3 Lessons Publishers Can Learn from the TV and Music Industries
This is an incredibly hectic, yet exciting, time for publishers. New platforms for distributing content are emerging and users’ behaviors are evolving. Media executives are being tasked with wading through the noise and uncovering solutions that will further meet the needs of today’s modern-day consumer.
I am no stranger to this struggle, having co-founded German music TV channel Deluxe Music back in 2004. I began my stint in the TV industry prior to the rise of streaming, but over the years took notice of how people wanted to stop committing to bundled cable subscriptions and start getting access to the content they actually wanted to watch. Fast forward to the 2010s: Netflix completely disrupted this space by listening to these consumers’ demands and launching a completely user-centric product. Music, too, has experienced disruption thanks to emerging tech. Fortunately, this industry has been able to de-bundle the antiquated album and give consumers more flexibility in their consumption by re-bundling into individual songs via iTunes and streaming services. iTunes gave people “1000 songs in their pocket.”
Disruption is a buzzword among many industries, and publishing is no outlier. Ultimately, publishers should examine how companies like Apple and Netflix have broken apart and grouped content together, and apply similar user-centric approaches to unbundled content via individual articles. Publishers must prioritize consumer choice and convenience in their offerings to offer truly superior user experiences.
Here are three lessons I’ve learned from working in the TV and music spaces that can help publishers innovate strategically.
Unbundling Has to Happen Before Re-bundling Can Occur
Back in the day, people were forced into an all-or-nothing experience when listening to vinyl records and, eventually, CDs. Industry heads soon realized that the average music consumer wanted more flexibility, and eventually came iTunes. iTunes’ core benefit was providing a superior user experience and a legal solution. While people might still have bought entire albums, they at least had a choice; I sometimes ended up buying individual songs, just to buy the entire album thereafter. Unbundling is nothing more than providing convenience to your consumers, who will ultimately reward you by using your service more.
Unbundling had to happen first before the music industry could re-bundle on streaming services like Pandora or Spotify simply because it was too big of a step to go immediately to a flat rate. Unbundling tapped into users’ confidence, which made the re-bundling process seamless both for business executives as well as for the users.
The industry has come a long way, but the time has come for more flexibility in news consumption. Publishers should examine the music industry’s approach and start offering individual article access. There are different platforms and providers available that can integrate seamlessly into publishers’ existing infrastructures and offer users a choice to view content for a certain period of time or on a case-by-case basis, for example. Publishers should be open to strategic partnerships with technology providers in order to further meet their users’ needs via unbundling. Unbundling is also the best subscription generator as it gently moves users into paying customers before offering them more convenient subscription models.
Don’t Allow a Third-Party to Own Your Content
Viacom disrupted the music industry when it launched MTV. MTV grew on the back of music publishers who were the original providers of content and user attention. These music publishers’ brands were essentially non-existent because of MTV’s major appeal. For example, consumers didn’t listen to Whitney Houston through a publisher like BMG, but rather on MTV; we all heard people asking “did you see the new Whitney Houston video on MTV?” None of us ever heard “did you see the new video on BMG Ariola?” Viacom's approach to leveraging third-party content paid dividends. By 1997, MTV Networks accounted for $625 million, or 32 percent of Viacom's total estimated earnings, all on the back of music publishers.
This is eerily similar to the issues still plaguing today’s publishers and content creators, as Facebook is growing as a modern media company on the backs of publishers. Facebook has pushed a number of publishers to give up independence and hope that the platform’s algorithms will lead users to incremental revenues or to their owned websites. Publishers should want to keep their assets on their own properties. They should want to use other platforms like Facebook and Twitter for marketing initiatives and increase reach, but they won’t be able to maximize monetization unless it’s on their own platform.
Focus on Business Development and Innovation, or Smaller Players Will Take Over
Long live the days of Blockbuster, when people raked in high rental fees and low satisfaction. The company was not quick enough to see users’ consumption patterns changing, and became prey to disruption. Netflix, comparatively, gave people what they had been asking for since the Blockbuster days: easy access to content anywhere and the ability to cancel or restart your offering anytime. Blockbuster was simply not innovating nor implementing a user-centric approach to business, leaving Netflix able to take over.
Publishers and creators can look at Netflix as an example of strategic product development speaking to the market in a user-centric way. User-centricity revolves around seeing shifts in paradigms. Technology can enable paradigms to shift, but it also empowers users to challenge the technology and force it to evolve. If you don’t evolve accordingly to consumers’ preferences, that’s when you become today’s Blockbuster.
Publishers can appropriately react to today’s paradigm shift by creating superior user experiences that involve fast and easy access to content tailored to users’ needs. While it has only just started to kick off in the U.S., we’re seeing an expansion of offerings more from international publishers such as Der Spiegel in Germany, which has been able to funnel one-off users into paying customers. Forcing users into silos through subscription-only models only further alienates them and inclines them to move on to your competitors.
Cosmin Ene is the founder and CEO of LaterPay, a payments and technology company with offices in the US and Germany. Under Cosmin’s leadership, LaterPay has become the monetization standard for local publishers in Germany with over 200 clients, and has expanded to the US market.