The global pandemic has been devastating for nearly every industry, but especially for print and digital publishers.
Having spent the years since the Great Recession refining what they hoped would be a sustainable business model—from erecting paywalls to diversifying into offerings like branded events—they’re now facing yet another serious threat to their existence. And the most vulnerable among them might not survive.
“The media business is very much like the human population,” notes Kyle Pope, editor and publisher of the Columbia Journalism Review. “If you had preexisting conditions going into this, you’re in deep trouble.”
In some ways, the media industry is still recovering from its last major setback. The late 2000s decimated many print publishers, wiping out magazines like Portfolio, a business magazine from Condé Nast, Gourmet, Spin and SmartMoney.
Advertising took five quarters to return to print’s pre-recession levels—not fast enough to save the print editions of titles like Redbook and Seventeen at Hearst Magazines, Family Circle at Meredith and Glamour at Condé Nast.
Publishers began experimenting with printing so-called special issue publications for the newsstand, marking up the price of a magazine to make up for a lack of advertising.
The news was better on the digital front, with advertising making a comeback after the recession. “Pent-up demand” led digital advertising to return in just three quarters, said Ken Harding, senior managing director at FTI Consulting.
Still, digital media also put greater focus on getting readers to pay for information. The industry saw a surge of digital outlets putting up a paywall, as with The Cut, or creating membership programs, like Quartz and BuzzFeed—complete with gimmicks like exclusive newsletters, access to editors and tote bags thrown in.
Meanwhile, technology and media companies continued to innovate new tools to court advertisers and measure KPIs.
Publishers were headed into this year with a re-emphasis on using their first-party data to attract more ad dollars and prepare for a future without third-party cookies. Their competitors? Not just other media organizations but also Amazon, Facebook and Google, companies that can sell advertisers reach at scale. Total ad revenues for Alphabet, Google’s parent company, for example, reached $33.8 billion in Q1.
Trying to gain an edge with greater scale, digital media outlets began merging and acquiring one another at the end of last year. Bustle Digital Group made a business of acquiring media sites for cheap, and Vox Media and New York Media merged last year, as did Group Nine Media and PopSugar and Refinery29 and Vice Media. All entered 2020 with newly integrated editorial and business staff and shared infrastructure to theoretically attract readers and advertisers in a bigger way.
Diversified revenue streams also became key. Both print and digital publishers have entered the worlds of podcasting and live events. Bizzabo, an event software company, says its clients—publishers like The Wall Street Journal, The Atlantic and CNBC—generated roughly $22 million in event registrations last year.
Despite these strategies, publishers have had to do more with less. Newsroom employment has continued to steadily decrease since 2008. In all, U.S. newsrooms were operating with about 25% fewer employees in 2018 compared to 10 years prior, according to Pew Research.
When the pandemic hit the U.S. in March, it was back to square one for some publishers.
In the middle of March, Future Media Group (owner of magazines like Surface and W) furloughed at least 17 employees, Future plc (with sites like TechRadar and Space.com) laid off 15% of employees, alt-weekly owner Euclid Media Group laid off 70% of staff among its publications in five states and American Media (publisher of Us Weekly) cut employees’ pay.
By the end of March, Gannett told its employees that it would require them to take an unpaid week of work through June, and CQ Roll Call laid off about 6% of its workforce. The week after that, Bustle Digital Group laid off about 6% of employees and temporarily reduced pay. G/O Media laid off less than 5% of staffers, and Group Nine Media laid off about 7%.
By mid-April, Vox Media furloughed 9% of staff and temporarily cut pay, Condé Nast temporarily cut pay, Meredith handed down temporary pay cuts, Tribune Publishing furloughed staffers and cut pay and tech site Protocol laid off nearly half of its workforce.
It’s almost easier to name the media organizations that have not seen some form of cost reduction in layoffs, pay cuts or furloughs. The pandemic has become a survival game for media businesses.
“Overall, this means, sadly, that news media is getting smaller in its operations and in its news capacities, and at a time of so many problems in the country and the world,” said Ken Doctor, a media business analyst.
Even The New York Times, which saw record subscription growth last quarter, hinted last week at job cuts to come, but not to those “in journalism,” the company said. In its Q1 earnings report, the company also announced a year-over-year net ad revenue decrease of 15.2%.
The industry has spent the past nearly two months in quarantine doing what it can to make up for those financial losses in advertising and events. They’ve fast-tracked products, created virtual events and attracted new subscribers despite pulling down paywalls so readers could consume content for free.
