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A digital manifesto for content companies, part 3: No distinctive product, no future.
Think product, not content; it's the product that defines your value proposition.
In the first two parts of this series on content companies I set out seven principles that can underpin the digital future for content companies, and why building habit and charging everyone will be the commercial backbone. This final part focuses on why an integrated product focus is essential to make it work.
The unbundling and atomisation of content that began with the emergence of Google continues to this day. In an effort to secure reach, content creators have encouraged their content to be distributed widely in single units, making it hard to associate much value with it.
Social media has become the default gateway to content, linking billions of people to individual units of content via their social feeds. The normal mode of discovery for many people is via social, and for the younger generations of consumers, it’s pretty much the only mode that matters. The volume of people driven to content from social channels today is staggering.
A big part is also played by the aggregated experiences like Apple News and Google News that are embedded in the mobile devices we all carry. And of course search, primarily Google, still ranks highly.
All too often today, creators are no more than a badge at the top of a unit of content, and that content has increasingly been produced and titled to gain revenue from the ad impression, not delight from a consumer who might become a habitual customer of a bigger proposition.
Today, consumers jump in and out of single content pieces, whether to and from social channels or search, within Facebook via Instant Articles, or within the aggregators. It’s an almost impossible task to make consumers value these individual pieces of content highly when they are encouraged to consume them in such a — excuse my French — slutty way.
Value via product and proposition.
Back in part one, I discussed how, before all of this fragmentation occurred, products, not content, were the focus of the industry’s attention. As a result creators were able to charge consumers for everything they produced, and build the habitual behaviours in their consumers to charge more.
They also produced much less than they typically produce today, and its quality was more tightly controlled. Product-centric thinking drove quality and quality product drove the willingness to pay. Content has a far higher value as part of a coherent package than it ever could as an individual unit.
This has long been the unsung benefit of paywalls for me: they almost force a more disciplined approach to the holistic product experience because they set a high barrier to entry, and should focus creators on the quality of what is delivered to someone willing to climb the wall. They also force creators to articulate their proposition succinctly, and it quickly becomes clear when someone is unable do that.
Paywalls have definitely contributed to better product thinking, but they’re only the start.
To re-establish the power of habit and associate value with consumption of content, we need a new generation of news / business / technology / lifestyle etc. products that give consumers something they can truly fall in love with again.
A distinctive product built on a clear proposition.
Some of the most successful content products in recent times have forged a distinctive proposition and shaped their product to manifest it.
Take The Week. It’s the jewel in the crown of Dennis Publishing’s business for sure, and it’s certainly a product that is likely to drive habitual consumption. The interesting thing? You could argue that it is entirely built on non-unique content. Its role in the world is to synthesise and sum up what’s been covered elsewhere, present differing perspectives side by side — and do it well. It’s a great example of how a clear, compelling proposition and aligned product experience develop habit and drive revenue. Product, not content, thinking has made it a sustained success.
In the news world, we’re starting to see movement too. Tortoise, the new ‘slow news’ venture from an ex-The Times/Dow Jones team is positioning considered member-informed journalism against the high volume mainstream — and charging £250 a year for it. It’s in beta as of writing, with a membership-centric subscription model that brings its consumers into the editorial process each day. De Correspondent is treading a similar path.
I’d urge Tortoise, and others like them bringing new ventures to market, to think about the principles set out here and how to get a paid habit snowball rolling before pushing commitment too hard. We need more Tortoises in the world, trying new things in new ways, and for that to happen they need to be able to make money.
What about the paywalls that are ‘working’? The Times has publicly declared its paywall a success, announcing growing profits. We helped to create it back in 2009/2010 which gives you some sense of the commitment required to get it to this stage. The bravery to step away from what everyone else was doing, a focus on building a quality product and the resolve to stick to a strategy for the best part of a decade has underpinned that success.
We’ll certainly need much more of that behaviour in the years ahead, but I believe that commitment-only brands like The Times, The Economist, The FT et al will need to evolve their approach if they are to achieve their full commercial potential. Today, despite approaches largely regarded as successes, they are unable to monetise a huge percentage of their audience effectively. As I mentioned in part two, the NYT is directly monetising around 3% of the audience it serves today. No other business would think of that as an acceptable ratio.
With a habit-centric approach, they really could have their cake and eat it.
A new way to think about ecosystems.
