This post originally appeared in the world association of magazines' (FIPP) newsletter Jan. 12, 2022. Here is the link to the original.
Where is the media heading in 2022? Consultant and author John Wilpers offers his take
As everyone in the industry is painfully aware, the last two years have been very challenging for media companies. Adjusting to new ways of working, as well as integrating new revenue sources to replace long-established ones, has all been taking place against the backdrop of an unprecedented rollercoaster ride for the global economy.
Yet there are signs that publishing companies enter 2022 with renewed confidence, buoyed by excellent financial figures from 2021 and an optimistic hunch that the new year might see a return to stability creating lots of new opportunities as well as rekindling some old ones along the way.
One man who has been tracking the changes and is superbly placed to offer a panoramic perspective on the new year is John Wilpers. Last year was a busy one for John as he not only co-edited the annual overview of the media in FIPP's ‘Innovations in Magazines World Report’ but also co-founded a new consultancy — Katahdin Media Management.
John believes that publishers need to embrace the changes of the past couple of years and use them to sculpt the future. He also stresses that, as with so many industries, finding and retaining talent has become a priority for media companies and that they might be better placed spending the next couple of years focusing on nurturing their staff and readers rather than being distracted by shiny new innovations.
As consultants what would you say are the core messages that you are hearing from the industry generally?
What my partners and I at Katahdin Media Management are hearing is an overarching sentiment in the industry for simplicity — a return to the basics of our business (serving readers and making our businesses financially sustainable) and focusing on the care and feeding of the people who make it all possible: Our staff.
We are exhausted by the pandemic. The core elements of our business need stabilizing. We can take a break from hyperventilating about shiny new things.
"Let's actually talk to our readers to discover their unmet needs...and fill them!"
Let’s actually talk to our readers (and non-readers) to discover their unmet needs … and fill them. Let’s talk to our advertisers and business partners to find out what their unmet needs are…and fill them. And then let’s talk to our staff to find out what they need to raise their games and feel safe, valued, and inclined to stay with us… and do it.
Let’s get our readers, our diversified revenue streams, and our staff in shape, and then move on next year. No one is going to steal the NFT, augmented reality, metaverse, machine learning, or cryptocurrency markets from us in the next 12 months.
We’ve all been battered and consumed with regrouping over the last 24 months. Let’s take the next 12 to finish the job so we can hit 2023 with a robust reader, revenue, and employee base.
How successful do you think that media/publishing companies have been in bouncing back after the pandemic-induced difficulties of the last two years?
Obviously (and sadly), some media companies have not bounced back. Those who have survived were already positioned to withstand disruptions by having multiple revenue sources or they were nimble in transitioning to virtual events, e-commerce, memberships, branded content, data, education, and more. Those keys to success — revenue diversification and a nimble organization. — will continue to be the road to surviving and thriving.
Do you think that the trend for home working will continue? If so, is this a good thing? Or does it compromise the creativity and communication of publishing teams?
That train has left the station. There is no going back to working in an office 9-5, five days a week. The benefits to all parties are too great: For the employees, they get to avoid long commutes, spend more time with their loved ones, enjoy flexible working hours, etc. For the companies, they get a vastly expanded talent pool, happier employees, massive reductions in expensive office rental, etc. Case in point, I just launched my own company, Katahdin Media Management, and all of our clients have retained us after the initial consultation as remote fractional executives — filling in talent gaps as a remote team member (not just as in-and-out consultants) all across the world.
"The value isn't in having bodies in the building; the value is in getting teams together"
That said, I believe there is no substitute for the power of in-person interactions to stimulate creativity and connectivity. I believe we will see scheduled office days and/or times, not the loose choose-your-own-schedule approach. The value isn’t in having bodies in the building but in getting teams together, even if just for several hours of brainstorming.
What is your take on the future of events? Is the hybrid conference here to stay? Will 2022 see a return to big exhibitions?
This is another train that has left the station. Virtual events are here to stay. There are just too many benefits to ignore: Hugely expanded potential audiences given the absence of travel costs and lower participation costs, and hugely reduced cost structure given the absence of venue rental and food costs. But the downsides (most importantly lower revenue plus the human need for in-person connections) will drive the return to in-person events. But those in-person events will also have a virtual component. And some events will be solely virtual.
You regularly produce a list of revenue sources for publishers. How important is online display advertising now? Might it rally in 2022, and what impact will the death of cookies have on ad revenues?
