Paywalls, display advertising, sponsored content, and micropayments are just some of the revenue streams publishers have been exploring to fund their reporting.
But research studies are showing that people, especially younger audiences, are willing to pay for content, just not for news. So what can news outlets do, if anything, to change this and what makes people decide to click the 'buy' button?
News organisations have to stand out and differentiate themselves through the quality or format of their reporting, explained Tom Standage, deputy editor and head of digital strategy at The Economist, speaking at the AOP Autumn Conference in London today.
“It used to be possible [for publishers] to get away with not having differentiated content, but that’s not the case anymore. In our case, it’s our global reporting.”
Some argue that it can be easier for outlets like BuzzFeed, Quartz or Vox to experiment in the digital space because they are not held back by a legacy or a veteran print newspaper, but Standage said that The Economist sees print as one of many platforms for journalism.The surveillance-based business model of online advertising is simply annoying a lot of peopleTom Standage, The Economist
“People imagine print and digital as a zero sum game,” he said, “but we see print as just another device and we will continue to give it to people for as long as they want to buy it.”
Standage pointed out that half of its subscribers – most of which come from North America – pay both for print and digital, a bundle available at $160 (£105) per year.
But roughly 25 per cent of new and renewing subscribers are digital only and pay $127 (£83) annually, the same price of a print-only subscription.
"[This is] a good place to be, because it means they are willing to pay us for our digital app as part of the subscription,” Standage told Journalism.co.uk, sharing some insights into the outlet's strategy.
Building a daily "ritual"
The Economist’s Espresso app, which launched in November 2014 and has since been downloaded almost a million times, reaches around 100,000 people on a daily basis and 200,000 each week.
“We wanted to give our existing subscribers a way to interact with The Economist every day and have a kind of ritual in the same way that many of them do with our weekly product,” he said.
The app can be accessed through a subscription for £2.29 per month and gives non-subscribers free access to one story per day. It is designed as a morning briefing that “sets you up for the day” with 150-word articles called ‘chunks’.
And while the stories available through the outlet’s weekly app are the same as in print, articles originally published on Espresso don’t appear on the website.
“We think that you need a different format for content on a smartphone,” said Standage, “and just saying ‘here's a selection of articles that are very long, as a sort of morning briefing product’, doesn't make sense,” he told Journalism.co.uk.
But when it comes to monetising news across these different platforms, Standage doesn’t see display advertising as a “good thing to base your business on”.
Tackling the revenue challenge
“Display advertising is a difficult business to make money in and considering the shift to mobile, programmatic advertising, viewability requirements and ad blocking, it’s only going to get more difficult.
"The surveillance-based business model of online advertising is simply annoying a lot of people.”
In the Digital News Report produced by the Reuters Institute for the Study of Journalism earlier this year, 34 per cent of UK readers surveyed said they regularly used ad-blocking software on desktop and 7 per cent on mobile, compared to 41 per cent and 11 per cent in the US.
Furthermore, Apple recently introduced ad-blocking support on iOS devices with the release of its latest operating system last month.We are the kind of brand where if we say 'look, here's an app, we want you to install it and we want you to consume the content through that app’, we think that our readers will do that and that we have a good shot at earning a place on the home screen of their phonesTom Standage, The Economist
“One of the things I hope will happen now is that we will get innovation in new forms of paid content,” said Standage, pointing to the presence of Piano Media in Europe and Press+ in the US.
He told Journalism.co.uk The Economist is aware of the current trend towards consuming news outside of publishers’ own websites. But the outlet might take a different approach to platforms like Facebook Instant Articles when the moment comes.
“We are the kind of brand where if we say 'look, here's an app, we want you to install it and we want you to consume the content through that app’, we think that our readers will do that, and that we have a good shot at earning a place on the home screen of their phones.”
While this doesn’t mean The Economist is "not going to go into Instant Articles at all when they open it up”, it will not be to make money from advertising revenue, but rather to “raise awareness of our brand”, Standage added.
“With all these new platforms, there’s no right or wrong way to do this and I think each publisher has to decide – is the potential cannibalisation of their other platforms worth the benefit they get?
“There isn’t a ‘one size fits all’ answer,” he said.
Update: The article has been updated to reflect that 25 per cent of The Economist's subscribers are digital-only, not 75 per cent.
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