|
Getting your Trinity Audio player ready...
|
Writing a prediction piece for the media industry in 2021 is difficult. If I were doing something similar in December of 2019 maybe I would have played it safe and said that emerging platforms like TikTok and Twitch would play a role in meeting new audiences where they are, if media companies could remove the glossy veneer. Maybe I would have followed some of the early indicators and suggested we would see more industry-wide consolidation to compete with social platforms. Those assumptions might have been right but for all the wrong reasons. Yes, these trends took shape in 2020, but our industry was forced to undergo 5 years’ worth of evolution in 9 months and we’ve all had a front row seat in the comfort of our own homes.
I don’t think we’ll have a full understanding of how much 2020 did to reshape our industry until we have the chance to soberly reflect on everything gained and lost. That said, I do think three very distinct trends are emerging amongst the most innovative media organizations – focused revenue diversification, social platform independence, and a measured investment in ourselves and the relationship with our audience.
Focused revenue diversification is a matter of necessity for most media organizations that feel the unrelenting downward pressure on ubiquitous display advertising based on 2nd and 3rd party data sources. The industry has known for a very long time that display advertising was not going to save us and 2020 made that abundantly clear.
Revenue diversification can mean a lot of things, but a key component is that the revenue streams must directly align with the value and persona consumers ascribe to that brand. Brands like Barstool know their audience because they are that audience. They know that people do not come for the in-depth sports analysis, they come for the show and the stars/personalities of that show. In this sense, Barstool (the brand) is the movie studio, their staff are the stars and their individual editorial franchises are the movies. Some are blockbusters and some are workhorses but the monetization model is always the same. Sell tickets to the show, sell merchandise so people can identify with other fans of that show and monetize the culture of belonging to what you’ve created (if you’re lucky).
I would argue Barstool is not a far-flung exception to the rule. I think revenue diversification, whether it is commerce (think Wirecutter), experiential (think Pitchfork), creative development (think Vox), tech licensing (think Washington Post), consulting (think Axios) is entirely attainable assuming we are introspective enough to understand the value consumers ascribe to our brand and lean into that with differentiated solutions that draw on what we do best.
There’s a second trend that I expect will continue to gain significant traction over the course of 2021 – the realization that the investments we’ve made in cultivating massive social audiences are simply not paying off. For years we’ve allocated resources to growing our social followings for no other purpose than our own vanity only to realize we don’t own these relationships, we’re renting them. Algorithm shifts, ever-changing monetization policies and vitriolic white noise not only mean we have no control over our own destiny, it means we’re alienating the very people who want to hear from us the most.
Social platforms are built for massive scale. Not your scale, their scale. Quality editorial work is simply kindling for the reactionary fires they stoke with journalists and media brands are often the ones that get burned. Social platforms amplify the voices of the most provocative and incendiary personalities because it generates a reaction, which generates data, that supports their advertising business. This cycle has successfully siphoned off a tremendous amount of revenue from media companies and forced consolidation. Taken at face value, it means we’ve invested huge amounts of time and energy to build value into someone’s business we’re in direct competition with, all while alienating our most loyal fans. The faster we recognize this unsustainable pattern and invest in ourselves, our audiences, and our owned experiences, the better off we’ll be long term.
Betting on yourself as a media company or an individual is a risky proposition but not nearly as risky as leaving your fate in someone else’s hands. In 2020, we saw several high-profile journalists leave their established brands to strike out on their own – a trend I think we’ll continue to see evolve over the course of 2021 and beyond. Glenn Greenwald, Casey Newton, Matthew Yglesias, Brian Morrisey, and a host of others made measured bets on themselves and went directly to their biggest fans to financially support their work, creating a more direct connection with their audience.
Not every writer has the following to do this, but it showcases an emerging trend of what I would call atomic monetization. If the primary value exchange for most media companies is an individual audience member consuming/interacting with a writer’s knowledge, then why do we gatekeep this value by foisting paywalls on people in an effort to monetize at the brand level? To torture the movie analogy from earlier, it’s akin to having to buy tickets to three movies playing at the same time only to see the one movie you’re interested in. The most valuable experience for most fans would be to watch the movie you came to see and then be given the opportunity to ask questions and interact with the stars after the film has ended – an experience real fans would pay a premium for.
If the model sounds familiar it should — it’s the Patreon, OnlyFans, Subtext (Disclosure: I am a co-founder and the current CEO of Subtext), Cameo, Substack model which is directly applicable to media companies on the enterprise level. What if, instead of generating revenue via bundled subscriptions, we could delight readers with a direct and humanizing way of interacting with the individual writer, the brand and the subject matter? The most innovative media companies are beginning to recognize this, which is why growth strategies at places like the New York Times consist of recruiting star talent like Ezra Klein, Ben Smith and Kara Swisher and allowing them to grow their individual subscriber base in a way that is mutually beneficial to that individual, the media brand, and their fans.
2021 will be a fascinating year for reasons far more impactful than the trends listed above but one thing is certain, if media companies invest in themselves and the relationship with their audiences by relying on their most valuable assets (their talent) to build relationships, we can create enduring value that supports our business and outlives any social algorithm.
Mike Donoghue
CEO & Co-Founder, Subtext
Subtext is Digiday’s 2020 Subscription Product of the Year. The platform connects a diverse range of creators with their audience via text. By creating a text chat experience, Subtext hosts have the ability to communicate with their subscribed audiences one-on-one or at scale through a medium that feels like an unfiltered conversation with a friend, independent of the noise of social media. Subtext is the fourth product spinout from Alpha Group, an incubator for new tech and media properties inside Advance Local. Advance Local is a unit of Advance Publications, whose portfolio of companies includes Condé Nast, American City Business Journals, Leaders Group, Stage Entertainment, Turnitin, 1010data, and POP. For more information, visit joinsubtext.com.
