The future of publishing: The best revenue models for your digitization

This article is intended to show you revenue models and opportunities for digitization that your publishing house can also use to enter the digital future. In addition to the online business models for publishers, we present a specific example of a specialist publisher in a separate case study, which has implemented many of the measures suggested here and successfully mastered the digital transformation.

Digitization is progressing. The days when you could still say: "Website? I don't need one" are long gone. Young people in particular are now so used to high speeds that they have to force themselves to return to slowness. For example, by reading a good book or a newspaper. Thanks to the digitalization of publishing, both are also available to readers on tablets, for example as e-books.

Studies by the BDZV and consulting companies as well as AGOF and ARD and ZDF show that Internet use - and mobile use in particular! - continues to rise. The market is not yet saturated, but those who are not yet available in this market will not remain so for much longer.

But what opportunities do publishers and media companies in general have to "succeed" financially in the digital world, where everything seems to be free? This article is intended to show you revenue models and opportunities for digitization that your publishing house can also use to enter the digital future .

DIGITIZATION IS A MUST

Print media vs. digital media: According to bitkom, only 68% of the media companies surveyed in the publishing industry provided journalistic content online in 2016. This includes newspapers, magazines, books and book publishers. In addition to their own websites, many rely on online platforms such as Facebook, Twitter and YouTube. Users of this content primarily use a mobile website, smartphone or tablet app. And 90 percent of media companies that produce journalistic content are convinced that advertising, advertisements and sales revenue are no longer sufficient to finance traditional print media.

The BDZV is also observing the following transformation: higher circulations and more advertising revenue in the digital sector of online journalism and a downward trend in the print sector of the publishing industry. And there are those big players who have supposedly carried out their digitization without difficulty - and are able to record an increase in revenue. Take Axel Springer Verlag, for example: according to the BDZV, it recorded sales of 62 percent with digital products. How can you, perhaps a smaller publisher, keep up with this?

GENERAL-INTEREST PUBLISHERS VS. SPECIALIST PUBLISHERS

It's true: Large publishers have a greater chance of operating profitably through digital sales revenue and advertising alone. On the one hand, they are publishers with a large reach and a fundamentally paying audience (Wall Street Journal, WELT, etc.). On the other hand, these publishers can charge more for advertising than a small niche publisher. This makes this form of monetization problematic for small (specialist) publishers.

On the positive side, if you have visitors to your website who have not previously been print payers, these are potential new customers, as they are generally interested in your content. See it as an opportunity! See digitalization as a bundle of opportunities:

• Multimedia of audio, video and text → Unfortunately, you will have to do without this in your print magazine.
• Interactivity in training publications, for example → You receive direct feedback on the quality of your products if you track user behavior.
• Up-to-date: content is always up to date → And without having to print a new edition.
• Mobility: content tailored to time and place → This allows you to meet the needs of your target group at the right time and place.
• Personalization: individual compilation of desired information → This allows you to find out what really interests your readers.

In any case, there IS money to be made with digital products in online journalism: Statista has surveyed sales increases in recent years:

MOBILE DEVICES

It all began in 2010 with the iPad, which ushered in a new age of technology. Although the Amazon "Kindle" reader was already available in 2007, it was only on a par with the iPad from the "Fire" generation onwards.

Journalistic content can be consumed very well with the available tablets. There are stores where magazine apps can be purchased. But it goes much further: today's devices are designed for interaction. And this offers you as a publisher the opportunity to produce real added value for your customers!

PARADIGM SHIFT THROUGH DIGITAL CHANGE

Digitalization requires changes to organizational structures and internal processes. You must be prepared to adapt flexibly and with foresight to the new developments and find the right business model for your publishing house.

The focus is on your target group: you must fully meet their information needs. Involve your customers in product design.

Example Pearson: This publisher has expanded its product range and serves learners with

• educational software
• online continuing education
• study courses
• PowerSchool (Apple), a web-based service that tracks the attendance and grades of students in a class
• Podcasts for revision and preparation
• worldwide test centers and language schools

In order to realize such products and services, publishers need to count on strong partners such as IT service providers, consulting companies and creative agencies that have relevant experience with the digital transformation.

CURRENT STATUS OF MEDIA COMPANIES

bitkom surveyed 148 media companies. 72% of them are changing their business models as a result of digitalization. 85% are adapting existing products and services. Most of them have therefore already realized that they cannot continue on their current path. A full 80% are creating new products and services for digital channels, with 18% even going so far as to withdraw existing products from the market.

New revenue models and digital business models in the publishing industry are leading to a number of transformations:

The trend is also towards using social media channels more widely: Just under 70% were already using Facebook, YouTube and Twitter in 2016. Instagram (22%), Whatsapp (19%) and Livestream (18%) are on the rise. Pinterest, Snapchat and Apple News have been used more for several years.

The companies were also asked how which revenue models will develop in the future. The figures for "Will (strongly) gain in importance in 10 years" clearly show that traditional sales revenue and traditional advertising will become less important than their digital counterparts and new revenue models, which will be examined in more detail in this article.

What revenue models exist for publishers today?

To clarify this crucial question, we have taken a closer look at various models and divided them into 3 groups: The conservative way, the innovative way and the lateral thinkers.

Digitization is progressing and you as a publisher have to keep up. See it as an opportunity, because it has never been so easy to achieve such a gigantic reach. You also have the chance to be innovative and stand out from the competition. Check all the options for generating revenue for yourself, because not all models are suitable for every publisher.

However, digital transformation is also a major challenge. Without a good digital strategy, planning and implementation, you will fail. Agencies such as arocom or WDP have experience in this area and can accompany you on your path to digitalization. You can find an example of successful digitalization by clicking on the button.

Some of the images used in this article come from other sources. You can find the sources in the imprint.