2020:
The year publishers regain control of their platforms
2020
will be the year news publishers begin taking control of the platform on which
their news is published.
This means publishers’ owned
and operated platforms will become the main or only place for news publication
at the cost of news distribution on social and distributed platforms such as
Facebook and YouTube. Perhaps more importantly, it means publishers will house
key parts of the tech stack that support the production, publication, and
analysis of news on their own platforms.
This post outlines why news
publishers are beginning to take control of their platforms, what taking
control entails, and how this sets the stage for competition among publishers
in the 2020s.
Why are news publishers
taking back control of their platforms?
The efforts to regain control
of news publishing platforms is the culmination of well-known trends that have
been growing over a number of years. The most important trends are:
The breakdown of the relationship between news publishers and
social media. In the past decade, the promise of reach and clicks enticed news
publishers to build a massive presence on social and distributed media
platforms such as Facebook and YouTube. However, in recent years, news
decreased in prominence in the algorithms controlling social content feeds.
Also, media companies realised social platforms offer reach with minimal
revenue. Both factors caused the relationship between publishers and social
giants to sour.
With no clear outlook for
change, news publishers en masse are now demoting social and distributed media
to marketing channels, focusing instead on their own platforms.
The turn to paid-for journalism. In recent years, most
legacy news publishers changed their revenue model from purely advertising
funded (aka “free”) to hybrid (freemium or metered models) to almost all paid
(hard paywall). This change was fueled by the fact that digital advertising is
a volume game and the realisation that users are willing to pay for digital
news (albeit, as of now, significantly less than newspaper buyers were).
As a consequence, news
publishers are seeking to build deeper relationships with paying subscribers,
which is best done on a platform allowing publishers to own the customer
relationship and control the experience of the news content.
Growing user expectations. The stars of digital media are now widely
used players such as Netflix, Hulu, Spotify, and Apple Music. These offerings
focus on entertainment content and, at most, compete indirectly with news
publishers.
However, the content these
players offer is served on increasingly polished and engaging platforms with an
often highly personalised user experience that makes most news Web sites and
apps pale in comparison. With growing user expectations, news publishers
realise their users expect an increasingly seamless and engaging experience of
their journalism, in particular when they are asked to pay. As shown by the
stars of digital media mentioned above, creating such a user experience
requires direct control of the platform on which content is offered.
What does taking control of
the news publishing platform entail?
Medium-sized or large legacy
news publishers have had in-house engineers maintaining and developing the
systems that power their Web sites and apps since the 2000s. However, most
legacy news publishers have sourced as much as possible from tech firms, insisting
media companies do good journalism while others do good tech. This means media
companies ceded control of most key assets related to their news publishing
platform (including user data) to third parties.
2020 marks the year this
begins to change. A part of the change will be publishers reserving news
content for their own platforms while demoting social and distributed media to
marketing channels containing only teasers for content and links to news
stories behind paywalls. More importantly, publishers will begin housing some
or all of the assets that make up their own publishing platforms.
A few ambitious frontrunners
have taken this to the extreme by bringing their publishing platforms in-house
(almost) end-to-end. Examples include Schibsted (Schibsted Publishing Platform)
and the Washington Post Company (Arc), the latter of which began selling its
platform to other publishers in 2019. Other publishers, such as Ringier and
JP/Politikens Hus, aim to take control of user data by building in-house
capacity for collecting and using first-party data, which is increasingly
important in creating personalised and engaging news content and advertising
experiences.
Yet other publishers are
investing in building better journalism experiences by strengthening the
relationship between news content and technology. One example is JoLab, a collaboration between Norwegian
publishers, which opens January 2020 and focuses on visualisation, graphics,
Augmented and Virtual Reality, and Artificial Intelligence.
The commonality among all
these examples is that they involve a definition extension of what it means to
be a news publisher from journalism to journalism
and platform. Only a few publishers will follow in the footsteps of
ambitious frontrunners such as Schibsted and The Washington Post and bring
their entire publishing platform in house.
However, mainstream news
publishers will seek to take control of the parts of their platforms necessary
for providing a competitive journalism experience in the 2020s. With regard to
news, this experience will be less social and more paid, and user expectations
are now widely set due to digital entertainment offerings.
What are the strategic
implications for competition among news publishers in the 2020s?
The increased focus on
controlling the platform on which their news is published does not change the
fundamental fact of news publishing: Content is king. However, it signals that
the journalism experience publishers’ own platforms provide will become an
additional value driver and source of competitive advantage.
This has several strategic
implications that will shape competition among news publishers in the 2020s.
When the platform becomes an
additional value driver, investing in platform improvement allows news
publishers to grow their subscriber base and increase prices. This does not
imply, however, that platform improvements allow news publishers to compete with
Netflix or Disney+. Content is still king, and news publishers can strive to
provide a seamless and engaging experience of journalism to become a leader
among news publishers. Competing with the best video-streaming providers
requires investing billions in entertainment content.
When news publishers take
control of the key assets supporting their platform, they also regain control
of lost steps in the news publishing value chain. Accordingly, developing the
ability to collect and use first-party data decreases dependence on providers
of third-party data, while demoting social and distributed media to marketing
channels increases control over news distribution. Taking back control of steps
in the value chain can be costly (i.e. investments in data scientists or lost
traffic from social media) but will, if successful, allow news publishers to
capture more of the value they create.
Finally, when a news
publisher’s own platform becomes a source of differentiation and competitive
advantage, it must be nurtured and protected to stay ahead. Accordingly,
publishers who fail to take control over key platform assets will be weakened
in competition with the publishers who succeed.
This is good news for global
media brands owned by tech giants such as The Washington Post that have
resources and access to high-quality competencies in engineering, design, and
AI. It should also be good news for national leaders in smaller media markets,
which have greater capacity to develop their platforms than their national
competitors. However, it might be another piece of bad news for small, local
news publishers who struggle to find a solid model for their digital afterlife.
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