The number of media organisations reporting a profit growth of more than 20 per cent in the past financial year is dropping, as emphasised by the World Newsmedia Innovation Study, made available online on Wednesday.
Only 5.8 per cent of respondents said their company's overall profits grew by more than 20 per cent, the lowest number recorded in the last three years.
The study was authored by Martha Stone, chief executive of the World Newsmedia Network, and Dr. François Nel, Journalism Leaders Programme director at the University of Central Lancashire. Now in its seventh year, the annual report surveyed 173 respondents from 50 countries.
Almost a third of those who filled in the 22-question survey were identified as top managers, and other respondents as senior managers.
So how are they tackling the challenges of falling print advertising revenues, and the rapidly changing digital landscape, where news media companies increasingly have to compete with technology companies and fight ad-blockers both on desktop and mobile?
While there is no recipe for success, the study found three different strategic approaches emerging. Nel dubbed them the Guards, the Rangers, and the Pioneers.
- The Guards: These publishers adopt and defend traditional business models and expect 90 per cent or more of their future profits to originate from advertising and content sales. Some 10 per cent of those who responded to the survey were 'Guards'.
- The Rangers: This approach means protecting the existing business model while also exploring alternative sources of income and expecting these to make up around 50 per cent of future revenue. The majority of survey respondents, just under 70 per cent, were 'Rangers'.
- The Pioneers: They expect their company to have to earn more than 50 per cent of their income from alternative sources, to supplement income from advertising and content sales in order to meet their targets. Some 20 per cent of respondents fell into this category.
"The Rangers are likely to be asking themselves how do executive teams straddle the twin challenges of identifying new ancillary opportunities and exploiting current activities without losing focus?
"The Pioneers, who are stepping over the line into new business territory and expect to settle there, are likely to be questioning whether to keep hold of their news media assets at all,” he added.
The World Newsmedia Innovation Study also looked at the investment priorities of media organisations, and found that investing in people was a key focus – and even the only priority for over half of respondents.
Over 62 per cent said they needed to develop journalists' skills, and more than 50 per cent highlighted the need to to develop the skills of their sales staff.
Promoting collaboration within the organisation was also a priority for 42.8 per cent of respondents, while social, mobile, data and payment were also flagged up as areas of importance.
The study pointed out that many of these concerns have data at their core, whether it's about improving skills in the newsroom to promote data reporting, or using it for audience development and analytics.
"This year, for the first time, short-term priorities for investment are shifting from technology to people," the study concluded.
The World Newsmedia Innovation Study was initially published in the Global Digital Media Trendbook in December. It was made available online for free on 27 January, and you can download it here.
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