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A digital manifesto for content companies, part 1: New thinking is needed to power future growth.
A manifesto for change and a set of principles that can drive a new era of growth for content companies.
Our work in the content industries over the years has been extensive — and fascinating. Our very first piece of work helped a leading US research company become a digital business and we’ve been deeply embedded in the world of content ever since.
There have been numerous milestones in the consumer content space along the way: Which?, The Times and Sunday Times paywall, Newscorp’s project Alesia, Grazia’s e-commerce enabled magazine; BT Sport… and many, many more. Content businesses have been, and remain, some of the most fascinating companies to work with.
However, generating enough profitable income to thrive, after more than a decade of trying, remains a challenge for many content companies. I believe that we’re finally emerging from what has been, by any measure, an extremely disruptive era of business for these companies and, armed with a new mindset, they can flourish in the years ahead.
It’s time to think differently, and the time to do it is now.
The myth of content monetisation.
Let’s start at the beginning. Most people in the sector would agree that traditional forms of content monetisation were ‘broken’ by the internet through the early years of the new millennium. The internet came along and in the rapid shift to digital consumption, content companies were forced to find new ways to monetise their content.
Wrong. That’s when ‘monetising content’ became a topic of conversation. Monetising content wasn’t broken then, it was started. Previously, the conversation was focused on the products that the content filled: newspapers; magazines; books; channels — and how to increase sales of them.
It was the same for consumers: you browsed products, not content, and if you liked something, you bought it. With few exceptions, giving something a try involved buying it. You could buy it easily, and the cost was usually low so the risk of sampling something new was also low.
You could then keep buying it forever — or occasionally — without the creator even knowing your name. You could never buy it again if it wasn’t for you. There was money in this equation from the beginning and there was a value equation in place that everyone — creator and consumer alike — understood.
Fast forward to today. That simply doesn’t exist. We have a variety of all-or-nothing models in the market that either drive down income to gain volume or drive down volume to gain income. Those are not the ingredients for an industry with a vibrant future.
New models are needed. The whole mindset around content monetisation needs to change. A new relationship between creator and consumer needs to be established, appropriate to the digital age, with terms of business defined by the content companies, not by giants with very different agendas.
Principles for the next generation.
It’s clear that this has been a period of survival and adaptation. Now it’s time for the next generation of content businesses to emerge, built on a new set of principles that can drive meaningful digital growth.
Here are my take on those principles.
Think product not content.
Fuel growth with habit.
Think payment not paywalls.
Make commitment a benefit.
Sell delight not data.
Extend value with ecosystems.
In parts two and three, I’ll expand on where these principles have come from and why they can enable real growth.
For many years now, Google, then Facebook determined the terms of business for digital content. Between them they account for an overwhelming percentage of digital ad revenue and have progressively sucked more and more money away from content companies as their dominance grew.
With Facebook’s reputation in a hole, and consumers becoming increasingly aware of how their data is being used by the giants, we’re at one of those points where the tide of consumer behaviour can be turned and the content sector as a whole can re-establish itself as a growth industry.
There are enormous opportunities for content companies who are prepared to innovate their service models using the principles I set out above. Vision and bold decisions will be needed — along with the courage to see them through — but the returns will be well worth it.
This is the opportunity for content companies to complete their transformation into digital businesses by shrugging off many of their digital behaviours to date and adopting a set of principles that align them with the best of their all-digital peers.
In the next article, I’ll focus on the critical ingredients of habit and money and why charging everyone is the only way to grow.
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