The Media Business Is Mad Business

There’s no business like the news business, but the last five years will surely be remembered as the beginning of the end for this industry so accustomed to constant disruption.

This rollercoaster period arguably started with the birth of mainstream blogging platforms -- with Blogger and Wordpress of particular note -- and social networking sites. In 2007, as users spent more time blogging and creating their own content on social media thanks to a rise in smartphone usage, publishers began to see the pendulum swing as they no longer were primary destinations. Fast forward a few years later and many were lamenting the death of the home page, and in its place, a rising proportion of single-page users. In fact, the change was so drastic that direct entrances to The New York Times’ home page dropped from 160 million monthly users to just 80 million in a scant 3 years.

The trend was industry-wide, and publishers had to evolve both content and marketing strategies to maintain traffic and therefore revenues. At the same time, the shift in platform power gave rise to new publishers -- like BuzzFeed -- who mastered Facebook distribution and took screen time away from legacy players. This traffic is still seen to be disloyal, as users come through side doors, tending to bounce back to the platforms from which they came, without full publisher control. But page-view metrics are page-view metrics, and most media companies experienced an accelerated growth rate in 2013 and 2014 from pure top of the funnel reach and monetizable, single-page inventory.

And then -- disaster. 2015 saw the great unraveling as social referral growth rate stopped, and then decayed for the most reliant publishers. This quickly halved headline metrics that kept companies afloat, and the biggest losers were those whose strategies failed to evolve fast enough to stop the bleeding. Today, even renowned publishers -- including the BBC, The Daily Mail, Huffington Post and BuzzFeed, have all experienced significant traffic drops (between March and May 2015, Huffington Post lost over 27 million visits).

In January 2016, Guardian News & Media reported a £100m loss in fund value and a 20% cut on expenses. Now it’s cutting 250 jobs, including 100 editorial roles. It came as no surprise that a Citi analyst described the ad market as “clearly challenging.” The adoption of ad blockers skyrocketed with iOS 9 and the big spend remained with the platforms at scale; Facebook reported record revenues of $5.8bn in Q4 2015.

New channels

So what happened? These platforms -- Facebook, Twitter, Instagram and, more recently, Snapchat --  have become so good at providing a native content environment that users remain within their apps instead of clicking out to third-party news sites.

It's clear that in order to survive, media companies have three choices: embrace the social trends and monetise cross-platform, fight the system (subscriptions, adblock-blockers) or build a better product to excite and retain users.

We recognised that becoming overly dependent on social distribution would result in the current landslide in engagement that most other publishers are now waking up to. To adapt, we transitioned from being a top-down publisher to a full-blown community platform while maintaining editorial presence to maintain quality discussions. Becoming a “platisher” allowed us to fight the trend and actually increase direct traffic and on-site engagement without compromising our trusted voice as a publisher.

Today, over 99% of our content and 50% of page views are of user generated content. Direct entrances to the site have tripled and our app users now each load over 300 pages each per month. Social media still plays a vital role in providing web traffic and community awareness, but it provides more value in conversions to app downloads.

While simultaneously enjoying the benefits of platforms and publishers sounds promising, "platishers" work best in niche communities. Unless users are passionate enough about the vertical, they may not make an effort to download an app or visit a homepage directly. Users now know that if a piece of content is worthy, it will eventually appear in their social feeds.

Tech wins, not publishers

With Facebook Instant Articles, Google AMP and Apple News all launching this quarter, written content is no longer exclusive to publishers’ Web sites. This poses the question: Is editorial voice alone enough to maintain one’s identity in an increasingly social-only world?  While native formats may temporarily increase content views and top of the funnel figures, the real winners here are the tech platforms themselves.

While legacy players will desperately restructure their businesses to hit quarterly goals, technology-driven companies will continue to think in years and decades. Niche ‘platishers’ will capture communities, who are underserved by their social feeds, and attract media buyers who are looking to associate their clients with trusted outlets and vibrant discussions.

There’s a clear conclusion here; the disruption we’ve seen in the news industry over the last five years is set to continue. Until we see the next content or distribution disruption, technology giants will continue to dominate and control mainstream media, with only a select few social publishers - like Buzzfeed - able to take advantage of the scale these platforms offer.

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