This article in Publisher's Weekly highlights an issue most people don't want to talk about: The online revenue model is considerably different from the print model we've all come to know and love. The Time, Inc. example shows that "while a subscriber to a print publication generates about $118 for Time annually, online users generate only $5." So Time loses about 96% of its revenue base going from print to online. How many media operations can survive on 4% of their current revenue levels?
The answer to that question is, of course, "none." But that 96% erosion rate shouldn't be considered a fait accompli. Countless websites have pressured traditional content publishers by providing customers with a more attractive value proposition. That's just a fancy way of saying that a lot of websites are providing content for little to no cost to the consumer. It's no different than when a new Walmart opens up and forces existing retailers to rethink their strategy.
This is far from a hopeless battle though. Existing publishers and other content providers can not only survive this shift, the smart ones will find ways to grow significantly as a result of it. How? I can think of (at least) six tactics that should be employed:
- Look beyond the current touch points you have with your customers and work to establish new ones.
- Take lots of small risks rather than a small number of big risks.
- Start building new income streams with your content, even if the revenue and margin levels aren't what you're accustomed to.
- Spend more time and resources tapping into and leverage existing communities and less time trying to create new ones of your own.
- Do what you do best and outsource the rest.
- Think "video."
I'll expand on each of these in follow-up posts in the coming days.