How will the future of publishing look?

I was thinking more about the future of monetising media content, both through current online products and soon-to-be mobile devices. There’s been a lot of talk in the publishing industry recently about specialist and niche titles being forced to look for subscription revenue as they are finding it harder to compete in the retail market with larger consumer magazine titles.

These specialist magazines are forced off the newsstands by agents modeling themselves after FMCG retailers  that maximise return per square metre and charge for prime retail positions. Chasing subscriptions and subscription revenue seems the obvious route to take.

But consumers are chasing content from many sources, increasingly it is free, backed by advertising. They are developing deep and sophisticated relationships with digital devices that deliver information to their fingertips whenever they want it, B2B and consumer – mobile charges will be the major barrier to consumption. What benefit are consumers gaining from magazines, nowadays? This is the question magazine publishers should ask themselves. Portability? Quality of reading format? The nostalgic feel of paper?

I don’t believe it will be long before electronic paper – truly flexible, full colour, electronic paper as being  trialled by Fujitsu and Philips – deployed in a next-generation Kindle-type device, will turn the business models of the publishing market upside down. A flexible, large-format, mobile device that is web-connected, drives down the value of subscriptions as access to quality content moves towards Free.

If the only reason you are gaining revenue from subscriptions is because of the magazine format, then the lifespan of this revenue source is coming to an end. Charging for high-end, quality content is already being challenged: Business Spectator (free) vs Financial Review (subscription).

What content would I pay for? Important timely business information that I don’t want influenced in any way by advertising. And these types of subscription businesses are continuing to perform strongly in the face of free online information. Some examples are legal, accounting, some financial information.

Bookmark and Share

AFR obfuscation strategy

In my post Why the subscription model is hard to lose, I wrote about media companies often having two different brands – one subscription-driven and one advertising-driven – riding off the same content in order to maximise overall revenue without cannibalising existing income streams. In this post I want to look at the specific example of the Australian Financial Review and their cunning obfuscation strategy!

In my post I suggested that the AFR‘s advertising-driven / free brands were the Sydney Morning Herald and The Age. This, from a corporate perspective, is true, however, from the brand level, the AFR also pumps content through to other AFR brands such as technology magazine, MIS. This content is somewhat protected through an “obfuscation” technology that makes it unreadable if it is selected to copy. Part of a hard-core copyright protection strategy to bring maximum traffic to the site for viewing content and advertising, perhaps?

Obfuscation!

Obfuscation!

Sarah Stokley from LifeHacker had this to say:

This is bizarre – often people like to cut and paste to read later, or to email to a friend to tell them about the article, or to quote in their blog. Enter the Deobfusticator – a website created by Lindsay Evans which lets you enter an AFR URL and get a page of readable text in return. Thanks for helping us keep the Fin somewhat user friendly, Lindsay. :)

However, when I checked the comments on Sarah’s post, I noticed that Sean Carmody found the Deobfusticator no longer functioning. I checked, and also found it on the blink. Is the Deobfusticator broken or is Fairfax onto it and changing code.

Is the AFR trialling a free advertising-driven model with the technologists who read MIS? When will the next deobfuscator arise? Is obfuscation necessary?

Why the subscription model is hard to lose

This post was inspired by Sean Carmody’s comment on my last post about subscription versus advertising business models on the web.

His observations initiated an important discussion about businesses in decline and those in their ascendancy. For businesses that are receiving significant cash flow from a declining/stagnant brand, it is difficult to forgo this income to gamble on a completely new approach to revenue. It seems that in the online publishing world the declining model is that of subscription and the model in the ascendancy is that driven by advertising, precisely because of the nature of the net and its multitudes – and the huge forecasts in online advertising growth in coming years. VC companies have had an affair with free content / advertising-driven models for some time now, much to the chagrin of those entrepreneurs with different ideas.

Web 2.0 is largely funded by advertising. Advertising is an AUDIENCE business. So, when Paul Graham is telling his companies to worry about building audience first, that’s actually a good point of view to take. It’s like building a magazine. If you don’t have any readers you won’t get any advertisers.

Robert Scoble – Scobleizer

However, subscription sites will continue into the future. An online media business with a significant subscription base would be loath to write off the resulting revenue to bank on it being replaced by advertising – even if that subscription business is markedly in decline.

The strategic end of those subscription-based media businesses caught in this quandary, such as the Australian Financial Review (under threat from Murdoch’s Dow Jones/Wall Street Journal purchase) and other major B2B organisations I have dealt with, either have related advertising-only businesses (such as the Sydney Morning Herald and The Age) or are investing in free, advertising-only models that service the same market under different brands, to hedge themselves.

As content creators and publishers determine who is best placed to do what over the coming years, we will see businesses managing the subscription and advertising models to maximise revenue from their assets.

Follow

Get every new post delivered to your Inbox.