COVID-19 has accelerated key revenue and operational trends across publishing. The latest mediafutures report details how the pandemic has put shifts in income strategies and production efficiencies on fast forward and looks at how these might play out in the future.
Background:
- The report features responses from more than 330 senior publishing executives from the UK, Europe, Asia Pacific and the US. Report author Jim Bilton said the start of the pandemic was characterised by an ‘initial panic and flurry of activity’.
- This was replaced by a period of dramatic cost-cutting and a drive into digital, subscriptions and virtual events. As the industry’s pandemic response moves into its second year, media companies have adopted a more measured, strategic and planned approach.
- Trends picking up speed include the ongoing move from print to digital; the shift from advertising revenues to reader revenues; from free content to paid content and from ad hoc transactions to ongoing relationships, driving growth in subscriptions and membership.
Shift from advertising
- Advertising currently accounts for 60% of total income among the companies surveyed, but this is expected to drop to 54% by 2022. This represents a marked acceleration of the trend away from ad revenues when compared to the -4% forecast in the previous year’s report.
- B2B publishers are edging away from advertising toward audience revenues relatively faster. The business media sector is expected to drop ad revenue share by 10% points over the next two years. This compares with -4% for news and -3% for consumer media.
- The one growth area in advertising will be in international revenues, growing on average from 29% in 2020 to 34% over the next two years. Again, B2B leads in this trend, with publishers already posting 35% international business compared with 22% in consumer media and just 3% on news.
WFH efficiency
- The forced adoption of Working from Home (WFH) practices had a huge impact on publishers. Savings have been made in office overheads and remote WFH systems have become streamlined and efficient.
- Bilton said last year was about productivity, “squeezing so hard that the pips really did squeak.” This year is more likely to be about efficiency. “Being an efficient company is no longer a “nice to have”. It is a fundamental prerequisite for survival in the modern world of media.”
- There are concerns, however, that something has been lost in the endless stream of virtual meetings. Publishers worry about the impact on innovation and cross-departmental collaboration through the loss of both formal face-to-face meetings and chance meetings in the office environment.
Industry optimism
The mediafutures report is largely optimistic. It describes media companies as ‘getting to grips with the current environment, the majority very successfully’. And although business models are changing rapidly, it says the industry’s key metrics and underlying success factors are the same.
“What is very clear is that individual companies are finding their own specific solutions,” Bilton says. He explains that individual market and brand dynamics can be very different; company’s skills base, culture and tech stacks are varied; and the cash available to sustain and grow businesses are not consistent.
While identifying a more agile approach across publishing, and even increased risk-taking from some businesses, Bilton warns that speed of execution, while a necessity, can pose a danger. “As the old American gunslinger, Wyatt Earp, is once reported to have said….. “Fast is fine, but accuracy is everything.”
