This year, the Innovation in Media World Report delivers perhaps the most important edition in the book's 10-year history. For its tenth anniversary edition, the report focuses on what's been a decade in coming: Successful, proven media business models.
"Ten years ago, when we first published this report, the industry was in crisis with no clear business model to ensure our survival, never mind our growth," said World Report editor and Innovation Media Consulting president Juan Señor. "Today, through our decades of global consulting and years-long research, we have been able to identify the twelve media business models media companies can use to survive and thrive in the 21st century.
"We focus on business models because they are the sine qua non," said Señor. "Without successful business models, you can have the greatest journalism in the world, but you're not going to be in business for long.
"The difference between ten years ago and today is that we KNOW that that there are media business models that work; there is a clear path to media business success," Señor said.
In addition to focusing on business models and revenue streams, Señor and report author John Wilpers, Innovation director, North America, also take a deep look at media tech, blockchain, and the perennial favourite: offbeat innovations.
In working with media companies around the world, Innovation has found that anyone in media these days needs to adopt at least three of these business models. "No one or even two will sustain a media company these days," said Innovation EMEA director Andrew Rolf, who was part of the Innovation team presenting the book at the DIS conference on March 25 in Berlin. "The mix will be different for every company, and that will be determined by the needs of their audiences and partners or advertisers.
"Some of the models are easier to implement than others, and some are available to only certain types of media companies (think the Philanthropy and Investor models)," Rolf said.
"The answer as to which business model best fits your company can be found by determining the needs of your clients, whether those clients be readers, advertisers, agencies, other media companies (think the IT Provider model), or yourselves (think the Investor model)," he said.
"By adopting business models best suited to meet the needs of your readers and/or clients, you are setting both yourselves and them up for success," he said.
The book illustrates each business model with case studies so readers can see how companies around the world have implemented the models successfully.
Of the 12 business models Innovation outlines in the new report, there are three that every media company can do, whether they're big or small: reader revenue, paid content, and events.
"Reader revenue makes a statement: This is valuable content that you should pay for it," Señor said.
Over the last few years, increasing numbers of media companies have moved to reader revenue models, putting up paywalls for their content — which in turn, is having some eye-popping successes. Take for example, The New Yorker, "where reader revenue now exceeds advertising revenue, 65 per cent to 35 per cent," according to the report.
Paid content is the second revenue stream that works well for all magazine media because it uses innate media company skills and talent. "We are the storytellers and the trend in advertising is to tell their story, not just to deliver in-your-face sales pitches," Señor said.
Events are the third business model that every media company can adopt. Magazine media companies are perfectly positioned to be events purveyors. They have the expertise, content, a loyal audience and relationships with sponsors. Events drive revenue through ticket sales and sponsorships.
The hottest tool magazine media companies ought to look into for 2019 and beyond is the intelligent, flexible paywall. In the case of Swiss publisher Neue Zürcher Zeitung, a personalised paywall based on more than 100 criteria has increased its conversion rate and doubled its reader revenue (as a percentage of total revenue), over the last decade, according to the report.
Media companies need to make sure the niches they've chosen and the content they create pushes their subscriptions and memberships to the top of their audiences' spending budgets, and doesn't get cut when times are tight.
Weird and wonderful, for sure.
Echoing a November 2018 report from the Reuters Institute, Innovation Media Consulting cautions media companies about their pursuit of shiny things. While previous years' reports have introduced media companies to new, interesting, and sometimes crazy media tech tools, this year's report emphasizes practical, functional bets.
That said, there are four areas of media tech that are useful and successful: voice-enabled devices, artificial intelligence, messaging apps, and augmented reality.
Voice is an area that is already being adopted in significant numbers and building habits with audiences. A healthy number of media companies are finding creative ways to impart information through these devices. With smart speaker adoption growing, voice-enabled devices are one of the biggest potential new media market for media. The hard part, Rolf said, is getting listeners to find your "skill" or channel on one of these devices. "The discoverability problem is very real, but the cost of creating the content is not insurmountable," he said. "I think voice has potential more perhaps for news and for cooking, for example, where it clearly it has already proven its value.
You can buy the Innovation in Media World Report here. FIPP members get the digital edition for free and 15 per cent off on the print edition.