June 14, 2021

Can the ongoing transformation of publishing businesses fuel a healthy, paid-for news ecosystem?

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By Giles Crosse From Reuters Community

Recently, Google News Initiative (GNI) launched a new program, seeking to understand the markets and payment models which might deliver a sustainable news industry for the future. In Part One of this series, we ask: how is the sense of urgency transforming today’s media industry shaking up monetization?

In March, FTI Consulting announced a new digital subscriptions lab, in partnership with GNI and the Local Media Association (LMA). The lab aims to develop a sustainable and thriving business model for the newspaper industry.

Details of the publishers from a cross-section of small, medium and large newspapers across North and South America, which will participate in the six month program, are now also available.

What’s the lab all about?

“The subscription lab originates from a broader sense of urgency across the local media industry that continued business transformation, namely through revenue diversification and new digital revenue growth, is imperative to fueling a healthy news ecosystem,” explains Jed Williams, chief strategy officer, LMA.

“The decline of the legacy print channel continues to be significant,” he argues. “That gap will not be filled by advertising alone. Increasingly, local publishers see strong direct relationships with consumers, relationships that can be directly monetized, as critical to their long-term path to sustainability.”

He elaborates, saying many publishers have already launched digital subscriptions models; many are aggressively investing and testing, with ambitious growth goals. “The lab was created to accelerate publishers’ learnings and progress through unique resource support and close collaboration, that enable local media to move faster and smarter, together.”

What about Google’s role?

Ben Monnie, director of global partnerships solutions, Google News & Publishing, told Reuters that subscriptions are a relatively new area for them, on which Google started focusing after publishers impressed the need for their support in what was becoming an important revenue stream.

“That’s when we started work on Subscribe with Google alongside publishers from around the world, to address what Jon Slade, chief commercial officer of the Financial Times, called the ‘core issues that are essential to a successful subscription business: easy sign-up, frictionless payment, and improved discovery for subscribers,’” he says.

The subscription business is a complicated one and there is no one size fits all. Perhaps the need is particularly acute for local publishers which are operating with smaller budgets, less resources and less technical support. The subs lab aims to bridge some of those gaps and at the end share the lessons learned with the wider industry and ecosystem.”

How did the selection process work?

Ben explains that both Google and the LMA selected publishers that have already launched digital subscriptions businesses, and are beginning to see subscriptions as a pathway to financial sustainability.

“A couple of years ago, the digital subscriptions opportunity was a question mark for these publishers. But now, many are seeing the full potential of subscriptions, and are asking for help pivoting their businesses to fully tap that opportunity.”

There’s a stone cold rationale behind the urgency of today’s subscription shift. “Some applicants to the lab shared triple-digit growth rates in their digital subscriptions revenue over the last two years. Many reported setting the aggressive target of doubling that revenue again over the next two to three years.”

Jed Williams told Reuters it is important to Google and the LMA that the participating cohort represents a diverse mix of publishers, to help test the efficacy of digital subscriptions models across the ecosystem.

“This includes both larger and smaller daily newspapers (not just metros), public, private and family-owned media companies, and geographically diverse titles across the US, Canada and Puerto Rico.

What they must all share is a strong commitment to digital subscriptions and reader revenue as a strategic pillar of their business transformation,” he comments.

“This means having an existing subscriptions business in place, with well-defined goals for expansion. Executive-level sponsorship is critical, as is marshalling cross-functional team resources capable of enterprising work over the life of the program.”

Urgent sense of change

The very emergence of the lab stands as testament to the rapid evolution occurring across publishing today, driven at its core by the need to help journalism pay its own way.

It certainly appears that subscriptions, if they can indeed offer triple-digit revenue growth, must be at least a sizeable part of any solution.

In Part Two of our investigation, Reuters will examine how smaller and larger publishers are tackling the transition to digital differently, and how this impacts on their digital subscriptions strategies.

Publishers chosen for the GNI lab: El Nuevo Día, The Baltimore Sun, The Buffalo News, The Columbus Dispatch, The Houston Chronicle, The Idaho Press, The Portland Press Herald, The Post and Courier, The Southeast Missourian and The Toronto Star

SOURCE: https://www.reuterscommunity.com/topics/monetization/can-the-ongoing-transformation-of-publishing-businesses-fuel-a-healthy-paid-for-news-ecosystem/?utm_source=Eloqua&utm_medium=email&utm_campaign=Media%20-%202019%2007%2031%20-%20Reuters%20Community%20Newsletter&utm_content=Media%20-%202019%2007%2031%20-%20Non%20Connect%20-%20Reuters%20Community%20Newsletter

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