrier between the commercial and journalistic, allowing brands to publish content to its site.
The Financial Times, which has long lived behind a paywall online, is one brand which has numerous revenue streams outside of its regular content. Ranging from Ignites (the FT service for the asset management industry which acts as a subscription service for translated overseas articles) through to its Non-Executive Directors Club, wherein members pay a fee to benefit from appointment news, networking and tailored events. Ignites is an online platform where previously a newsbrand looking to perform a similar job may have looked at a new print offering. The FT stands as an example of a newsbrand which has long been segmenting it’s audience in the manner News UK are now looking to do and targeting them with additional benefits from which it can derive further revenue through these ‘satellite’ brands.
Outside of advertising and subscriptions, newsbrands are evidently at various stages in the challenge of diversifying their revenue streams. E-Commerce is another area of potential growth to look out for, if publications feel they could compete with the might of Amazon.
The most successful brands will be those which are able to gain the most insight into their audience: coming up with solutions which allow them to bring their audience closer to them without alienating or producing irrelevant opportunities.
It will be key over the next few months to see the varying successes of papers as some retreat behind paid content, and others push forward with satellite brands and wholesale new offerings for readers to spend their cash directly.