Old media are struggling to stay afloat; consumers skip advertising on television, newspapers are mostly read online and magazines see their readers vanish. Their businessmodel is largely based on an income from advertising, but since nobody is seeing these advertisements anymore, advertisers don’t want to pay the same as before.
Media agencies are trying all kinds of tricks to sell offline advertisement, but they will have a hard time defending the immense cost that comes with it. While billboards and radio-ads are still consumed a lot, the other offline channels are dying.
But is there no businessmodel for these old media to stay alive?
What can we learn from iTunes?
iTunes has shown us that people are willing to pay for music, which was at that moment thought to be impossible. At a time when a lot of music was downloadable for free, Apple came up with a solution that was both low-cost and with great user-experience.
Although iTunes has a solution for TV-shows and movies, it’s not being picked up by the audience and we see illegal initiatives as PopcornTime growing in success.
The simple reason is that people consume music over and over again, while a movie or TV-show is mostly only watched once. At this point the cost that comes with it is too high for people to pay for a movie if there is a user-friendly free alternative (even if it’s illegal).
A solution in which the cost decreases over a period of time is a better solution. Offering new and premium content (behind the screen) at a higher cost and older content at a nearly no-cost rate, will fit better in the consumption behavior of users.
What can we learn from Netflix?
Although the approach of Netflix is completely different they are successful too. Offering unlimited access to high-quality content for a fixed price is a model most consumers are willing to pay for.
But the disadvantage of Netflix is that it all depends of the content they offer. In Belgium the offer in series is interesting, but there is a shortage of good movies. So the success all depends on what they have in store. Offering premium content and Netflix-only content makes up for the lack of good movies, for now.
There are ways to overcome this lack of good content in certain countries, but they are again not legal. And since the user-experience of Netflix is not superb, it’ll be an ongoing fight to make this solution successful.
The success is in a combination of the above. An offer of premium content for an additional price on top of a giant database of content for which you pay a monthly fee.
What about TV-channels?
TV-channels can only survive on authentic content or if they have a targeted audience. Local news, local shows, … are still a reason to watch TV. But the consumer should be able to consume it everywhere, not only on the television. Local series will have their target audience, but like with movies, they have to be part of an online offering like Netflix.
This means that on television there is hardly any space for traditional advertising. Sponsorship deals, product placement, … will be the only way for TV-channel to fight against the other players.
Targetted channels or even branded channels (cooking channel, sports channel, …) will also have a future. But since advertising can be done way more targeted these will still find funding. These will have to be included in a complete media-mix with a website, social media, …
So what about newspapers and magazines?
All news can be found online, and most of the time for free. So what is the reason to exist for newspapers? A Dutch initiative called Blendle proves that there is a solution to keep the journalists on board.
The consumer pays per article he or she reads. Basic news articles are offered for free, but depending on the length of the article, the in-depth content is behind a pay-as-you-consume wall. The basic news articles are at this moment the teaser for the complete article. The consumer doesn’t pay for the whole newspaper or for a subscription, they pay per article.
At this moment it’s still new and there is still a risk that journalists only write what is consumed the most. But it’s a first step towards a sustainable model to keep newspapers alive. I see no offline future for newspapers.
Initiatives like VICE offer good added-value content, behind the screens news, great inside stories (both in written and video). They succeed in keeping it free for now (while they have other commercial activities), but this is the type of content consumers are willing to pay for.
Magazines can use the same method as newspapers. Although very well targeted magazines might still have an offline future or a businessmodel in which consumers buy a complete magazine.
The success is in the mix.
- A news channel that has it’s own news website and it’s own articles-database
- A cooking channel with a YouTube channel, a tablet magazine, a blog, a discussion forum, …
- A brand that has experience in DIY with an own YouTube-channel, a DIY-magazine, an online help-center, …
Brands will more and more become publishers and traditional publishers have to come up with ways to serve their premium content to the end-user (and getting paid for it).