Media wasteland? How niche, B2B (and Semafor) show the path forward

Has reading the slew of negative news headlines about the state of media plunged you into a doom loop of despair about the industry’s future? The talk of a lack of trust, news avoidance, social and search traffic tanking, and layoffs in the thousands is enough to wear even an arch-optimist down.

Look at some of those headlines (also note the use of highly emotive words).

Layoffs abound

1. The news about the news industry is getting grimmer (The New York Times, 28 January 2024).
2. Mainstream media bloodbath: News outlets slash jobs as business suffers (Axios, 26 January 2024).
3. The media is melting down, and neither billionaires nor journalists seem able to stop it (The Hollywood Reporter, 25 January 2024).

State of media and extinction or near-extinction events:

1. Q&A: Did the media business implode in January? (Poynter, 5 February 2024).
2. Why Messenger failed as a media startup (Forbes, 2 February).
3. The Messenger shuts down after blowing millions on an ill-fated news site (The Washington Post, 31 January 2024).
4. Sports Illustrated’s deaths by a thousand cuts (The Ringer, 19 January 2024).

The friction and fret that come with any hugely transformational wave:

1. The Times sues OpenAI and Microsoft over AI use of copyrighted work (The New York Times, 27 December 2023
2. News publishers see Google’s AI search tool as a traffic-destroying nightmare” (The Wall Street Journal, 14 December 2023).  

There is no doubt that some sections of the media are negotiating highly challenging times. As former Hearst exec Troy Young writes, “Digital media has become a garbage heap of crappy user experience, broken monetisation, gamed discovery, stale formats, and clickbait. Our current conundrum is the logical endpoint.“

When looking under the surface of those headlines, you see commonalities. They are:

• Often (not always) generalist media.
• Mostly (not always) news media.
• Ad-driven. No subs “silver bullet”.
• Dependent on platform-fuelled traffic.
• Insufficiently diversified.

That model should not define how we think about media. In this battle of attrition, there are pockets of resistance, and they’re often niche and in B2B. 

Specificity is currency.

Mass is past. Niche is not

Last year, Lucy Küng, a strategic media advisor, non-executive board Member and author, posted some take-outs on LinkedIn following the newsrewired event in the UK: “We are no longer the mass media; the ‘something for everyone’ era is over, too. The future is about focus and priorities – a difficult shift,” she writes.

Asking her to expand on this, she tells me, “The opportunity is that if you can make them work, niche verticals are an almost perfect model: high margins, high ARPU, high engagement, more and more balanced revenue streams, low costs (these are lean organisations), and zero platform risk. The challenge is to find niches that have not been claimed.”

In 2023, we published two special reports on innovation in specialist media verticals (there is an overview of both here), while the topic of niche media also gained a lot of attention at the FIPP World Media Congress, which we organise and host.

There, A Media Operator’s Jacob Donnelly, formerly of Morning Brew, told us that he believes in the future, “The only way to succeed in the media is through niches. Unless you’re The New York Times, you will not succeed going forward if you don’t have a very clearly defined understanding of who your audience is.” 

B2B offers a great example.

Be more B2B

Now, I do not mean Consumer publishers should suddenly stop and become B2B. However, in contrast to the stark headlines above, I am talking about a sector that is often variously described as “resilient”, “vibrant”, or even “thriving”.

In the past B2B media was sometimes unfairly derided as “dull trade press.” Yet modern B2B is innovative, exciting, valuable, and an excellent market to operate in.

These businesses are:

• User-centric.
• Data-focused.
• Multi-platform.
• Multi-revenue.

They know who they are for and how to focus, prioritise, and make these efforts valuable.

Viewpoints on Consumer v B2B

Colin Morrison CBE is a former journalist and CEO of multiple media companies worldwide. He now publishes Flashes & Flames, a weekly media newsletter. Here is a profile we did on Colin.

“The best [B2B companies] have always understood the importance of building communities,” he told me last week. “This success in cultivating clearly identified professional and special interest communities has enabled many B2B media companies to stay closely connected with their readers/users.” 

“They have, thus, been able not only to retain their target customers but also to diversify their relationships (and revenue) into the whole range of information, events, training and advisory services. There is no substitute for really understanding the needs and wants of your customers in good times and bad.“

Daniel Pitchford is the CEO of Collingwood Advisory. He relayed three overarching themes where leading B2B businesses are focusing:

• Really understanding their audiences, taking first-party data beyond a hygiene factor of data capture and leveraging the value it presents in terms of intelligence.
• Focusing on’ need to know’ rather than’ nice to know’ content. With the advent of AI (and the plethora of media platforms), the bar to gain and retain audience attention has become higher.
• Ad-funded media businesses increasingly seek to move up the maturity curve to become revenue partners for their clients. This means more sophisticated marketing solutions that increase buyer (audience) demand for their clients and create a stickier relationship with more stakeholders/budget holders.

In a recently published report, Collingwood provided this handy model against which to test the maturity of their marketing services. I would bet that few Consumer media brands have progressed far along the model.

As CEO of investment firm Oaklins | DeSilva+Phillips, Reed Phillips has a good vantage point of what is happening across the media sector. He believes B2B is resilient thanks to its diversified revenue model and less reliance on advertising.