Of course, there is much more scope available for monetisation if you consider the broader ecosystems that creators can build, from branded events to e-commerce partnerships and product extensions. Monetising across ecosystems can be a powerful element of any digital business strategy, and it’s no surprise that some creators are vested heavily here.
I believe there are new and interesting opportunities available in content ecosystems, where creators actively embrace cooperation with their peers to keep the money flowing in their world instead of lining the pockets of the digital giants. Clear commercial benefits for moving a consumer between creators would help to ensure that there is a healthy and growing pool of revenue flowing between creators rather than them feeding off of the scraps left behind by a Facebook.
With the right commercial mechanics in place, there are also plenty of opportunities for explicitly bundling products together within one payment system to increase overall value to the consumer and keep money ‘in the family’.
With some imagination and vision, and a strategy they can stick to, creators could wrestle control of their consumer back from the digital giants and start being paid what they’re worth. It would also encourage everyone to really hone in on their distinctive positioning and consumer proposition as it’s hard to make anything generic work in this scenario. And that’s a very good thing.
Value, not volume, will drive far greater commercial success for creators in the future.
A word on data.
I’m not going to dig into data too much here, but I do want to explain why one of the principles is to care about delight not data.
Data should be an inherent part of the operations of any modern digital business, but in the content sector the obsession with it has gone way too far. Largely this is due to a reliance on advertising: ‘selling against data’ has been a topic of conversation for years now. Better consumer data, better targeted ads, better rates, and so on.
This mindset needs to change, and fast. There’s a reason that Facebook and Google take all the money here: their data is much better, and always will be.
If GDPR in Europe showed us one thing it’s how widely and desperately consumer data is being shared in an attempt to generate ad revenue. Any creator who thinks that a list of 20, 30, 50 or 100 (~ my highest count so far) ‘data partners’ is going to lead to a product experience that we fall in love with is deluding themselves I’m afraid.
Here’s the Washington Post (remember who owns them) explicitly offering a non-tracked, non-ad-filled version as a Premium version of their experience. The message this gives to consumers, rightly, is ‘we offer a poor experience generally, but you can make it better by paying us a sensible amount’. You could also read it as ‘our content isn’t worth paying for, but keeping control of your data is’.
These companies are effectively federating the decisions about product direction, led by the performance of granular components of their offering instead of standing behind the value of their product as a whole. I believe that the data-fuelled, ad-funded approach to content monetisation has done more to devalue content than Google ever did when they basically stole it and served it up for free.
I would challenge any creator to separate themselves from this dependency on data. The best data in the world cannot make up for a poorly positioned product and a poor experience — but a reliance on data might just lead you to precisely that. It has a role to play for sure, but not at the expense of a delightful experience that can drive habit. One in a thousand creators will be able to use data as brilliantly as Netflix and a rather smaller number will be able to afford to. Netflix is Netflix. Get over it.
Make a distinctive product that you believe in and are confident enough to stand behind, then allow consumers to pay you a sensible amount for it simply and fairly.
Becoming true digital businesses.
One of the basic principles of being a true digital business is a fully integrated approach to experience and commerce. There should be no visible distinction between what you use and both why and how you pay. Uber exploded because its payment mechanism became truly frictionless and inseparable from its core functionality. Mobile gaming exploded commercially when seamless in-game purchasing became the norm.
Even digital music was just a quirky sideline until Apple integrated buying and consuming seamlessly (ironically, at the time, by reducing it to single units… but units that were never, ever free) before Spotify showed them an even better way to do it.
This is the time for content companies to think more imaginatively about how to operate. They must complete the transition to become true digital-first businesses and shrug off the last vestiges of protectionism, defensiveness and a general feeling of woe. Digital-first innovation must become the norm to capitalise on a constant stream of emerging technologies. Everyone knows that voice is important, but few, if any, have a real strategy for how to integrate it into their overall product strategy, or, critically, how to make any money from it.
Tortoise, Agate, De Correspondent, Kinzen, Curio… the first shoots of innovation in the sector are showing but there is a very long way to go before we see a real shift in fortunes, because even some of these new initiatives are built on traditional thinking around the commercial models that underpin them. True digital businesses do more than put a new wrapper around an old product or a new product in an old wrapper. They succeed by innovating across — and integrating seamlessly — technology, business model and consumer experience.
There is a vast global marketplace available and by taking a more positive approach to innovation, content companies can capitalise on its full value. Coherent strategies will be needed along with some new behaviours and a good dose of courage, but the prize is, quite simply, the ability to thrive again.
A reminder of the seven 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.