For many publishing houses, the shift in customer behavior and global competition has increased the need for a (digital) transformation of their business models. We explain why a change is needed and what the main reasons are.
1. Everyone is creating content #
Traditional print always had to compete with other media formats such as radio, television, etc. However, with the evolution of the internet – from social media to streaming, to the 24/7 access of the smartphone or ChatGPT – it’s not just other publishing businesses that are competing with each other for their users’ attention. It’s the entire internet.
Even more so, whereas it used to be difficult and highly localized to share non-professional written content, it’s now easier than ever to share opinions, information and entertainment in all media formats throughout the web. This means, that publishing businesses not only compete with other industries but also with every single person who shares their content (paid or for free) on the internet.
2. Print is not dead – but is it enough? #
“Paper is not the fastest way to get your news anymore. In the digital age, you can get your news anytime via your smartphone.”
Christoph Hauschild, Director Media at Frisbii
However, this also means a huge change in how to generate revenue. Although publishers might be the inventors of the subscription model, subscriptions themselves rarely financed the whole operation. Instead, the ads that were printed inside the newspapers and magazines provided the biggest chunk of money.
With the move towards digital media, ads are no longer a viable way to finance an entire paper or magazine. The content itself and the subscription to it, has to be the main revenue driver.
Most publishing companies still see ads as an additional mainstay, though. A survey from Reuters asked publishers about the most important revenue streams. Although subscriptions and memberships topped the poll with 77%, they were followed right after by display ads and sponsorships (69%) and native ads (sponsored content, 59%).
(Source: Reuters, 2024)
3. The paywall problem #
Whereas streaming services are quite ahead of the curve when it comes to personalization and a digital portfolio, many publishing companies are still at the early stages of their transformation. Sure, most offer a digital subscription but there are still many “growing pains” that harm customer trust.
One of the biggest challenges for publishers lies with the history of the internet. Video and music never were freely available in the early days of the internet (not least due to the loading limits). However, the first things many newspapers and magazines did was offer their entire catalog for free, thinking that online ads would drive enough business.
Since that didn’t work out in the long term, the change from everything-for-free to paid content has been a struggle since it is a lot harder to convince people to pay for something that used to be free.
The Reuters survey asked readers from Germany, Austria and Switzerland how many paid for their news. Overall, only 15% pay for their daily news with 62% outright stating that they were not willing to pay for their news (Switzerland being a bit more accepting of news subscriptions and Germany being very opposed to it).
Publishers made the transition from free content to paywalls even worse by committing two cardinal sins of subscription business models (that used to work well with print subscriptions):
- They did not communicate with their customers
- They made it easy to subscribe but hard to pause or cancel.
(Additionally, publishers often struggle to up- or cross-sell their digital subscriptions to their print-subscribers, especially those at risk of churn, who could be convinced to subscribe for a lower price and to access more online content (24/7, archives, digital games, etc.).
Studies and revenue insights have shown that customer acceptance and conversions are directly influenced by how easy it is to cancel or pause a subscription. Knowing that the way out will not be blocked or turned into an odyssey automatically results in higher subscription rates. The same goes for full transparency of the subscription, including product updates and potential pricing changes.
According to a customer survey conducted by Toolkits and National Research Group, 67% of (US-) consumers would be more likely to subscribe to digital publications if the cancel process was easier (Source: via mediaoperator.com).
4. Journalism has an image crisis #
A few decades ago, most households had one newspaper they swore by and that had earned its reputation. Journalism, in general, had the image of truth, information and entertainment.
But in the age of the internet, everyone can create and share content and information almost everywhere. And some of it is incredibly entertaining, informative and educational. Just because content comes from a private person doesn’t mean that it’s less valuable than from a professional journalist.
“It’s the publishers’ responsibility to gain trust and compete with people who self-publish or micro-blog. It’s not enough to rely on your past or what you think people should think of journalism. You need to establish yourself as the place to find expert knowledge, innovation, entertainment and communities.”
5. Community building is crucial to increase loyalty & engagement #
To finance your publishing business through your customers and not your ads requires a new look at how you want to draw in your audience. The more your customers interact and engage with your content, the more likely they are to subscribe and stay subscribed.
Most successful companies have found ways to expand their product portfolio and/or build a strong community that comes together due to their shared interests. Whether through events, (moderated) comment sections or niche content to reach hobbyists, fan groups and other audiences – our connectivity allows for many different ways to build and engage communities.
Conclusion #
The publishing industry once was highly exclusive. Printers were expensive, and everything had to be financed first before it could make revenue.
The internet has changed this approach. Yes, being up-to-date technologically still is the best way to adapt business models. And yes, monetary investments can help with marketing resources and polishing the end-product.
But a lot of things have changed. Publishers need market experts to freshen up their business models and adapt them to the modern reader behavior. Authors need incentives to join a magazine and not publish independently (or as a group).
The entry barriers to publish are much lower, no one needs an industrial printer to publish.
Modern publishing is not about legacy and means anymore. It’s about providing something unique, ubiquitous and engaging to act as a constant, trusted source of entertainment, information and education.
Frisbii Media is a subscription management platform for publishers that helps you digitalize your business and explore new revenue streams.