Those are two questions that could each fill a white paper on their own. But, in a nutshell, display advertising will always be with us, but never the dominant income source it was envisioned as being. Advertising is morphing to become much more nuanced and creative, taking the shape of multi-element campaigns that include banners but also branded content, sponsorships, events, ecommerce, and even media outside of the home media company.
The death of cookies will have an impact on ad revenues initially, but only initially and only for media companies that aren’t aggressive in starting now to build first-party reader data that will be even richer and more useful to advertisers than the cookies were. But that’s a major undertaking that must begin immediately so that when cookies disappear, media companies will already be ready with a treasury of rich data.
What do you think is the key emerging revenue source that publishers should be exploring in 2022?
One, and only one, revenue source should drive publishers today: Reader revenue. There is simply no substitute for everything reader revenue brings to a publisher’s table: Recurring revenue, loyalty, data, email addresses, opportunities to upsell subscribers to memberships, events, ecommerce, paid newsletters, brand extensions, etc. So, whether it’s a subscription or a membership, reader revenue is the key. And really most worthwhile ancillary revenue streams are simply understanding your audience and their needs and matching that with a new product or service – in other words, a disguised form of reader revenue. Everything else is gravy because nothing else proves you’re doing your job as a media company.
Has the unwritten agreement between publishers and social media companies been permanently broken? What might replace social media as a source of new traffic for online companies?
Nothing will completely replace social media as a way to reach more readers and potential readers outside of our own channels. Social media is ubiquitous. It isn’t going away. Platforms may change, but there will always be the Facebooks, Instagrams, and Twitters of the world. The key is to learn how to manipulate the platforms, rather than being manipulated by them. The platforms should be used to drive traffic, test ideas, and raise awareness — never as a vehicle for content. I wrote a white paper about how to make Big Tech work for you and it is available for free for FIPP members here.
That said, more sophisticated direct email programs will take more of the pie that social media currently occupies. Tech innovation is occurring very quickly and the way we consume media is too — it is important for companies to keep an eye on emerging trends like voice search and synthesized media to make sure they are creating the foundation that will support quickly pivoting to new technologies.
Have we reached peak podcast? Is it now no longer an opportunity for media companies?
Lately, media companies have latched on to podcasts as a potential lifesaver. But very few are making serious money, and some are cutting back. Podcasts should not be seen as a major revenue source but as an audience builder with an ancillary revenue benefit. There is no question that podcasts are popular and powerful, and that they will continue to be so considering how convenient and personal they are. But they are mostly so niche-oriented that they will always have relatively smaller audiences with relatively smaller revenue potential.
Will the print revival continue in 2022? Is it only going to be in niches or we will see more mainstream companies launch new titles?
Print is settling into its new role, one that will be increasingly niche and increasingly high-quality. The eternal assets of print — its tangibility, its rich presentation of images, its service as an escape from our digitally-dominated lives, its freedom from privacy intrusions and spam — will always make print a valuable asset for media companies.
"The number of print launches more than doubled in 2021 and almost equalled the launches in 2019"
The number of print launches more than doubled in 2021 from 2020 and almost equaled the number of launches in 2019. And they weren’t all small niche launches. Grazia USA is the USA version of the 83-year-old Italian fashion bible and it debuted with a 400-page book. That said, the supply chain and labor challenges brought on by the pandemic make print operations ripe for disruption. Combine those preconditions with the continued volatility of paper and mailing costs, and it’s a bit of a wildcard.
What would be your key piece of advice to publishing/media companies for the new year?
Almost every year, I have said that the most important thing a publisher can do is to pay attention to his or her talent. It’s hard to find, hard to train, and even harder (and very costly) to replace. Your team is the key to your success, so their happiness, advancing their skill sets, their freedom to be creative, and their commitment to your mission are critical and worthy of your attention.
That’s still important. But this year, my advice is to reach out to your audience and potential audience to discover their needs and wants, especially their unmet needs and wants, so that you can be the company that delivers on their desires.
"Your editors are largely guessing."
If you’re like most media companies, you have a cadre of editors making content decisions … alone. They might be using some data analytics, they might reference conversations with their circle of friends, but they almost certainly won’t be able to reference much input from the people they are purporting to serve.
Your editors are largely guessing.
There is no substitute for actually reaching out and asking your readers (and non- and former readers) what you could do to keep them or to bring them into the fold as paying subscribers or members. You’ll be surprised at how enthusiastically they will give you advice that will contain ideas that would never have come up in your editorial team meeting. Expand your network, and stay in touch with that network.
(Katahdin Media Management partners Peter Medwid and Kathleen Capetta contributed to this report.)