The Domination Of The Classic Publishing Era

The Domination Of The Classic Publishing Era:

My father was a journalist. Growing up, I remember how excited I would get when visiting the printing house of the newspaper he worked for. I loved everything about the large, industrial printers — the noise they made, their fading bluish color and especially the smell of freshly printed papers.

That romantic era ended with the dawn of the Internet. The web offered a new, digital home for content and the media business was changed forever. While this change was significant, publishers still got to host their content in their own environments. Now that this, too, is changing, we find ourselves at another, arguably more important, milestone in the life of publishing as we know it.

The move to the digital era forced publishers to not only adjust the way they presented and distributed their content, but also the way they monetized it. The Internet introduced the free economy, and publishers had to heavily rely on advertising as their dominant, if not only, revenue stream. This new, technological medium brought the promise of better ad targeting, measurement and pricing models. However, it also introduced challenges; the more recent and obvious ones include ad blocking, “reader” modes and ad injection practices that prevent publishers from monetizing some of their valuable inventory.

Technology is also “at fault” with marketers moving from buying real estate to buying audiences and massively adopting the Real-Time Bidding (RTB) buying model, which enables them to cherry-pick inventory from various pools, on an impression basis. These changes are perceived by many publishers as harmful for their business. Nevertheless, as important as these trends may be, I believe the main effect on the future of publishing comes from yet another trend: the shift of content consumption to mobile.

In the U.S., users have been consuming the majority of their content on mobile devices for more than a year now. Large publishers are now seeing the bulk of their inventory coming from mobile, and they are not able to monetize it as well as they do their desktop inventory. Moreover, most of this inventory is coming from mobile web. This is not great news in a world where users spend 86 percent of their time on mobile in in-app environments, and where mobile web rates are cheaper than in-app ones. As if that wasn’t enough, the sheer volume of available information led to the rise of personalized content aggregators.

We are on the brink of a major change, perhaps the most important one in the age of modern publishing.

Think about the last time you read an article on your mobile device. Chances are, you discovered and accessed that article through your Facebook news feed rather than through the specific publisher’s own app. Aggregators such as Flipboard, Zite and Pulse (and the new Apple News app), social networks such as Facebook and Twitter and now communications apps such as Snapchat, are the new gateways through which users access content on their mobile devices.

Aggregators are doing more than helping users discover new content — they actually host the content in their own environments and present it in a “reader” mode, getting rid of everything but the text (including ads). With the recent release of Instant Articles, Facebook plans to shift its role from a content referrer to a content host, potentially the largest one around.

Facebook’s offer to publishers is appealing. The current content consumption experience on Facebook is nothing short of awful, with 7-8 seconds of download time, oversized mobile web interstitials and many distractions around the content itself. This obviously hurts the brand equity of the publisher.

However, with Instant Articles, Facebook now offers publishers the opportunity to host their content in its own environment in order to create a much smoother, less disruptive and more aesthetic content experience for the users.

Apple, also, has not been idle on that front. The new iOS 9, coming this September, includes both a “content (read: ad) blocker” and a brand new Flipboard-killer curated News app. The combination of these two releases is part of a strong strategic effort to capture a share of the fragmented premium mobile web (and arguably in-app) ad market. Premium publishers, who will lose some mobile web inventory as a result of this change, are incentivized to work with Apple to create their own hub in the News app.

In exchange for the enhanced discoverability and better user experience, publishers can sell all the ads themselves and keep 100 percent of the revenue (at least according to official statements). Facebook (via FAN) and Apple (via iAd) will help sell all the unsold inventory, keeping 30 percent of the revenue. Such revenue-share deals can actually be beneficial for the publisher. Other than cutting the publisher’s direct sales costs, Apple and Facebook can leverage their first-party user data and ability to guarantee user exposure to bump up the total price for the ads.

Finally, communications apps such as Snapchat that are viewed by many as the new social environments of the (near) future, are already creating content channels that are designed to host content and control its monetization. If you have any doubt about the latter, just look at where Western millennials and the good people of South East Asia spend a large portion of their time on mobile.

As some news publications admit that over half of their traffic comes from Facebook, it seems that publishers are trapped and that their dependency on external gateways is increasing. Because of their massive reach, social gateways such as Facebook act as powerful, indispensable discovery engines for publishers. As such, they also control the algorithm that determines the order, or even the existence of, publishers’ content in user feeds.

In addition, Facebook enables publishers to leverage its powerful capabilities around mobile targeting, viewability, addressability and anti-fraud measures to boost the value of their otherwise lost mobile web inventory. The fact that the majority of today’s premium publishers’ inventory is mobile web inventory makes Facebook and other aggregators a force that cannot be ignored.

The move to the digital era forced publishers to not only adjust the way they presented and distributed their content, but also the way they monetized it.

Some publishers tried to react to this trend by unbundling their experiences into single-purpose apps, also known as “app constellations.” Unfortunately, the reality is that app constellations only work for the tech giants that already had a strong main app that they used to heavily cross-promote the other apps of the constellation. Many legacy publishers, such as The New York Times, tried this unbundling strategy and were unsuccessful — mainly because the unbundled apps did not serve a different need, and often cannibalized instead of complemented the main app.

Like in every other disrupted industry, publishers should be wise to embrace the trend rather than fight it. One way to do so is by posting content teasers on social media channels in order to attract users to consume the full story on the publishers’ own hubs. This way, social channels are leveraged as new content discovery engines, but the publishers still get to host, control and monetize the content on their hubs. Publishers can also redesign their mobile web environments in a way that will both improve aesthetics and reduce load times.

However, many of the world’s largest publishers are fully embracing this trend, experimentally, albeit with a measured fraction of the content. The New York Times, The Guardian, The Atlantic (Facebook), Conde Nast, ESPN and Hearst (Apple News) have already partnered with the giants, and are ready to scale their output on these hubs. Many of the companies forming the new generation of publishers, such as Vox, are taking it a step further and are already creating content especially for these external hubs. Some are even focusing on it.

We are on the brink of a major change; perhaps the most important one in the age of modern publishing. Publishers that don’t embrace or at least adjust to this new order may not survive. Many may be forced to give up hosting a significant part of their content, if not all of it. The evolution of publishers not hosting their own content could mean they will evolve into content agencies.

Eventually, the new hosts could even meddle with the content, create algorithms that will automate the role of an editor in determining what’s news and what’s not and even generate the content themselves (or by using crowdsourcing technologies). As my father said to me, Zuckerberg’s dream of creating a personalized newspaper could mark the end of the journalism profession as we know it.

 

Source: http://techcrunch.com/2015/09/02/the-dawn-of-the-classic-publishing-era/

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