Media outlets pursue innovative business models amid industry transformation

By Aju Press Posted : June 14, 2024, 08:06 Updated : June 14, 2024, 08:06
Cover of "Innovation in News Media 2024-25"

The World Association of News Publishers (WAN-IFRA) issued its annual report “Innovation in News Media World Report 2024-25" in late May, highlighting major challenges faced by the global news industry. The following is the second in a four-part series summarizing key insights from the report. This second installment focuses on business models. – Ed.

SEOUL, June 14 (AJU PRESS) - In the ever-evolving media landscape, traditional publishing business models are facing immense pressure to adapt and innovate. As advertising revenues decline and consumer habits shift, publishers across the world are actively exploring new strategies and revenue streams to ensure sustainability and future growth.
A new report by the World Association of News Publishers (WAN-IFRA) highlighted diversifying business models of media companies from forging content partnerships with artificial intelligence companies to venturing into sports betting and online education. 

One prominent area of exploration is the monetization of content through partnerships with artificial intelligence companies. Deals between publishers like Axel Springer, The Associated Press, Le Monde and Prisa Media with OpenAI aim to leverage the power of generative AI models like ChatGPT while creating new monetization opportunities.

"Over the coming months, ChatGPT users will be able to interact with relevant news content from these publishers through select summaries with attribution and enhanced links to the original articles," OpenAI stated in a recent blog post. 

However, this approach has sparked debate, with some publishers like The New York Times engaging in legal battles over concerns about the use of their content without consent. As Nick Diakopoulos, a professor at Northwestern University, notes, such deals ensure legal access to essential training materials, an important move as the legal landscape around AI and data use evolves.

Beyond AI partnerships, publishers are actively reevaluating their approach to subscriptions and reader revenue strategies, the report said. Sara Fischer of Axios highlights growing concerns: "A strategy focused mainly on subscriptions requires upfront spending on premium content. That takes time to pay off — and many publishers don't have the cushion for that in the current ad slowdown," Fischer was quoted as saying.

Sir Will Lewis, the new CEO of The Washington Post, echoes this sentiment, predicting that the existing subscription model will eventually decline. "There's very positive evidence of how news can be accessed and paid for in more innovative ways. There are day passes that are successful, there's week passes, there are models like the Guardian where you can make donations. So there's a whole new generation of paying user concepts," he was quoted as saying.

As publishers seek alternatives, membership models and tiered subscription offerings are gaining traction, according to the report. Outlets like Tortoise Media and Gazeta Wyborcza are cultivating dedicated communities through premium memberships, fostering a sense of belonging beyond mere content access. The Ken and The Information exemplify tiered subscription approaches, allowing readers to select plans tailored to their interests and budgets.

"This model caters to a broad audience spectrum, from casual readers to professionals in search of detailed analyses, by offering varied subscription options," the report noted.

The report also highlights models of branded content. “Publishers are increasingly embracing the role of brand storytellers, leveraging their content creation expertise to develop engaging and impactful advertising campaigns for brands,” the report said. 

The phasing out of third-party cookies has also prompted a strategic shift towards leveraging first-party data and direct audience relationships. Publishers like The New York Times, News Corp and South China Morning Post are investing in proprietary data platforms, enabling precise audience segmentation and high-value advertising solutions.

"Instead of chasing elusive scale, publishers must focus on building trust and fostering relationships with their audience," the report said adding this requires offering valuable content, collecting and utilizing first-party data responsibly.

In the e-commerce realm, affiliate marketing presents a compelling opportunity for publishers to capitalize on the boom in online shopping. Publications like The Independent and Future PLC have successfully integrated seamless shopping experiences, with the latter generating close to $1 billion in e-commerce sales in 2020 alone.

Events and brand licensing are also emerging as significant revenue diversification strategies. Semafor, a newcomer to the publishing landscape, generated an impressive 30 percent of its first-year revenue through events. 

"The key challenge now lies in seamlessly blending virtual and in-person elements to create an enriching and valuable experience for attendees," the report said, highlighting the growing trend of hybrid events among publishers.

Meanwhile, established brands like Forbes, Hearst Magazines and Meredith Corporation are capitalizing on their reputations by licensing branded merchandise and consumer products.

"As publishers continue to invest in and refine their data collection and audience segmentation capabilities, direct-to-consumer strategies like brand licensing are poised to become an increasingly competitive landscape," the report predicted.

Educational offerings present another avenue for monetizing expertise. Publications like The Financial Times and The Economist have launched specialized courses and executive education programs, leveraging their journalistic knowledge to cater to specific audience segments.

Amidst these transformative efforts, philanthropic funding is also playing a pivotal role in sustaining journalism worldwide. The Guardian has raised $9 million through its U.S. arm between 2020 and 2021, while organizations like The Salt Lake Tribune have transitioned to non-profit models to accept tax-deductible donations alongside traditional revenue streams.

Furthermore, the rise of sports betting partnerships introduces a complex ethical dimension for sports journalism. While offering new revenue streams, critics argue such deals blur the lines between journalism and advertising, potentially compromising integrity.

Adam Fiske, CEO of Cipher Sports Technology Group, emphasized the importance of finding mutually beneficial partnerships. "Consider models that reward publishers based on user value, not just acquisition," he was quoted as saying.


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