At MX3, we wrote and talked a lot about the rise of niche media, the future of third-party cookies in ads, and the decline of scale in 2023. And did we mention artificial intelligence? 2023 has, after all, been declared “The Year of Generative AI”.
The dictionary publisher Collins named “AI” the most notable word of the year because it “has accelerated at such a fast pace and become the most dominant conversation of 2023”. And at our Mx3 AI event in London, we focused on the rapid and transformative advancements in AI technology and the implications for media.
AI has truly entered our lives. It has shaped how we work, learn, play and pray, made us despair (will it end humanity?) and gave Pope Francis a puffer coat.
Four in five teenagers in the UK use generative AI tools, and about two-thirds of Australian employees say they use generative AI for work. Along with the doom, AI has brought hope: the possibilities seem endless for medical applications, innovation, tasks too dangerous for humans, repetitive and tedious work, and reducing human error.
That is why we kick off our top nine take-aways from 2023 with the blindingly obvious.
1. Publishers and AI
Publishers have been grappling with how to adapt to the inevitable major shift AI will bring and the impact on their business models. On the one hand, publishers – from startups to legacy media – acknowledge the importance of collaboration between traditional media and AI-driven technology to enhance content experiences and satisfy evolving reader preferences. They have used AI and machine learning applications for content personalisation, audience analytics, and improving editorial processes.
Recently, Axel Springer forged a global partnership with OpenAI to reinforce independent journalism in the AI era. The collaboration integrates recent and authoritative content from Axel Springer’s media brands into ChatGPT, offering users valuable insights on various topics. This initiative not only enhances user experiences but also underscores the significance of publishers in shaping OpenAI’s products. Crucially, the partnership extends beyond content enrichment, with ChatGPT providing summaries of Axel Springer’s global news content, including premium articles, and attributing answers to user queries with transparent links to the full articles.
AI translations facilitated content distribution across countries and diverse audiences. French publisher Le Monde, for example, took a significant stride by introducing selected French articles to an English-speaking audience through their website and a bilingual live news app.
But on the other hand, Le Monde chief executive Louis Dreyfus warned AI could spell “the end of our business model”. Dreyfus agreed with executives of The Guardian and Financial Times that publishers should get paid for their news content.
It will be fascinating to see whether publishers like the New York Times, Guardian and Disney stick with their stance of stopping the AI bots from accessing their content or agree to similar deals with OpenAI and Google.
2. The lack of trust in media
The loss of trust in media has been well documented since the release of the Reuters Institute’s findings in its 2022 Digital News Report. This year, the fallout became more visible.
In March, a University of Georgia study found even whistleblowers are losing faith in the institution and may become less inclined to come forward with sensitive information. In March, a Gallup poll found that only 7% of Americans have “a great deal of trust” and confidence in the media. When trust wanes, conspiracy theories increase.
The Israel/Gaza war has sped up the tsunami of false information on social media sparked by the Covid-19 pandemic and the conflict in Ukraine. Video clips and photographs are used out of context on social media, often attributed to the wrong conflict or unrelated event. AI tools are generating deepfakes that are widely disseminated. Propaganda is spread alongside clickbait, conspiracy theories and even scenes from video games. Fact-checkers say they simply can’t keep up, as we wrote in October.
Disinformation about Israel and Hamas has been particularly dangerous, stoking tensions, divisions and hatred in countries across the world.
Meanwhile, the relationship between Elon Musk, owner of the social media platform X once known as Twitter, and mainstream media deteriorated further. Misinformation around the Israel/Gaza war on X spooked advertisers, and the European Union announced a formal investigation into X, accusing it of failing to counter illicit content and disinformation.
News organisations are investing in several strategies to rebuild trust, such as fact-checking, solutions-based journalism, transparency and explainers.
3. Scale’s decline increased
Digital media companies such as BuzzFeed, Vice, Vox Media, Group Nine, and Bustle Digital Group struggled to stay afloat or endured layoffs amid declining market values, failed sales processes, and a volatile advertising market.
This contributed to the digital media industry’s shift away from pursuing scale as a primary strategy, signalling a departure from consolidation efforts aimed at competing with tech giants like Google and Facebook. This was brought about by challenges such as changing consumer behaviour, evolving digital landscapes, and the rise of alternative content distribution channels that seriously disrupted the traditional publishing paradigm.
Instead of focusing solely on scaling up audience size, publishers are exploring alternative strategies such as niche content, targeted offerings, and innovative revenue models. The shift indicates a recognition that sheer scale may not guarantee success. Publishers must adapt to trends and audience preferences to remain relevant and profitable.
4. Subscriptions and bundling
Publishers have been exploring or enhancing subscription-based revenue models to diversify income streams and reduce reliance on advertising.
News publishers, inspired by the success of The New York Times subscription offering, experimented with reader revenue strategies. Even The Daily Mail, a long-term proponent of both scale and the open web, announced at the end of the year that it was to introduce paid-for content options.
2023 was also the year bundling grew up.
Bundling has been around for some time, but this year, it became a prevalent strategy in publishers’ subscriber strategies and many media organisations adopted this approach to attract and retain subscribers.
The concept of bundling involves offering multiple products or services as a package deal, often at a discounted price less than purchasing each item individually. This could include bundling access to digital news content, premium articles, newsletters, and other exclusive features into a single subscription package.
