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Digital Revolution: To Open the Window of Opportunity, Rebuild the House

Digital Revolution: To Open the Window of Opportunity, Rebuild the House

September 18, 2014

 

 

The digital revolution has rocked the foundations of the publishing world – the need to restructure for digital is now urgent says Richard Britton, CEO CloudSense.

There’s a common perception that the odds are stacked against traditional media companies and that ‘born digital’ titles have all the advantages.

After all, what online-only news sites and apps lack in heritage they make up for with an absence of baggage from their past. These are designed specifically to be read on mobiles. Compared to their small portions of content made for sharing, old-style news seems difficult to digest. Unhampered by outdated IT systems, they also know that the wheels of business behind their web pages spin freely and quickly in response to changing demands.

Yet, when we recently carried out an extensive survey across the US and UK about the complex issue of monetising this content, the results suggested a glimmer of hope for traditional publishers.

In the UK, a total of 88% of those polled said that they didn’t currently pay for digital media sites and apps providing content such as news, fashion, sports and business, even though 45% said that they had accessed online content that day. At the same time, only 7% said that they were prepared to subscribe to receive this content.

In comparison, over half (54%) of UK respondents had paid for printed media over the past month. This highlights how consumers attach different values to these two delivery methods.

Of course, nobody in their right mind would suggest a return to print only. However, revenue from print advertising is still a mainstay for many titles, even if it is diminishing. This gives publishers a base for their new products and services.

But, they need to build on this as a matter of urgency, smoothing the transition to digital with cross-media products, rather than continuing to promote siloed sales. The winning formula will be different for each publisher or title – and finding it will need fast iteration, failing and then quickly trying again before they succeed. If this doesn’t happen quickly, readers will go elsewhere to competitors who have already successfully made the shift to digital.

Plus, the transformation needs to go deeper than tweaking content or the deals offered. It will take nothing less than a radical re-build of infrastructure to enable this required agility and allow publishers to bring more innovations to market faster.

Unfortunately, going back to our survey, there were few signs that the situation will improve in the near future, with the behavior of digital natives suggesting that publishers will have to work even harder to monetise their offerings. In the UK, those in the 16 – 24 age group were shown to spend the least of all on purchasing media content with 78% spending less than £1 a week. Across all age groups, 58% currently spend less than £1 a week.

So traditional publishers have a short window in which to act, to rebuild their business and achieve the flexibility that a digital future will demand.