Publishing Top Stories

Why a revenue mix matters

Once upon a time, not so very long ago, the regular income statement for most publishers had just two or three lines on it… advertising income, single copy sales and subscriptions. The balance between the three varied greatly depending where the publication sat on the ad-supported spectrum, but an individual title’s money mix was generally unchanging.

These days, it’s a bit more complicated. OK, that’s a massive understatement – it’s a lot more complicated.

Take advertising. Is your advertising income print or digital? Is your digital direct or does it come from third-party networks, or even platforms? Do you do dynamic display or native advertising? Sponsored content?

And what about you reader revenues… Print? Digital? Bundles? Do you sell subscriptions or memberships? What about micropayments?

And all of that is even before we start to consider ‘Non-Traditional’ revenues like events sponsorship and ticket sales. Or how about ecommerce… marketing services… branded content creation… consulting… market-data dashboards.

To talk about two or three revenue streams in the good old days is huge oversimplification. Publishers have always reacted to commercial pressures – and opportunities – by introducing new product offerings… belly-bands anyone?

The difference is these were typically extensions to a very tight core of related products and mostly print variations. Bookazines, supplements and special positions were all just amped up print projects.

Today – as the Triopoly sucks the growth out of the digital ad market – publishers are looking to extract value, not just from the content they create but from the audiences that consume it and that means chasing people across channels.

Fragmented audience, fragmented revenue

Digital has laid a lot of problems at publishers’ doors but the biggest is probably the challenge to reader loyalty. Pre-internet, choice was limited and, if you got your content right, you were all but assured a regular readership.

Digital, specifically social media, destroyed that sort of brand monogamy. When everyone became a publisher, everyone got more choice than they knew what to do with. And the dilution of attention has left publishers with watered down revenues in both print and online, triggering a desperate chase for new income streams.

Over the last few years, many media businesses saw their future in digital advertising delivered at global scale on third-party platforms. A 2016 chart from the Tow Centre for Digital Journalism shows US publishers present across up to 19 separate third-party content platforms.

That chart would probably look very different today; the distributed content party is over. This season’s pivot is paid content and that’s better because:

  1. It puts publishers back in control
  2. It puts quality back on the table

But paid content is no silver bullet. “No single stream of alternative revenue will make up for the declines that we’re seeing in advertising,” the former chief business officer at Condé Nast, Jim Norton, told Digiday in March. “You can’t say, ‘If we’re down 10 percent on advertising, we can make it up through subscriptions.’”

Build a broad revenue base

Five or six years ago the former head of Hearst magazines David Carey was telling publishers, “You need five or six revenue streams to make the business really successful.” I’ve probably rolled that quote out more than any other in conversations with publishers about revenue diversification.

Just last month Shortlist’s Mike Soutar expressed a similar sentiment during Media Voices’ Live podcast at Magfest in Edinburgh. “The future of magazine media is going to be a really mixed ecology.”

Whatever the mix, as David Carey suggested in 2012 and a recent Reuters Institute survey of digital leaders confirms, the right number of ingredients in the mix is probably six. Most of the publishers in the survey are ‘pursuing multiple revenue streams with an average of six different options viewed as or very or quite important.’

The top 10 choices, in order, are…

  • Subscriptions
  • Video Ads
  • Branded or Sponsored Content
  • Display Advertising
  • Events
  • Membership
  • Ecommerce & Affiliate
  • Related Businesses
  • Donations
  • Micropayments

Looking at this list, building a revenue mix doesn’t have to mean abandoning traditional income sources. Digital display, in fourth place, was marked as very important by almost 40% of survey respondents. Even that shining light of digital subscription sales, the New York Times, still gets nearly one third of its $415 million revenues from advertising.

The bottom line, literally, is that publishers can no longer rely on any one revenue line. The trick will be to stop over reliance on a single dominant income source – probably advertising – by building a complementary portfolio.


Peter will be presenting his latest co-written report, ‘Media Moments 2018’ in London on Tuesday 13th November. Places are free but limited, so learn more and RSVP here to guarantee your space.

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