So what should publishers do?
Obviously based on the above list, which is in no way complete, there are many different sources of funding available to media. And although government subsidies seem to be high on everyone’s wish list and should not be dismissed, government should never be the primary source of revenue for publishers. They should not seek it as the primary source, or even as a majority source. Instead, publishers need to look beyond government handouts and start having a hand in raising money for themselves beyond subscriptions, advertising and memberships.
Some may submit that if you’re open to alternative forms of funding, you will be expected to produce content that is guided by those third parties. They’ll suggest that your editorial integrity will be put at risk by accepting their money. I disagree. If you have diversified funding from several sources (the more non-partisan the better), no one source will be able to interfere with your journalistic integrity.
For hundreds of years, publishers have relied on readers and advertisers to fund their business. It worked in print, but digital created a perfect storm which defined new rules of engagement where: • The free flow of content quickly led to its commoditization
• Advertising space scarcity which powered print revenues was supplanted by unlimited, low-priced digital inventory
• Changes to consumer behaviors in terms of how they discover, consume, share and monetize (or not) editorial and advertising content was contrary to everything publishers came to expect from readers
Digital has created a whole new ballgame that requires thinking and playing outside the printer’s box…
1. Be open to alternative funding resources
Identify which funding sources are more appropriate for your content and create a business plan for each source which clearly states the ROI for the funder and their role in your success.
2. Protect your editorial integrity at all costs
Choose funding sources that align with your business goals; walk away from those that don’t. And maximize the number of funding sources so you can minimize any threat to your journalistic integrity.
3. Be accountable
Think of yourself as a publicly-listed company with your audience as shareholders – shareholders to whom you must be accountable. After all, readers fund the expansion of your business and your day-to-day operations. Even nonsubscribing readers are effectively shareholders; their attention to your editorial and advertising content costs them in mobile data charges and ends up generating advertising revenue for you. You have a fiduciary responsibility to all your funding sources which includes your readers and your advertisers.
One of the world’s most influential and iconoclastic business thinkers, Gary Hamel once said, “Large organizations don’t worship shareholders or customers, they worship the past. If it were otherwise, it wouldn’t take a crisis to set a company on a new path.”
Publishing has been in a crisis since 2000. It’s time for us to carve new paths to profits by diversifying not only our business, but our funding sources as well.