Evolution of Social News Organizations (part 6)
In the last installment (part 5) of our series, we looked at how diversified an SNOs ad model is. Specifically, we explored how SNOs use all the user data available through social media and mobile apps to deploy hyper-targeted ads that blend CPM, CPC, and CPA ad models.
Today, we look at some of the logistical and practical considerations of a print organizations evolving into a predominately digital one, and shedding a lot of the baggage and overhead that’s now obsolete. We also recap some of the market realities that are making it necessary for these organizations to do so.
Print Editions & the Social News Organizations
A considerable challenge facing news publishers in their transition from print to SNO is their plant infrastructure. Not only has considerable capital already been invested in printing facilities and print distribution channels, but these publishers are often bound by long-term contracts with suppliers and unions. Newspapers, then, must phase their print editions out gradually, and in a cost-effective way that actually supports their mandate as an SNO.
A free edition of an SNO’s print edition can be used to both satisfy pre-existing contractual agreements and convert more of their subscribers into digital users. First, by continuing to distribute a free print edition, SNOs can delivery it to the doorstep of paid subscribers till the end of their subscription terms, and fulfill their commitment to those loyal readers.
Second, a free print edition will also provide the pretense to fulfill contractual agreements with suppliers. This includes both consignment deals with printers and collective agreements with unionized employees.
Finally, free print editions can assist in migrating more users online. By producing a daily news brief print edition that is available for free on city streets, SNOs can stimulate additional interest in their more complete online content. Such an edition would feature headlines and limited, “news brief” content, directing readers online for the complete stories.
These free print editions would also feature QR codes to assist the user locate the online content via their mobile phone. Once a user scanned a QR code with their phone, they would then be directed to the WAP site or prompted to install the SNOs mobile app. Once that action was complete, the SNO would have access to their geo-location and could target them with relevant ads for nearby offers, stores, or promotions.
The Evolution of a News Species
There still remains a market demand for authoritative, journalistic content. The reason that the newspapers industry has experienced such a tumultuous transition in recent years is because its distribution and revenue models have become obsolete. By transitioning into SNOs, however, newspapers would be able to modernize both their distribution and revenue channels.
Digital media have created a content economy of abundance. Online digital content is so ubiquitous that users are unwilling to pay for digital content (even when it’s quality, authoritative content) and unlikely to rely on non-digital means for their content needs. This has rendered conventional print editions obsolete as a distribution channel for authoritative, journalistic content.
As a result, newspapers’ revenue model has been hit on three fronts: (1) falling print circulation has decreased overall ad sales, (2) digital advertising has decreased the market demand for print ad space and finally, (3) paid subscriptions have fallen with circulation and proven incompatible with digital channels.
An SNO, however, uses completely different distribution and revenue channels to address market realities. First, SNOs are more like public parks than walled gardens; content is protected behind a free registration wall. Second, SNOs leverage SEO to increase the visibility of that content and drive registrations.
Third, social media is used to reduce registration barriers, drive registrations, retain users, and access personal data that is used to guide editorial decisions, customize user experiences and deliver highly target advertising. Fourth, SNOs employ custom mobile apps as an added distribution channel, source of data, and hyper-targeted ad delivery medium.
Finally, SNOs use a blend of CPM, CPC, and CPA advertising to monetize and maximize the value of their ad space. As SNOs use user data to better target advertising, they are able to charge more per impression and/or click, leverage CPA ads with much more confidence, and develop customized ad packages that blend all three models. Overall, advertising confidence is restored and SNOs reduce the volume of dummy ads they render.
In essence, the SNO is a new, emerging species of publisher. The media marketplace on both the supply and demands sides have changed, and SNOs are evolving to survive in this new ecosystem. To adapt to new supply-side conditions, SNOs have adapted their distribution model, and to survive demand-side conditions, they have adapted their revenue model.
Growing Pains
The transition from conventional newspaper to SNO, granted, will not be a simple one. Incumbent organization and managerial hierarchies will struggle with new logistical models and be slow to adapt. Existing plant size and contracts will also tie up scarce resources and delay progress. More organizations will likely fold in some way.
What’s important is that newspapers are not alone, and the changes they are facing are also being faced by the publishing industry as a whole. Digital media is increasingly the channel of choice for content consumers, and digital publishers continue to find new ways to monetize these channels.
Where newspapers really differ from many other publishers, however, is in their overhead. Fact-checkers and editors are an integral component to producing their main product, authoritative journalistic content. In this respect, news organizations must explore other ways to shed obsolete infrastructure — such as using mobile journalists to reduce office space costs.
So while the future of the news media remains unclear, what is clear is that certain distribution and revenue channels are obsolete. Newspapers, then, need to adopt and adapt to new digital channels, and becomes less like newspapers and more like news organizations. After all, endangered technology and business models rarely return from the brink of extinction.
Read the Series:
- Part 1: Social News Organizations: How Search & Social are Changing the News Business
- Part 2: SEO & Social News Organizations
- Part 3: Social Media Integration & Social News Organizations
- Part 4: Mobile Content & Social News Organizations
- Part 5: Diversified Ad Revenues & Social News Organizations
- Part 6: Evolution of Social News Organizations
