If nothing else, the impact of the coronavirus has highlighted the fragility of digital publishing. There’s a certain financial irony that although online traffic is up – with many outlets enjoying record page views – for a majority of organisations, overall revenue is down.
It’s a cliche to say that advertising delivers digital dimes compared to print dollars. But for evidence of the magnitude of this difference, look no further than earnings data from The New York Times.
- At the end of Q1 2020, The New York Times Company had 840,000 print subscribers and just over 5 million subscribers to it’s news and other digital subscription products (crossword, cooking and audio).
- Yet print advertising revenues were worth $55 million and digital advertising revenues $51.2 million (48.2% of total company advertising revenues) during this period.
- Print subscription revenues were also worth more: $155.4 million versus $130 million.
Only in August 2020 did the New York Times Company report that, for the first time, quarterly revenue (Q2 2020) was led by digital ($185.5 million in revenue for digital subscriptions and ads vs. $175.4 million for print).
What these numbers so clearly demonstrate is the continued value of print to many publishers, as well as the challenge of preserving print income (which is nonetheless in decline) while also growing digital and other revenues.
Given the challenge of current advertising markets, it’s no surprise that many publishers are looking to increase their revenue from subscriptions. However, this isn’t the only way they can generate more reader revenue.
Here are three ways that publishers and media companies are going beyond subscriptions and advertising to bring in revenues at this time:
Not surprisingly, lockdowns and quarantine have had a substantial impact on eCommerce, as consumers increasingly shop online and from the safety of their own homes.
As a result, “the performance of the online economy becomes the performance of the retail economy overall,” Vivek Pandya, lead analyst for Adobe Digital Insights told Bloomberg during the early stages of the pandemic.
We’ve written extensively about the eCommerce potential for publishers, as outlets move to close the gap between providing the inspiration for consumer purchases to offering a conduit for them. It’s a strategy that we are seeing across verticals ranging from motoring to recipes and food, travel to fashion, as well as homes, beauty and DIY.
During the pandemic, a number of publishers have begun to further realise some of this potential.
In March, Hearst sold 1 million products through site content across its 30 brands. Their stable includes titles like Men’s Health, Good Housekeeping and Cosmopolitan. Sales for April were likely to double again, they revealed to Media Post, representing a 358% year-on-year increase.
“We didn’t suddenly create a bunch of new content,” explained Kristine Brabson, executive director strategy and editorial insights. Instead, the company ensured that editors audited high performing traffic, and followed this up by checking to see if the products being recommended were in stock and appropriate for the pandemic.
“We started to see an increase in certain categories among what we produce day to day and month to month,” Brabson added. Hearst then “created more content in real time to answer some of those needs.”
It’s a similar story at Meredith and Condé Nast, notes Folio. “We’re on track to drive over $500 million in retail sales this year,” said Andy Wilson, SVP of consumer revenue at Meredith Corp, with cooking supplies as well as home essentials – such as cleaning supplies and home office furniture and accessories – driving much of this growth.
At Condé Nast’s Epicurious and Self, eCommerce increased by more than 70% in March, compared to 2019, again driven by people being at home cooking. Since the start of the pandemic, sales of recommended kitchen scales, for example, increased tenfold.
“As a general rule of thumb, publishers who are covering the coronavirus pandemic should feel comfortable asking readers for financial support during the time,” writes Stephanie Miles, Director of Digital Content at Web Publisher PRO. “Publishers who are not covering the current crisis may want to take a more nuanced approach.”
“Digital publishers are seeing surges in website traffic as people search for information about Covid-19, but capitalizing on that interest and asking visitors to pay for online memberships or subscriptions is a delicate proposition,” Miles cautions.
Mary Walter-Brown, CEO of the U.S.-based News Revenue Hub agrees, telling the Membership Puzzle, “I think it’s important not to appear opportunistic in this moment after we’ve worked so hard to build audience trust.”
In the article, Ariel Zirulnick shares how a number of outlets around the world have responded to the crisis, sharing lessons from Red/Acción (Argentina) Krautreporter (Germany) The Daily Maverick in South Africa and El Diario (Spain).
