Shifting sustainability: How media organizations can secure revenue in the er...
Shifting sustainability: How media organizations can secure revenue in the era of viral news
At this point, there is no doubt that the media landscape has experienced a radical shift. The era of digitalization has introduced new methods for consuming media and new platforms to transmit media, ultimately creating new consumer habits. Radio and print media are gasping their respective last breaths, as recently seen by the mass layoffs from the United States’ largest radio conglomerate iHeart Radio. At the same time, traditional journalism struggles to develop a sustainable business model in a world of 24/7 media consumers.
What this tells us is that influence is no longer reserved for the major networks; individuals and organizations now can develop their digital platforms and increase their sphere of influence without having to pay tribute to the old-fashioned gatekeepers of media and advertisement. For media organizations, this means that the old methods for generating financial sustainability have expired. In this article, we will examine some of the factors that have contributed to the current media landscape, and solutions for navigating media revenue for the coming decade.
How did we get here?
The advent of social media has had an unpredictable effect on how individuals, and even whole societies, interact online. Platforms like Facebook, Instagram, and Twitter, which began with modest ambitions, have grown into cultural monoliths, functioning as the primary conduits for how individuals receive and discern information. Although there have been many social benefits derived from these platforms, including increased interconnectedness, limitless self-expression, and unrestricted brand development, there have been several unforeseen consequences as a result of large scale reliance on social media.
Perhaps most troubling, global politics have become influenced by disinformation campaigns. In the wake of Facebook’s Cambridge Analytica scandal, a study by Freedom House, an independent think tank that researches democracy, human rights, and political freedom, has found that as many as 26 countries experienced digital election interference since 2018. For businesses and media publishers, however, ever-changing algorithms began putting a chokehold on the amount of organic ‘reach’ that brands can have on social media even before the 2016 U.S. Presidential election. Meaning, that the tools that social media organizations have implemented in an attempt to throttle disinformation have been largely unsuccessful. Instead, publishers are receiving the brunt of the algorithm’s blows.
In the early years of social media, an account’s message would be broadcasted to all of its followers, meaning the larger the number of followers, the higher the exposure. A marked change in Facebook mysterious algorithms in mid-2015, however, leveled the playing field, suddenly weighing factors such as engagement, paid advertisement, and the format of social media posts to dock or reward published content performance.
Media organizations perhaps felt this the hardest, suddenly tasked with the job of rerouting entire audiences from social media platforms directly to its website to increase online real estate value with advertisers. For many, this has been a challenge. How can media outlets create enough content to generate a daily user base that spends a measurable amount of time on the website (and potentially click ads), and change the media consumption habits of a mobile audience trained to consume information via social media?
Well, the experiment has been largely unsuccessful. In the United States, where the bulk of media organizations are privately owned, the past decade has witnessed mass layoffs, free-falling profit margins, and in some cases, shuttered doors. For those that have survived, the emphasis on highly viral content to convert scrollers into readers has had the unfortunate consequence of creating a culture of sensationalist journalism and ‘fake news.’
The ramifications? A highly skeptical and distrustful consumer audience.
Reimagining the media business model
For digital media organizations struggling to monetize, the current media landscape may look dire. However, with proper positioning, media organizations can pivot strategies to get out of the content rat race and ensure greater sustainability. Organizations may choose to adopt one or several of the following strategies to support its financial goals.
Find a niche
To compete against other media outlets operating within the same market, it’s important to find a niche. For media organizations looking to find their footing in the marketplace, creating a niche within a particular subject or area of interest will help to develop specialized audiences. Taking that one step further, focusing on news or key issues within a specific geographic area can help to create a more dedicated audience. For example, if a media outlet specializes in business news, creating a niche within a particular industry (or a specific city or country) can be beneficial for increasing SEO rankings and cultivating more engaged audiences. A website that ranks high for SEO and has a loyal audience of readers created through direct web traffic can leverage its online real estate to sell digital advertisements.
However, a word of caution. Websites with too much advertising are more likely to have slow performance which could alienate even the most loyal readers. Content that takes too long to load because of digital ads will create high bounce rates, which conversely, will lower the value of a publisher’s digital real estate.
Utilize a subscription model to increase content quality
For media organizations that focus on producing original stories or investigative content, creating a subscription model can be beneficial to ensure that important stories are getting a return on invested labor. In the past, a strong investigative story had the power to shake up the news cycle. Today, if the same story is published at the wrong time, or without the right viral keywords, good work can be left unread.
For media organizations that have a strong reputation for delivering high-quality original content, introducing a subscription model can ensure that loyal readers never miss a story. By offering introductory rates such as free stories, or a discounted rate for the first month or year of subscription can give outlets the opportunity to attract loyal readers that will continue to invest in quality journalism.
An additional benefit of a subscription model is that by increasing the quality and value of the content, organizations can reduce the quantity of content produced daily. The constant need for content has forced many media organizations to sacrifice quality in order to produce many short pieces a day that generate quick hits. Although this model is highly popular, it is not sustainable because it creates a model where journalists write more stories daily, often sacrificing their skills for a short-lived traffic boost. However, high quality and privileged content – especially stories that aren’t attached to a news cycle – can continue to produce valuable web traffic long after they have been published.
Government funding can help support local news
Government funding to support local news organizations is a hotly debated topic. Some nations view public funding for journalism as a necessity for civic information, others as a tool for state-sponsored propaganda. Although the truth oscillates between somewhere between these two extremes, it has become more apparent today that few media organizations can operate independently. The lack of independent journalism causes communities, especially small rural communities, to suffer from a lack of local news.
In early 2020, after five years of intense lobbying, the state of New Jersey secured $2 million in government funding for the Civic News Consortium, a non-profit entity established to disperse funding to local publishers. Similarly, in 2018, Canada established tax credits and incentives valued at $600 million to help the nation’s struggling media industry support labor costs. Although the application of these tax incentives has been criticized in Canada for giving preferential treatment to legacy media outlets instead of independent media, the media ‘bailout’ is an interesting case study for the merits and pitfalls of government funding.
The takeaway: Building a loyal audience is the foundation for sustainable media
For most media organizations, financial sustainability will not be achieved overnight. Before a media organization can become solvent, it needs to ensure that its audience is correctly positioned to support its aims. Eliminating web traffic directed through social media by improving a website’s direct and search traffic is a crucial, but necessary step. Similarly, designing a website that is friendly to mobile users can also help to capture traffic that might otherwise be lost from outdated web design or lack of updates. Additionally, a sound social media and email marketing strategy can also help outlets to leverage their most important stories or advertisement campaigns.
But ultimately, the reputation and quality of a media organization is what will capture a loyal and engaged audience of regular media consumers. Without quality journalism, whole societies and democracies suffer. Although readers have become fickle to viral media, capturing engaged audiences is the foundation for a successful media organization. Only then can an organization apply the methods discussed to successfully secure future financial sustainability.
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