From titles changing hands at accelerating speed as media companies race to consolidate and capture larger audiences within their focus markets, innovating to adapt to the demands of new platforms and diving into AI – these were some of the major publishing industry trends identified by James Hewes, president and CEO of FIPP at the FIPP Insider event in London yesterday.
As CEO and president of FIPP – the network for global media – James Hewes is well placed to observe crucial changes and trends within the publishing industry. FIPP’s mission as global organisation is to empower its members to build market-leading international media businesses through intelligence, solutions and partnerships. With more than ten international events annually, bringing media leaders together to share experiences across a vast range of portfolios, FIPP continues to take the pulse of the industry at regular intervals.
This important role being played by FIPP, Hewes told delegates to FIPP Insider London, enables this global trade association to find the best solutions on behald of its members and build partnerships that’s essential to grow business and face the trends that will shape the future of this industry.
These solutions must be found within an environment in which innovation is accelerating much faster than humans often predict, Hewes warned.
One of the significant recent trends in the publishing sphere, said Hewes, is the huge wave of consolidation happening within businesses through acquisitions. It kicked off in January 2017 when Burda announced that it was acquiring Immediate Media from private equity owner Exponent and then the deals accelerated, with the biggest and most significant – “by some distance” – being the acquisition this year of Time Inc. by Meredith. It brought about an unprecedented period of change.
“Now it is happening all the time. There’s a new deal every week. And it’s going to continue. The slowdown in the industry we have been experiencing over the last 20 years has lead to a shake-out.”
In practical terms it means that companies are starting to focus on market leadership in one or two market categories. A good example is Meredith who has made it clear that they are after the women’s market. “Any title that’s not aligned with the women’s market are sold off.”
Hewes said that there are three positive spin-offs that’s being observed as a result of this consolidation phase.
Firstly, there are a raft of new players entering the publishing market. New blood brings new investment and new ideas “and they will add to our industry”. He referenced Time magazine, which is now being owned by Marc Russell Benioff, the American billionaire internet entrepreneur, author and philanthropist who founded Salesforce, an enterprise cloud computing company.
Secondly, the consolidation in core businesses means that there are new ideas and innovation within many of the existing large publishers.
According to Hewes a good example is Immediate Media’s renewed focus on the food market (taking into account the recent acquisition of BBC Good Food by Immediate Media in the UK). These examples reflect the how companies will now be “ruthlessly determined to capture the entire space with their focus market” – incorporating all platforms across print, digital and live events as well as finding new and innovative ways to reach their audiences.
Finally, much like in a forest after a fire, the death of the old is leading to the birth of the new. In pretty much every market across the world, there are thriving independent publishing sectors, very often focused on print, springing up in the gaps left by the death of older brands.
“These new entrants are ‘unburdened by preconception or expectation’, able to thrive because they aren’t thinking about the past, only about the future. Among them will be one or two who grow to become first leaders in their sectors, adding to the diversity of ideas, inspiration and innovation that we need to continue to deliver growth,” said Hewes.
Paid content and reader revenue
One of the most positive trends in recent years for publishers, said Hewes, is the renewed focus on paid content. “What publishers forgot is that they were always really good at selling subscriptions.” Yet, for some or other reason publishers thought they could not do this in the digital age. Luckily this is starting to change. “We need to recapture the relationship we used to have with readers”.
To be successful in selling online content, said Hewes, publishers need to make some investments. “You must invest in knowledge about your readers, you must invest in data, you must invest in the tools that allow you to analyze that data. Then you will maximise your subscriber value.”
He said people will always be prepared to pay for unique quality content. “We are just about at the edge of an explosion in the age of the paid content revolution. What has been happening in the newspaper space with paid content will also happen the magazine space.”
Ecommerce and events are also becoming very important sources of revenue for publishers. Events in particular, Hewes emphasised, creates perfect platforms for advertisers, are great for reader engagement, loyalty and brand building. Publishers who are doing this right are achieving up to 25 per cent of revenue from events.
The state of advertising
The advertising market, Hewes warned, has grown more complex to generate revenue and although many publishers have diversified revenue streams, it remains one of the most important. Aspects such as generating revenue from native advertising and video has increased in importance, which means publishers now need a clearer strategy to integrate user experiences with opportunities for advertisers.
