//Peter Whitehead /October 13 / 2014
News Media: Diversify or die
Frédéric Filloux of Monday Note says the era of news media based on a single product is over. Diversification is the only way: it’s no longer a question of whether to develop other revenue streams, it’s a question of deciding which ones will work for your business. He offers a guide to help media outlets work out which of their existing and potential products and services will yieldYieldThe percentage of clicks vs. impressions on an ad within a specific page. Also…//read more the best returns. These, he says, should be the relentless focus of their attention.
Filloux lists products and services found in many media businesses, then attributes a value to each one: “the sum of items in any given mix must translate into the famous Average Revenue per User (ARPU), a number that should be everyone’s obsession.” He identifies 14 products, services and target groups.
Then gives an assessment of the relative importance of each option, including:
Daily Print Occasional Reader: For most outlets, this is the least valuable customer. The costs of serving occasional, remote customers usually doesn’t make financial sense. “The practice needs urgent reassessment. In most cases, this means eliminating the weakest point of sales.”
Potential: Zero.
Priority: Low.
Daily Print Subscriber: Some – though a decreasing number of – customers will pay almost anything for their hard copy newspaper to be delivered.
Potential: Limited.
Priority: Limited.
Digital Subscribers: “For quality media, this is the most precious revenue stream.” To attract paying subscribers, you must produce “irreplaceable” content. The first step it so attract as many registered users as possible, then you have to “work on the conversion rate”.
Potential: High.
Priority: Top.
Events and Conferences: A competitive sector, though they can be profitable if they are genuine editorial products – supported by the news staff, the product of editorial thinking and provide something unique.
Potential: High if well engineered and executed.
Priority: Depends on the level of competition in your market. I’d say: High.
MOOCs (massive open online course) and Training Products: Real potential: for many people, deep training is essential just to survive in the job market. There are also dual market possibilities, i.e. corporate for paid-in-advance products and business-to-consumer for sponsored courses. A great opportunity for media to leverage their brand, reachReach1) unique users that visited the site over the course of the reporting period,…//read more and portfolios of advertisers.
Potential: High
Priority: Top.
Content Syndication: Serious consideration: “digital news is overwhelmed by shallow, recycled, often mediocre content. Premium is rare because it’s expensive and risky to produce. Therefore it carries tangible value.” If you create quality editorial products, you should target outlets that can’t afford original production.
Potential: High.
Priority: Should be on the very top.
Making all of this – and other items that could be added to the list – a reality, “requires agility, light structures (in some cases disconnected from the mother ship), dedicated staff who think fast and react faster. The upside is promising.”
Article by Peter Whitehead
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