But what happens next? We asked seven media analysts and experts for their perspective.
Media businesses were already thinking about how privacy regulations would affect consumers and, in turn, their products and relationships to them, specifically under CCPA and a cookieless future. And the pandemic has put a new lens on the importance of collecting data and better understanding their audiences.
The quarantine is reshaping consumer behavior. For example, more than half of those surveyed by Havas Media said they are watching more TV and streaming more video with the free time on their hands. This behavior is most apparent among those aged 25 to 34 (66% of whom said they’re streaming more video), but the trend crosses all demographics, even those in the 54-to-65 range (31% of whom said they’re streaming more video).
Is this a temporary change? “[A pandemic] is long enough for a behavior to take hold,” noted Cynthia Kent Machata, head of planning at Havas Media Group.
All the more reason for print and digital publishers to improve their ability to track consumers during this pivotal time. Publishers that are able to learn what their new audience does (or doesn’t) look like and can most effectively communicate that to advertisers and potential partners will be in a position of strength.
“This is a one-time event that you’re seeing this surge of information,” said Andre James, partner at Bain & Company and the head of the firm’s Americas Media Practice. “Winners will be able to capitalize on that surge and adjust their offerings even as the crisis continues.”
Publishers also need to quickly channel those findings to brands to help them craft their messaging. Media organizations from BuzzFeed to Business Insider to Condé Nast say they’ve been piecing together insights into how consumers have already changed.
BuzzFeed, for example, noticed a shift toward escapist content—readers were switching their attention from watching Netflix hits like the dating reality series Love Is Blind to Tiger King (whose tagline is “Murder, Mayhem, Madness”). And the publisher shared that observation with potential partners, including alcohol brands marketing toward those at home. “The shifts are happening so quickly,” noted Ken Blom, BuzzFeed’s svp of ad strategy. “How do we get our clients living and breathing at the same time as us?”
When Walmart wanted to communicate how it was responding to the coronavirus, it invested in a takeover homepage ad at Business Insider, which has been keeping brands up to date on how consumers are changing their behaviors.
Condé Nast, too, is talking with brands in real time to give them a sense of how consumers are changing their behaviors and brand preferences, especially with many stores still closed to customers.
“It’s an interesting kind of paradox of the advertising community leaning out when consumers are leaning in,” said Pam Drucker Mann, global cro and president, U.S. revenue at Condé Nast. “It should be in parallel. You should be where the consumer is whether you have stores open or not.”
It’s not just consumer behavior that’s being monitored closely. Advertisers are also watching how publishers serve their readers during the pandemic.
“The ones that we see really resonating are those publishers and brands that are listening to consumers and being mindful and helpful during this period of time,” Machata said. “[Readers] are not looking for a 20-minute meal—they want to bake bread.”
As the content shifts, so does advertisers’ approach.
“It’s all about your messaging and pulling that together and how your brand comes across during this time,” said Sean King, evp of Veritone One. “I think everyone is being as creative as they can be right now.”
Even though the pandemic poses serious challenges on the revenue front, it also presents an opportunity. Those that invest in “high-quality,” “differentiated” content will convince readers that journalism is worth paying for, said Doctor. “Reader revenue only becomes the dominant force if you earn it,” he said.
In fact, more than half of U.S. adults (56%) say they consider national news outlets a major source for coronavirus news, while 51% said public health officials and leaders were, according to a study from Pew Research last week.
Media organizations have said they’re working faster than ever to move products from ideation to execution. Within days after safer-at-home orders went into effect, many media businesses turned their in-person events into virtual conferences and webinars. They’ve also created new products to interest advertisers and consumers. For example, Axios, fast-tracked an app, Bloomberg Media created a new tool to catch readers up on developing stories and Vox Media took a Q&A functionality widespread.
Readers, in turn, are indicating they’re open to paying for content. The Atlantic, which prioritized covering the pandemic, reported that it attracted more than 36,000 more subscribers in the first four weeks of its coronavirus coverage. The New York Times reported record-setting first-quarter growth, attracting 587,000 net new digital subscriptions, and new subscriptions were notched at Gannett and The Wall Street Journal.
Broadly, media organizations from The New York Times to The Washington Post have seen a surge of traffic over coronavirus coverage—larger even than the Trump Bump they saw in the 2016 presidential election.
The following weeks, and months, will be crucial to publishers to retain subscribers, as they continue to face an unsteady advertising industry. “The new normal will be different,” said Harding. “I don’t know that anyone knows what it is.”