Can Di­ver­si­fi­ca­tion Save the Pub­lish­ing In­dus­try?

The Insider - - CONTENT -

De­spite the doom and gloom one con­tin­ues to hear in pub­lish­ing, the fact is that mag­a­zine launches have been out­pac­ing clo­sures since 2010.

And while over­all net growth is on the de­cline, the signs are there that the in­dus­try is sta­bi­liz­ing.

Mean­while as news­pa­pers con­tinue to strug­gle to rein­vent them­selves, mag­a­zines are see­ing much faster rev­enue

re­cov­ery de­spite the de­creases in print cir­cu­la­tion.

What’s hap­pen­ing in mag­a­zines that’s fu­elling some of this op­ti­mism? Given the lat­est trends we’re see­ing in the in­dus­try, one word comes to mind -- di­ver­si­fi­ca­tion.

Di­ver­si­fi­ca­tion has been the mantra of fi­nan­cial ad­vi­sors since the dawn of the stock ex­change, and for good rea­son. Putting all of one’s eggs in one bas­ket is a high-risk game in money; the same can be said for mag­a­zines.

Mag­a­zines by virtue of their fre­quency (or lack thereof) in to­day’s 24/7 in­ter­con­nected world have a much more dif­fi­cult time keep­ing the at­ten­tion of read­ers on their brands than daily news­pa­pers. Ever­green con­tent can help ex­tend the shelf life of mag­a­zine con­tent, but it’s not enough to re­tain the in­ter­est of au­di­ences enough to cap­i­tal­ize on the added at­ten­tion.

CON­TENT IS NOT ENOUGH

We’ve all heard the old adage that “con­tent is king”, but with the wealth of free in­for­ma­tion avail­able on­line to­day, con­tent has be­come com­modi­tized. It has be­come ta­ble stakes in a fiercely com­pet­i­tive bat­tle for eye­balls.

Which is why a num­ber of the more in­no­va­tive pub­lish­ers have filled the limbo be­tween is­sues with com­ple­men­tary prod­ucts and ser­vices de­signed to en­gage their read­ers be­tween page flips. These new busi­ness lines are not only strength­en­ing the ties with au­di­ences, they are form­ing new and, some­times, lu­cra­tive rev­enue streams for the brand.

Driven by the need to dif­fer­en­ti­ate them­selves in an over­crowded pub­lish­ing land­scape, mag­a­zine me­dia com­pa­nies like Fu­ture Plc and Condé Nast are recog­nis­ing that qual­ity con­tent is not enough to grow their king­doms; they need to in­vest in com­mu­ni­ties and com­merce.

Fu­ture Plc

A few years ago, Fu­ture Plc, like most me­dia com­pa­nies was suf­fer­ing from the dis­tresses of dig­i­tal dis­rup­tion. They were bleed­ing ink as fast as any­one, but in­stead of hang­ing on to the pipe dream of “If we print it, they will come”, the pub­lisher chose to dis­rupt it­self and trans­form its busi­ness from print to dig­i­tal through a com­bi­na­tion of fo­cus and di­ver­si­fi­ca­tion.

It started by ra­tio­nal­iz­ing its me­dia brands, sell­ing off non-strate­gic busi­nesses and fo­cus­ing on its core com­pe­ten­cies in tech­nol­ogy, games and film, mu­sic, pho­tog­ra­phy and cre­ative. But it didn’t stop there; Fu­ture took its trans­for­ma­tion one step fur­ther by di­ver­si­fy­ing its port­fo­lio with live events such as T3 Gad­get Awards, Golden Joy­stick Awards, Elec­tronic En­ter­tain­ment Expo (E3) ded­i­cated to PC gaming and The Pho­tog­ra­phy Show.

Ear­lier this year, the pub­lisher in­vested in a blog­ger net­work and just re­cently ac­quired Net Com­mu­ni­ties -- an award-win­ning dig­i­tal com­pany that spe­cial­izes in ad­ver­tis­ing so­lu­tions and pub­lish­ing.

Lever­ag­ing the syn­er­gies and spe­cial­ism of the two com­pa­nies was a smart idea. Not only did it so­lid­ify

Fu­ture’s port­fo­lio and brands such as T3, Giz­modo and TechRadar, it al­most dou­bled its tech-lov­ing au­di­ence to 15 mil­lion overnight. In the face of ad­ver­sity, Fu­ture made some tough and bold de­ci­sions to trans­form its print-fo­cused busi­ness into a dig­i­tally-di­ver­si­fied me­dia busi­ness. To­day Fu­ture is the UK’s lead­ing tech­nol­ogy me­dia pub­lisher. Both of their UK and USA busi­nesses re­ported prof­its in the first half of 2015 and in the US it was the first time in seven years.

