Without generating revenues directly from readers, journalism is doomed, write the editors of FIPP and Innovation Media Consulting’s Innovation World Report in their editors’ letter for the 2018/19 edition.
In the letter, Wilpers and Señor write, “The future of magazine media has much potential… but without the support for the folks for whom we create all this great content, well, it will be increasingly unprofitable, and, ultimately, unsustainable.”
In short, “Only journalism worth paying for will save journalism.”
They emphasise that “reader revenue is not simply subscriptions”, but includes a diverse portfolio of revenue streams from readers, from commerce to events and newer media formats.
However, of subscriptions they say, “one of the pleasant discoveries after years of committing the media ‘original sin’ (putting content online for free) is that readers are finally willing to pay for our content… and not necessarily at bargain basement prices.
“The very success of the internet – the massive tsunami of free information – has, in the end, actually worked against the web. Of all the free information out there, what’s trustworthy? What is real?“
Quoting The Economist’s Michael Brunt, speaking at the FIPP World Congress in October last year, they explain how it offers a trusted filter on world affairs in a “finish-able package” which is the “antidote to information overload.” This creates value, with The Economist positioned as a “premium product that costs three to four times more than other similar publications but readers are happy to pay for it.”
They also reference Meredith executive chairman Steve Lacy telling The Wall Street Journal, “The beauty of millennials is that they are very comfortable buying anything online and using a credit or debit card.
“Our interface with them is the credit card and auto renewal. It has to be the right content, and it has to be served to them the way they want it. But they’ll pay for it.”
The editors also argue that digital advertising will continue to decline proportionally to other revenue streams and, while it will reach an equilibrium, it will never support journalism solely by itself. Indeed, they make a passionate case for media companies to diversify revenue streams, ending their letter with the remark, “until and unless you focus on migrating from (solely) ad revenue to reader revenue, it’s game over”.
FIPP’s Innovation World Report 2018-2019 launches on 19 March at Digital Innovators’ Summit in Berlin. Now in its 9th edition, the report is written for FIPP every year by Innovation Media Consulting Group — the report author is John Wilpers, Senior Director USA of Innovation Media Consulting, and it is edited by Juan Señor, Senior Partner.
You can download the complete editors’ letter here. FIPP members receive a digital copy of the Innovation Report for free.