My Advice for Surviving in 2018: Stop Thinking Like a Media Business.
Recognizing the keys to moving a media company forward.
2018 will be a brutal year for media companies because a lot of debts are coming due: revenue models are collapsing; audiences are either congregating at the very top or atomizing everywhere else; and underlying business model weaknesses are being exposed as VC funding and conglomerate acquisitions dry up. If media companies want to survive in 2018, they can learn from some of our realizations along our journey from old media stalwart to hybrid digital company.
What’s awaiting traditional media companies this year?
Well, for starters, the slow death of the ad-supported clickbait revenue model. This year will only see more revenue backsliding from all but the biggest media companies—the winner-take-all effect is very real in our industry right now. The VC-funded darlings are hemorrhaging cash and slashing jobs, but that’s hardly an industry-wide fait accompli. At IBD, we tested three things that worked well, which many media companies can adopt: high-touch customer services, a niche focus, and agile adaptation to larger market forces.
Innovation drives new users to media outlets, but high-touch services will keep them there.
As consumers adapt to the changing media landscape, companies hoping to court them have to do likewise. With fundamental shifts like shuttering print publications in favor of digital access, it’s important to bring longtime customers along for the ride by letting them know you’re staying true to your core mission while upgrading the way in which you go about it. Agility and responsiveness require high-touch customer services—using personal interaction and not just AI or algorithms—in order to increase or maintain retention.
Any media companies that rely heavily on chatbots in 2018 will still find themselves impossibly behind the leading edge tech innovators. Media companies late to the party shouldn’t try to catch up, but should instead go in another direction: less robotic and algorithmic, more personal. More blue ocean than red ocean.
A niche focus and unique takes will be the saving grace of small- and medium-sized companies.
Develop your niche and your unique take, and you’ll build an audience that won’t abandon you when your website goes offline for ninety seconds.
While a niche focus counteracts the commodification of news, it doesn’t guarantee steady revenue. Sole dependency on the ad-supported revenue model is on the way out—though it’s also becoming clear that the paid model for news won’t last forever. That being said, it does continue to work especially well for specialized media; we consider our expertise to be in a niche subject, and we found that a paywall model is both profitable and sustainable over the long term.
Legacy media will absorb the worst traits of new media, while new media’s costs will increase as they grow to resemble legacy.
Lately, it seems like reporters at major newspapers are often retweeting instead of researching. On the flip side, new media are trying to grow up and be more like the legacy media, or supplant them altogether. This gets tricky: already faced with declining ad revenue, growing companies now need more money for editors and AI to make sure their content is correct.
Meanwhile, while new and legacy media are fighting each other, and major tech players are taking over by being agile and adaptive.
Ten years ago, when media companies were struggling with how to monetize their online presences, Google and Facebook swooped in and built their own ad platforms that destroyed everything in their paths. These companies were never in “advertising,” but when they saw changing market forces, they weren’t threatened—they saw an opportunity and pivoted to a hybrid model that included advertising and exploited network effects. Agility and adaptation are hugely positive constants in an ever-changing market.
IBD always stood apart from the conventional wisdom that stock investing was meant only for the well heeled and the major institutions. Similarly (and ironically), we’re now reaching a wider audience than ever before by getting farther away from what it means to be a traditional “big media” company. That might be the key to succeeding in 2018: Adapt your model and stop thinking like a media business.