Too many are terrible at it. Test your newsroom: How many sentences do you need to explain your value proposition?
The “streaming wars” are one of the biggest media battles of our age. They have disrupted the traditional TV business. The feud also highlights the importance of a clear value proposition
The video content world is going through a revolution. Cable bundles are being unbundled, media companies are setting up streaming services.
But as the market reaches saturation, the competition is heating up. According to data from Antenna, a subscription analytics startup, US consumers on average subscribe to 1.5 streaming services. (The data is from January 2021.)
Basically, it means most customers have one streaming service, some have two, and very few have three or more. Even in the advanced US market having more than one streaming service subscription is not mainstream.
Sure, each year more people are buying multiple streaming subscriptions, so the share of such customers is growing. But so does the competition.
Factors for subscribing to additional platforms are pretty straightforward: 1) To expand the range of available content. 2) To watch programs you used to watch on TV and can’t find anywhere else. 3) To watch a particular program you heard about. 4) To access original, exclusive content. 5) To replace other more expensive TV services. 6) To limit commercials.
If you look at streaming services subscriber growth, you see Netflix up front, Disney+ catching up quickly (though it’s still not available globally). Others like HBO Max, Hulu, Paramount+, Discovery+ are just getting started.
In the end, it will all come down to the value proposition of each streaming service. In their case the content (movies and shows) they produce and have in their catalogues.
Value proposition, explained
“Value proposition” can mean different things for different people. For SVOD, it might be the content. For other organizations it may be the technology or product design.
Having a clear value proposition matters. Especially if you’re a subscription-based businesses
Nespresso, which uses quality and convenience to drive recurring revenues from selling proprietary pods, is an interesting example. Strategyzer.com’s Alexander Osterwalder (co-inventor of the Business Model Canvas) explains how they turned one-off transactional revenues (buying from a cafe), into repeating monthly income (with switching costs if you leave the pods).
The lesson for media managers? If you want a recurring, reader revenue business for your news outlet, have a clear value proposition.
The Membership Guide (a resource hub filled with tools, practical advice, and membership model case studies) explains value proposition like this:
“A value proposition is a statement of the value a product or service creates to address a particular user need. You can and should define a value proposition for any product or service you create.
Defining your membership value proposition will help you turn ideas like these into an experience that offers value to your members. It offers a blueprint for what your membership program should accomplish for them and what you need to build to get there.”
The Economist value proposition is explained in this older NiemanLab interview: “We sell the antidote to information overload — we sell a finite, finishable, very tightly curated bundle of content.”
Other interesting publisher value propositions include The New York Times, the “newspaper of record”. Their literal promise is to bring you “All the news that’s fit to print“.
Or take Axios Local, the recent experiment by the US-based news startup. It proposes to help readers get “smarter, faster about their hometowns” with free daily newsletters.
A winner-takes-most market
Streaming services are dominated by the people’s top choice(s). (Spoiler: it’s Netflix). Similarly, researchers constantly tell us news publishing is mostly a winner-takes-most game.
Last year’s Digital New Report by the Reuters Institute highlighted that “most people only have access to paid news from one brand, creating winner-takes-most dynamics”. But the report also noted a significant minority in the US and Norway had two or more subscriptions (often a local or specialist title and a national one).
I think that is a great analogy to the state of streaming services. More mature markets have a significant minority with more than one subscription and that minority is growing. But competition remains fierce.
From time to time I get to speak at regional and local news operations, from broadcasters to digital media. One thing I keep coming back to is how little they are thinking about their value proposition.
It is not just the small organizations.
Over the past year media across the world had to change the way they operate their business. To stay in the black, many turned to reader revenue.
Sure, you probably heard of successful cases that managed to transform. Sadly, 2020 was a record year for journalists losing jobs in the US, worse than 2008.
A change in business model and the way we operate has changed for good a long time ago. The pandemic only sealed that deal.
But in order to have a successful reader revenue business you have to first convince your audience there is something worth paying for. We all should do a better job of communicating that.
This piece was originally published in The Fix and is re-published with permission. The Fix is a solutions-oriented publication focusing on the European media scene. Subscribe to its bi-monthly newsletter here.