When it comes to digital transformation in the news media industry, there's no need to belabour the backstory (writes Peter Marsh).
It started back in the day when our publishers told us, "We need to get on the web, pronto." This was circa 1995, when people still said "pronto" and some of us actually used the phrase "information highway" to describe this new internet thing.
Of course, in those days there were no toll booths on the information highway. So, we began our transformation journey by posting today's newspaper product for free on tonight's website. Our web pages were fairly static and the stories were mainly republished electronic copies from our print editions.
The next stage - Digital Transformation 2.0 if you will - came when publishers began embracing a digital-first model. Our websites and mobile apps became the primary destinations, rather than the final resting places, for much of our content. Breaking news couldn't wait for the presses to run, so we started publishing these stories online first, often relying on the print edition for deeper analysis, retrospection and featured content.
We erected paywalls to charge readers for access to our online articles, with varying levels of success. Some publishers, like the New York Times, found this model to work so well that today $200M in revenue comes from over 1.5M readers who pay for access to the Times' digital content.
We all know what happened next. Digital gains could not offset print losses. Between fake news and fake views, publishers continued to see epic declines in advertising revenues. Technologies like ad blockers only served to exacerbate the problem, as more and more online readers installed ad blocking software to avoid the annoyance and time-penalties associated with seeing intrusive pop-up ads on their laptops and mobile phones.
Fast-forward to today, where we are ushering in the newest wave of digital transformation, or what we're calling "digital platformation." Around the globe, in a quest to build upon their incredibly valuable content, customer and commerce assets, we are seeing publishers that are actively transforming their businesses into digital platform companies.
Within the news media industry, think of digital platformation as the development of open, collaborative business models that create new and innovative connections between content creators and consumers. These connections are fueled by commercial agreements that help turn the notion of "digital subscriptions" into multi-faceted service offerings that give readers much more value for their dollars than paid access to premium content alone.
Kinsey Wilson, New York Times executive vice president for product and technology, described this platform strategy succinctly in a February 2017 Wired magazine article: "It's a very, very steep uphill battle to simply sell people on the idea of buying one more news story... I believe that the only way you create value is if you're able to bundle various services together."
Digital platformation is all about creating bundles of products and services that make digital subscriptions more valuable. One very recent example comes from the San Diego Union-Tribune in Southern California. In early 2017, The Union-Tribune (U-T) launched a flash briefing service for the Amazon Echo and other Alexa-powered devices. Flash briefings are quick overviews of news updates, breaking stories and other customizable content that Amazon Alexa can read to users. Instead of Alexa's robotic voice, the U-T relies on human editors as speakers for the news content. In addition, the U-T flash briefing service allows for news updates that are longer than the standard 90-second updates, which is much better suited for long-form audio content.
As one five-star reviewer noted on the Amazon website: "What a great way to start the morning! Kudos to the San Diego Union-Tribune for being on the cutting edge to help subscribers find the news in a variety of mediums."
Another subscriber echoed these sentiments: "So glad the U-T did this. What a great way to stay on top of local news with the expertise and quality you can expect from the U-T. Love my news briefs. Keeps me up to date and informed on vital local issues. Thanks U-T!"
Finally, one particular U-T subscriber clearly enjoys the human element behind this service: "Love hearing about what San Diegans care about instead of some national chain. Having a real person telling me the news is great."
The Union-Tribune flash briefings example demonstrates how a legacy media company can create a content platform that extends the notion of a digital subscription to encompass not only print, web and mobile, but also a whole new generation of voice-activated IoT devices.
The always-innovative folks at Schibsted Media in Norway describe their platform model as "a new form of adaptive storytelling." In a recent guest post for WAN-Ifra, Espen Sundve, Schibsted's vice president for product management, explains this approach: "As the creators of content, we can and should capitalize on the competitive advantage we have over players like Facebook. The Facebooks of the world do not produce their content; they focus primarily on how to personalize the filtering of it. Publishers, on the other hand, can start personalizing the very creation of content. Ideally, the stories I read should match my level of insight, interest, and past behavior within every topic, my preferred way of being informed (say, pictures over text), my current context and more."
The Schibsted model, like many other nascent digital platform experiments, relies on artificial intelligence technology to produce customised - and engaging - content experiences that are responsive to user preferences, behaviour, and context. The New York Times is taking a similar approach, also using artificial intelligence. According to the Wired magazine article mentioned above, the Times team developed a Facebook Messenger "chatbot" for its 2016 election coverage. Offered as part of a digital subscription package, the Times' chatbot provided daily updates on the presidential race. Much like the Union-Tribune flash briefing service, the Times chatbot speaks to readers in the voice of an actual political reporter.
In addition to interactive newsbots, the New York Times has formed an entire team - called the Beta Group - dedicated to producing digital platform services that expand and enhance the Times' paid content strategy.
These services include personalised fitness advice, wellness blogs, cooking and crossword apps, customised real estate portals, a Thanksgiving turkey text messaging programme, and virtual reality films. It is hoped that these platform products and services will generate an additional $300M in Times' digital revenues by 2020.
Of course, not all newspaper groups have the internal expertise and technical resources to match those of Schibsted or the New York Times. For many publishers, a move to digital platformation would detract from the core competencies of creating great content and building strong relationships with readers and advertisers.
One industry consultant, Alberto Barreiro, who has worked with media companies like Grupo Prisa in Spain on their evolving digital transformation strategies, goes even further. In a recent WAN-Ifra blog post, Barreiro issued the following caution to publishers looking to take the next steps in digital transformation: "Trying to keep up with the pace of technology innovation by relying on in-house teams becomes increasingly inefficient. The publishing and distribution technology has been productised and is easily available to any new player through a much lower barrier of entry. Owning your own technology is not a differentiation factor anymore. It is, in many cases, a heavy, costly legacy."
Peter Marsh is marketing vice president for Newscycle Solutions. Contact him at email@example.com phone +1 978-590-7400 or @pgm