The success of streaming services, which often use bundling models, put publishers on this track in the first place. The New York Times bundle offers subscribers the option to choose a package that can be paired across the core news offering, a cooking app, games and puzzles, Wirecutter reviews, and The Athletic sports content.
Twipe reports this approach has become a major contributor to the company’s revenue growth, particularly as news fatigue leads to a decline in traffic for breaking news coverage. Approximately 38% of New York Times subscribers are bundle subscribers.
For the organisation, the financial benefits of bundling are clear. The average monthly revenue per user from bundle subscribers is 44% higher than for news-only subscribers. Offering a diverse range of products that surrounds and complements the core news service not only increases subscriber value but also enhances retention over longer periods.
Oh, and by the way, the New York Times reached 10 million paid subscribers.
5. A pivot in the pivot to video
The jury is still out on whether the pivot to video, a key trend in the last few years, has been lucrative for media companies.
Within the social space, and especially in short form vertical, video is now the primary mode for communication, entertainment, and marketing. There are good examples of companies making video work for them, such as TheSoul Publishing, but also reports of large companies that have invested heavily in video production teams and equipment and have not yet seen a return on investment.
A solution may be long-form horizontal video, which became vital as publishers started using video content within articles and other written content, enhancing user engagement. Read our full report here.
6. Are we near ‘peak podcast’?
Podcasts and other audio content have continued their astonishing growth. There are as many as 464.7 million podcast listeners globally, predicted to reach 504.9 million by 2024. The podcast industry market size is $23.56 billion.
Publishers have been increasingly incorporating audio elements into their content strategies.
For some companies, the success of their podcast acted as a catalyst for a complete change in business model. The UK’s Tortoise Media started out as a slow news company focusing on long-form written content, but much of its ongoing traffic and engagement is now audio-based.
There has been a discussion about whether we have passed peak podcast, but the appetite for podcasts seems to be growing. As The New Statesman’s Chris Stone told us, there is a need for quality content analysis and commentary that “help people understand the forces shaping the world”.
7. Rumours of advertising’s death greatly exaggerated
There was much talk of the apparent death of display advertising in the media, fuelled ostensibly by the impending demise of third-party cookies. While many commentators suggest it is premature to declare the end of advertising, they predict publishers will need to re-think their ongoing monetisation strategies.
Brian Morrissey of The Rebooting argues that publishers will continue to rebalance their businesses away from a dependence on attracting users to webpages to show them ads.
“That will soon sound incredibly outdated. That doesn’t mean publishers and brands will stop working together, only publishers will focus more on events and activations, as well as unique ad categories that don’t pit them up against tech and retail media platforms that are going to win any fight on who has better first-party data for driving a transaction.”
So, how can media companies make money?
Affiliate advertising continued to be very important for media companies whose content is in any way product-focused. Among them is Future PLC, which attributes its resilient ad revenue to its far-reaching affiliate strategy.
A year after the end of the pandemic, media companies are enthusiastically focusing on events and conferences as a key and growing revenue source.
New revenue may be coming from the tech platforms. Canada and Australia now have legislation that forces tech companies to recompense publishers for the use of content on social and search platforms. European companies are heading down a similar path, while in the US, California is also pushing for a content tax that will reward the creators.
8. It’s all about the niche
If you were a media entrepreneur in 2023, you could do much worse than take inspiration from 2003. That year, the growth of email newsletters and podcasts gave niche media a massive shot in the arm.
Twenty years on, many startups have avoided the open web completely, keeping their content away from the AI bots by sharing it via email or audio channels.
The key ingredient has been the growth of Substack, a platform that enables publishers to connect with their niche audiences and monetises relationships seamlessly. Niche content worth paying for has become a mantra in the publishing world in 2023.
AI has also been presenting opportunities for publishers, which Jacob Donnelly, publisher of the Morning Brew newsletter, outlines.
“We’re going to see a massive explosion in media companies playing around with AI. I think the real opportunity will be integrating chat-like technology into our media experiences. What sort of first-party data could we get or premium subscription could we charge if we let users access the information on our site through a chat interface? I think it’s going to be interesting, but it’s still very early.”
9. Layoffs
The digital media industry faced unprecedented challenges in 2023, marked by mass layoffs and closures. Major outlets like The Washington Post, Vox Media, and BuzzFeed News experienced significant downsizing. Media executives cited economic conditions for these drastic measures.
According to a report by an executive outplacement firm in the US, Challenger, Gray & Christmas, media businesses in the US alone suffered more than 20 300 job cuts in 2023. That’s the highest since 2020.
The year ended with employees looking fearfully at how tmedia companies were embracing AI. A largely AI-driven news programme that has human-style bot presenters called Channel 1 AI might offer a few clues as to how media companies looking to rationalise their teams could save themselves a few more dollars.
- Ashley Norrison and Adri Kotze contributed to this report.
Media Makers Meet – Live
We’d like to see you at our upcoming live events in Spain and Portugal
- Mx3 Barcelona focuses squarely on innovation in media, emphasising creator-led, consumer and B2B media operating in and across media verticals. It takes place from 12-13 March. Click here for more.
- The FIPP World Media Congress, which we produce on license from FIPP, takes place from 4-6 June in Cascais, Portugal. The magazine media world’s flagship global event will be the 46th edition since it first launched in Paris in 1925. Click here for more
