By Sherwin Chua
In transforming their businesses to avoid being decimated by the twin forces of digital disruption and the COVID-19 pandemic, publishers must cement their distinctive value, develop an intimate understanding of their most valuable audiences, and consider the possibility of a digital-only future.
These key insights, among others, were given by programme leaders George Brock and Grzegorz Piechota to 11 Asian publishers over the first three sessions of the inaugural five-month-long Newsroom and Business Transformation Asia (NBTA) 2020 programme.
Organised by WAN-IFRA and supported by the Facebook Journalism Project, the NBTA programme aims to help Asian news companies implement and accelerate their newsroom transformation projects.
“The power to publish online isn’t simply a different way to distribute journalism. Digital (and COVID-19) disrupts journalism and the business model it relies on. There isn’t likely to be a single business model for news in the future. There will be many experiments and many varieties of stuff that works. So smart publishers will need to transform and diversify to be resilient and look at the widest range of possibilities,” said Brock.
Make distinctive value the foundation of reader avenue
Given how ad spend continues to decline sharply during COVID-19, coupled with an unprecedented spike in demand for news globally, it may be timely for publishers to turn towards establishing a robust reader revenue strategy.
However, a publication’s distinctive value must be the cornerstone of any news organisation’s attempt at business transformation towards reader revenue, said Brock.
He outlined four questions that can help publishers deepen their distinctive value:
- What need does your publication satisfy?
- What visible difference does your publication make, and is that difference marketed prominently?
- Do readers feel your publication benefits them and how is that ascertained?
- What is it your publication does that is unmatched by anyone?
To illustrate his point, Brock drew on the example of three publishers that have successfully developed and monetised their distinctive values—Spanish online newspaper Eldiario.es, UK-based The Times of London, and The New York Times (NYT) in the US.
“All three publishers have different approaches but they asked themselves one critical question and found the answers to it: How do we get people to recognise our distinctive value and pay for it?” said Brock.
For instance, if you are a publisher that has been successful in building trust with your readers during the COVID-19 pandemic, then the question to ask is: Are you now in a position to capitalise on that strength? he added.
Know and cater to your most valuable audiences
The COVID-19 pandemic has brought unprecedented spikes in the demand for news globally. As publishers capitalise on this temporary bump in demand and develop strategies to convert their readers into subscribers, they must not lose focus of their most valuable audiences, said Piechota.
Based on NYT’s Q4 2019 financial report, Piechota estimates that the publisher’s average revenue per user (ARPU, including subscription and advertising) for each print subscriber is about US$1,000, and each digital-only subscriber is US$177.
The ARPU for print and digital subscribers, compared to the 145 million free visitors to their website each month who are worth less than half a dollar each, shows exactly who NYT’s primary customers are, and who the publication should be devoting most of their resources to, said Piechota.
“Publishers who are transforming their companies should maybe approach it with a mindset that it is not just about digital transformation, but also a shift from product-centric thinking to one that is more customer-centric, where the most profitable customers are served better than others,” he added.
Consider the merits of a digital-only future
Publishers should not only devote attention to growing reader revenue, but also reconsider their business models and cost structures when digitally transforming their businesses.
“As news publishers transform their business models and turn towards audiences as their main sources of income, they should not expect these new sources of digital reader revenue to maintain print cost structures of the past. And the print cost structure is one of the main killers of newspaper businesses,” said Piechota.
Using The Boston Globe as an example, Piechota explained that the US-based publisher had developed a four-scenario strategic planning framework that takes into account the possibility of a digital-only future with a digital-only cost structure.
“The Boston Globe figured that if its mission is to deliver quality journalism, then it needs to find a way to maintain only the key functions that support that mission. And they found that they could in fact be more profitable in a digital-only future without being weighed down by the costs of printing and distributing newspapers,” Piechota added.
Newsroom and Business Transformation Asia (NBTA) 2020, organised by WAN-IFRA and supported by the Facebook Journalism Project, is the first training and coaching programme of its kind in Asia that is designed to accelerate transformation in Asian news companies. NBTA’s five-month-long curriculum supports senior editorial and commercial managers in developing an editorial vision, business strategies, integrated product plans and newsroom processes.
Eleven Asian news publishers from six countries are participating in this inaugural programme which began in June 2020. They are: Bangkok Post, Bisnis Indonesia, Kompas Media Nusantara, Lianhe Zaobao, Manila Bulletin, Philippine Daily Inquirer, Sin Chew Media Corporation, The Business Times, The Edge Communications (Malaysia), The Jakarta Post, and United Daily News.
About the author: Sherwin Chua is a doctoral candidate at the University of Gothenburg, Sweden, whose research focuses on media innovation and journalism. He is also a freelance journalist who covers digital transformations occurring in journalism.