One of the biggest questions within the advertising sphere relates to transparency. Ad fraud has taken on huge proportions, Hewes warned, with some authoritative studies showing that only half of the reported traffic on the internet are actually human traffic. The rest are all bots. While nobody really knows how large this problem is, it is a fact that publishers are losing billions because of malicious activities within digital advertising. “Publishers need to work together in the future to collectively combat this.”
Consumers are starting to re-acknowledge the power of touch and feel in publications, said Hewes. Print magazines linger in homes and have a longer life. More importantly, advertisers are now starting to recognize this. On top of this there are lots of innovation happening within the print space. He referenced the ‘Innovation in Magazine Media’ report, published in conjunction with FIPP, highlighting ways in which print media is adapting to the future.
Some magazines, like Private Eye, The Week and Monocle, said Hewes, are “unashamedly print focussed” with no content being published online, successfully forcing readers to revisit the newsstand to be able to consume their excellent journalism.
Google, Apple, Facebook, Amazon (the GAFA)
Publishers cannot ignore the influence of platforms because it is a fact that the large platforms earn nine out of every ten advertising dollars in digital media.
Yet, warned Hewes, social media platforms such as Facebook are facing huge problems. “The future direction Facebook will be heading is open to dialogue.” Meanwhile content providers cannot rely on Facebook to generate traffic referral.
While this means that the importance of SEO is back and Google algorithms have become very important again, “do not swap rylience on one platform for reliance on another platform,” Hewes warned.
While Apple seems to move from bad to good with a clear focus on protecting consumers’ privacy and data at the expense of rivals, publishers need to remain, above all, focussed on the needs of their own consumers and not play into those of the platforms.
The power of platforms and platform-focussed content
Publishers, these days, need to think hard about all the various platforms they needs to create content for and also know how they plan to distribute the content across all of these platforms, said Hewes. The mistake many publishers made was to create one set of content and flow it across all platforms. This simply does not work. Each platform comes with its own set of unique requirements and content needs to be created within that framework.
Hewes alluded to the fact that the role of voice interfaces will continue to rise. This trent is in line with the massive growth in popularity of smart speaker and voice services. This has already caused a revival in the popularity of podcasts.
Publishers’ approacy should be to explore partnerships to take advantage of these developments on new platforms and find ways to monetise from branded content.
At the same time it is also the task of responsible publishers to challenge fake news at every opportunity “to ensure our industry retains credibility and protect authentic journalism”, said Hewes.
The tech community, said Hewes, believes passionately that blockchain will “revolutionise everything”. The question, however remains if blockchain will be a back room technology that will improve processes or a consumer facing technology that will actually add value to a product or a service.
Some of the early advantages of blockchain are advanced payment systems and distribution platforms. These are already being explored by Mastercard, Samsung, Bank of America, and Santander, said Hewes. If it offers solutions to publishers as emerging technology, it should be explored.
The coming of AI
AI has already proven to be of huge importance for publishers although many are still trying to establish how it can be used to enrich content output, increase personalisation and increase the understanding of how consumers interact with brands.
Current uses of AI at the moment are restricted to powering content recommendations, editing homepages or the sectioning of pages on websites, to changing marketing approaches for dynamic paywalls, very basic routine journalism and translations.
Yet, most smart publishers are seriously looking at how they need to respond to the future potential of AI and the problems it could help to address. The hope would be that AI would be able to solve most of the overarching data strategy challenges across both advertising and editorial.
“We need to explore how AI could enrich our content output by aiding research and commoditising dull and repetitive tasks,” said Hewes.
Talent and culture
Feedback across the board, “from senior players in the industry”, said Hewes, “have confirmed over and over that if you want your company to succeed, you need to create the right culture and employ the best talent”.
This means company culture must be ready to embrace continued change to be able to continue to be successful. “The workplace environment needs to foster innovation.” To achieve this, Hewes warned, companies need to find the right combination of physical workspace, innovative culture and training opportunities provided for staff.
Flexible working and diversity also plays important roles. Whereas flexible working during hours that suit employees improves productivity, diversity improves on the variation of talent adding to the company’s ability to perform and innovate.
Re-published with kind permission of FIPP, the network for global media