Cebu Press Freedom Week is a time for the local media industry to reflect on its many opportunities and challenges, and one concern it cannot ignore is financial sustainability.
The traditional business models of advertising and circulation are moving into decline. Coming up with the rise of digital and the massive shift of the audience to social media platforms are new revenue streams that allow media companies to diversify their sources of funding.
The coronavirus disease (Covid-19) pandemic has accelerated the digital transformation of many news organizations. For small and medium-sized newsrooms, it meant rushing to online because that was where the audience moved during lockdowns and also because there were newspaper companies that shut down and the only way to keep their journalism alive was to publish online. Yet, they didn’t know how it is to thrive online.
Media’s travails started before the Covid-19 lockdowns in March 2020 with advertising revenue already dwindling and circulation going down, but it was during this period of the pandemic when several publications died.
Here’s a quote from Rohan Tiwary of Google in 2020. He said, “News organizations who had set in motion strategies for alternative revenue streams were able to better withstand the pressures of reduced advertising due to Covid-19. We believe it’s crucial for publishers of all sizes to find ways to grow their reader revenue to ensure a sustainable future for their business.”
“Reader revenue” is a term being pushed strongly by media sustainability advocates who know that, on digital, there are many opportunities for news organizations to earn. The term refers to the business model in which some or all revenue of news companies comes from the direct financial support of readers.
The WAN-Ifra or World Association of News Publishers has made reader revenue as its cornerstone message to news organizations for over 12 years now to ensure sustainable quality independent news media.
The Google News Initiative reader revenue playbook describes the models as:
Subscription is a program wherein a news organization requires recurring financial payment for access to content. On premium content, publishers designate specific news articles or sections as premium, which can only be accessed with a subscription.
The contributions model is when publishers encourage readers to contribute or donate to support a brand of journalism.
Membership refers to the package of value-added benefits that publishers offer their subscribers or contributors, and micropayments are when readers can purchase access to content at the article level.
Allowing readers (or viewers and listeners in the case of radio and television) to support news organizations or pay for the content that they consume is seen by many in the media industry as the only way forward. The new business models will work if news organizations have a direct relationship with the reader, rather than the advertiser. Your customer is your reader, not the advertiser.