Condé Nast

Although Condé Nast was not im­mune to the ef­fects of dig­i­tal dis­rup­tion, it has not sat on its lau­rels wait­ing for the in­dus­try to re­cover. It’s hard to keep up with this me­dia mover and shaker…

In ad­di­tion to its brand-based restau­rants and fash­ion and

design col­lege, the com­pany

launched Condé Nast En­ter

tain­ment (CNE) in 2011 to or­der to de­velop film, tele­vi­sion and pre­mium dig­i­tal video pro­gram­ming. By the end of 2014 CNE’s dig­i­tal video net­work ex­ceeded 2.3 bil­lion views and is now dis­trib­uted across ev­ery ma­jor video plat­form and over­the-top de­vices in­clud­ing Ap­ple TV and Roku.

In Jan­uary 2015 23 Sto­ries by Condé Nast was born, bring­ing to­gether the com­pany’s con­tent ex­per­tise, cre­ative ta­lent, dis­tri­bu­tion net­work and au­di­ence data for ad­ver­tis­ers and mar­keters.

With 74% of women want­ing to find and buy items they have seen in a mag­a­zine or on an app, it’s no won­der why we’re see­ing re­tail and me­dia start to con­verge at Condé Nast. Vogue, Harper’s Bazaar and Cos­mopoli­tan are all ex­per­i­ment­ing with “shop­pable con­tent”. And although they haven’t per­fected the user ex­pe­ri­ence yet to the level of Shazam, it’s only a mat­ter of time be­fore they start to cap­i­tal­ize on their shopa­holic au­di­ence.

In terms of build­ing com­mu­ni­ties, many Condé Nast brands have cre­ated Mem­bers Clubs (e.g. Condé Nast

Trav­eller Mem­bers Club, Style So­ci­ety and De­tails In­sider) which of­fer exclusive spe­cial deals, con­tests, fo­rums, polls and re­wards for mem­bers.

Condé Nast’s dig­i­tal au­di­ence reached 86.3 mil­lion adults in June of 2015 - a 60% in­crease over the same pe­riod the year be­fore. Ranked 21 among comS­core’s top 100 prop­er­ties, Condé Nast con­tin­ues to stay ahead of some pretty im­pres­sive sites, in­clud­ing Buz­zFeed, SheKnows Me­dia, Pin­ter­est, ESPN, New York Times Dig­i­tal and Scripps Net­work.

FROM CON­TENT TO CON­SUMERS

In the past mag­a­zine and news­pa­per pub­lish­ers fo­cused on mon­e­tiz­ing their con­tent and the best way to do that was ad­ver­tis­ing. To­day that ap­proach is def­i­nitely not serv­ing them well as print ad­ver­tis­ing de­clines con­tinue and ris­ing dig­i­tal ad­ver­tis­ing isn’t com­ing close to mak­ing up for the losses. Which is why more and more pub­lish­ers are look­ing to di­ver­sify rev­enue streams and shift their fo­cus from mon­e­tiz­ing con­tent to mon­etis­ing con­sumers.

Now more than ever these pub­lish­ers must get to know their au­di­ence in­side and out. It’s not enough to know what, when and how they con­sume con­tent, but what they do when they’re not read­ing. Hob­bies, in­ter­ests, pas­sions, travel and shop­ping habits are just a few of the traits pub­lish­ers need to un­der­stand up close and per­sonal in or­der to give their au­di­ence what they want – an en­gag­ing (sticky) ex­pe­ri­ence worth pay­ing for.

In the past 5 months:

TorStar in­vested $200 mil­lion in Ver­ti­calS­cope - a dig­i­tal me­dia com­pany that op­er­ates hob­by­ist and niche-in­ter­ested web­sites

Busi­ness In­sider launched a new tech­nol­ogy site, Tech In­sider

UK’s best-sell­ing men’s mag­a­zine, Men’s

Health, launched a range of vi­ta­mins

Di­ver­si­fi­ca­tion seems to be catch­ing on! Ac­cord­ing to 6,000 busi­nesses sur­veyed for Adobe/

Econ­sul­tancy’s Dig­i­tal Trends Report, 2015 was the year of cus­tomer ex­pe­ri­ence be­cause it rep­re­sented the big­gest op­por­tu­nity for com­pa­nies to dif­fer­en­ti­ate them­selves.

Well, if 2015 was the year of cus­tomer ex­pe­ri­ence, will 2016 be the year of di­ver­si­fi­ca­tion? Will pub­lish­ers be will­ing to ex­per­i­ment out­side of con­tent?

Only time will tell, but I for one will be fol­low­ing this emerg­ing trend closely to see how it un­folds over the next months. Stay tuned!

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