Of particular note, is that El Diario added 9,000 members (36,000 – 45,000) over a ten-day period in March, despite increasing their annual membership from 60 euros to 80 euros.
Behind eldiario.es there is no bank, no great fortune, no political party, no large communication group. We need your help because we have no one else to turn to.Journalist Ignacio Escolar
“They were transparent with their readers about this, detailing revenue losses, cuts they made to the salaries of top editors, and other budgetary adjustments,” Zirulnick observes.
“A membership model invites audiences to give their time, money, connections, professional expertise, ideas, and other non-financial contributions to support organizations they believe in.”
In contrast, subscriptions are a more “transactional relationship,” and the value proposition of each differs. Nonetheless, “both can — and will continue to be — critical to the future sustainable models that we so clearly need in this industry,” they add.
In some countries, members of a publication can benefit from their support being tax-deductible. In the U.S., an example of an outlet that highlights this possibility is The Rivard Report, a 501(c)(3) nonprofit, which covers San Antonio in Texas.
The site, which started as a community blog in 2012, became a 501(c)(3) nonprofit enterprise in 2015. According to its website, “it now features a staff of 18 full-time journalists and business team members and publishes a number of freelance contributors.” It offers four different tiers of membership, each with different benefits.
The website also prominently features a button encouraging readers to donate in its toolbar. During the pandemic, the team has also used an email newsletter to encourage donations.
In a similar vein, the Portland Press Herald (Maine, USA) offers users the opportunity to subscribe, gift a subscription, or make a tax-deductible donation.
As Stefanie Manning, vice president of circulation and consumer marketing, divulged to the Local Media Association:
“We have been very focused on our digital subscription strategy. … When the pandemic hit, we thought really hard about how do we not get off that road while at the same time expressing our need for support from our community beyond subscriptions… We very quickly put up a support message saying that we needed to support and that our coverage was going to be free but not free to produce.”
The paper is part of Masthead Maine, the state’s largest media network, which includes five dailies and 25 weekly publications and six specialty publications.
At the start of the year, before the coronavirus outbreak hit the U.S., the company had already announced that it would stop printing Monday editions for 4 of 5 papers in March, moving it to online only. According to CEO Lisa DeSisto, the cost-saving measure stemmed from the fact that the Monday papers aren’t profitable (other days are). They also have the lowest circulation and least ad revenue.
Of note here is that donations to The Portland Press Herald go to a program called the COVID-19 Local News Fund, which is administered by Local Media Foundation, a Section 501(c)(3) charitable trust affiliated with Local Media Association (LMA).
The program is only available for independent and family-owned media companies, with the express aim of increasing coverage of COVID-19 issues in local communities.
“All money raised by this effort will go directly to support COVID-19 reporting, to make sure the public has essential facts on this important topic,” the donation page for The Portland Press Herald states.
More than 100 other local news outlets across the States have also signed up.
Alongside administering the fund, the LMA also provides participants with other forms of support, including “a library of turnkey marketing and promotion assets,” as well as “customized campaign page(s)” and best practices, important angles to cover, and tips for remote reporting.
“Publishers who are being direct, honest and empathetic with readers about their challenges are seeing previously unthinkable levels of support from local communities,” writes David Grant Manager, Facebook Journalism Project Accelerator Program.
In the same post, Lynne Brennen, a former marketing executive at Dow Jones and The New York Times, and a coach in the Facebook Journalism Project Accelerator Program, argues that “the impetus for contributions needs to be clear and compelling.”
Connect donations to specific funds or newsroom initiatives, even in the context of supporting coronavirus coverage. Readers are suspicious of vague requests for support, at best, and see it as a reflection of mismanagement, at worst.
These principles apply to all three of these revenue efforts: eCommerce, memberships and donations.
In each instance, there needs to be a clear value proposition for audiences and transparency (at times lacking in the eCommerce space) about financial relationships and where the money goes.
This approach is essential if publishers are looking to embrace, or grow, these potential revenue streams; especially at a time when some audiences may have less money in their pockets.
This article is adapted from our free to download report, The Publisher’s Guide to Navigating COVID-19.