“Consumer media continues to be overly dependent on advertising, and their fortunes rise and fall with the fortunes of their advertisers. In contrast, B2B media has always relied on more diverse revenue streams besides advertising, such as events, data, lead generation, and other ways of connecting buyers and sellers.“

News media meets B2B

The news platform Semafor is an example of this. co-founders Justin Smith and Ben Smith, both have impressive media track records, including stints at The Week, The Atlantic, BuzzFeed, Bloomberg and The New York Times. It’s fair to assume they know a thing or two about consumer media. With the duo at the helm, the Semafor team set out to build a “new kind” of news business (which is said to be on course to be profitable in only its second year). 

Colin Morrison analysed Semafor in his Flashes & Flames newsletter of last Friday. It’s a very different business from how BuzzFeed and Vice Media approached the market in the 2010s. Semafor’s model focuses on:

• Quality journalism.
• Global coverage.
• A lean operational model.
• Strong B2B elements.
• Carefully calibrated growth. 

At its core, Semafor operates with the savvy and the processes of a B2B media company, including leveraging events as a critical component of its business model. This approach integrates “live journalism” events as a central offering. It has proven to be impactful and profitable.

At launch, 75% of Semafor’s revenues were from advertising; now, events make up 50%. (You may also want to listen to AdExchanger’s podcast interview with CRO Rachel Oppenheim: “Why Semafor embraces the B2B publisher mindset“).

This strategy has helped Semafor to be less reliant on advertising and avoid the rapid scaling that often leads to bloated costs (and headlines like the ones I highlighted above).While Semafor may have to adapt to differing market realities as it plans to expand worldwide, it provides a good clue of how B2B principles can aid other media. 

Colin’s full article is here if you are already a Flashes & Flames subscriber. If not, you can subscribe to it here.

Tap the passion

Over the years, we have seen publishers chasing a series of ‘magic bullets’ to save their business. This has included programmatic or native advertising, subscriptions or another shiny new trend. I suspect events might now be creeping back onto that particular radar.

However, if there were one central theme to embrace, it is the ownership of direct audience relationships and data. The rest follows that.

The Cambridge Dictionary defines a passion for something as “an extreme interest in or for doing something, such as a hobby, activity, etc.“

That’s a powerful driver.

Niche media taps into the passions around which communities form, whether that is personal, professional or developmental. The more you tap into audience interests, the better your chances of success.

The approach focuses on quality and allows for developing deep relationships (and data) and building a portfolio of products, services and diverse and direct revenue streams (I may have gone a bit OTT [!] with this piece about Direct-to-Consumer strategies, but much of it holds). 

If the days of “be everything for everyone” are over, perhaps we can change that to “be something for someone” and build from there.

Be something for someone

Nowadays, many conversations about the future for publishers cite The New York Times at least once. So I’ll do it too.

As illustrated in the screenshot above, The NYT caters to niche interests such as games, cooking, etc. Nieman Lab (8 November 2023) wrote in depth about the strategy here: “The New York Times hits 10 million subscribers by using non-news products as an on-ramp“.

The Financial Times is another news publisher known for diving into verticals. 

At our Mx3 Barcelona summit in March (more below), Kritasha Gupta and George Montagu will discuss FT’s “mini-brand” strategy to cater for special interests. My colleague Jez Walters spoke to George last week.

In the interview, George lists the ongoing development of news media’s role in people’s lives as an important trend. Instead of simply offering daily updates, news organisations are now offering community events, independent advice on product offerings and tools that help validate the integrity of information.

The same applies to extending their role with advertising clients. Instead of simply offering space on a page, news organisations are increasingly acting more like marketing agencies – helping brands build their strategy and reach their desired audience.

It sounds very B2B to me.

Read Jez’s full interview with George here.

Reports of my death are an exaggeration…

Sounding an optimistic note about growth in The Rebooting last week (Time to Rebuild), media commentator and high-profile flag-bearer for creator-led media, Brian Morrissey quotes an unnamed media CEO who responded to one of his previous newsletters about media’s troubles: 

“Jesus, you are negative, dude. Not all of us are dead or dying!

As Brian writes in “Time to Rebuild”, you cannot “degrowth” your way to success (here’s a report, Strategies for Navigating out of Economic Turmoil, which we did a year ago. A lot of it remains helpful). 

In the end, lean operations are good, as evidenced by Semafor. However, cuts won’t help an iota if the business fundamentals are kaput. That’s the gist of it.

Mx3 Barcelona: B2B and Consumer Media Collide

Our Mx3 Barcelona summit on 12-13 March brings B2B and Consumer media together in the same room to discuss, share, connect and learn from one another. 

On the B2B side, attendees will hear from A Media Operator, Agri Media, B2B Marketing, Future, Industry Dive, Kademy, Landwirtschaftsverlag, Questex, The Wrap, Skift, Splice Media, Wolves Summit, William Reed, and more. 

On the Consumer side, we will feature, among others, Blick (Ringier), Condé Nast, Deutsche Welle, Financial Times, Her Campus Media, Prisma Media, RBA, TheSoul Publishing, The Telegraph, Vox Media, and more. 

Conversations will also feature specialists such as Natasha Christie-Miller, former CEO of Ascential Intelligence and now, among others, Senior Advisor to TED Conferences, Lucy Küng, Reed Phillips and Colin Morrison CBE, all three mentioned in the article above, to name a few.

See our agenda here. Sign up today to join us there.

Reminder: Our discounted Early Bird Offer ends on 14 February.

We still have to add photos and biographies for a few more speakers, but you can see most of them and our speakers here. Sign up today to connect and talk to them in Barcelona.