How will media publishers make money in the future?
On day one of the nextMEDIA conference in Toronto yesterday, speakers from some of Canada’s biggest digital media publishers gathered on stage to debate about how digital content will be monetized in the future.
Dominique-Sebastien Forest, VP Digital at Transcontinental Media was the most vocal in saying that “the porn business will tell you what’s coming next. Change always happens four to five years in advance for the porn industry and then trickles down to the traditional models.” Forest went on to suggest that media publishers should “look at what’s working for the large porn portals – who offer a lot of their services for free but then charge for niche content or audience participatory content.”
Of course, Forest’s comments got a huge laugh from the audience. But no one on the panel could really disagree with him.
Graham Mosey, General Manager at AOL Canada argued that “if monetization doesn’t improve, then content will inevitably suffer.” He referenced eMarketer in saying that “advertisers spend fifty-three cents for every hour we spend reading newspapers. For every hour that is spent online, media publishers generate twelve cents in advertising.” And it’s even bleaker for mobile, where “for every hour spent on a mobile device, publishers are generating roughly one cent in advertising,” says Moysey.
When the discussion turned to pay walls, Forest from Transcontinental once again referenced the porn industry in saying that “the porn business already tried pay walls and failed.” Martin Byrne, Chief Technology and Innovation Officer at St. Joseph Communications argued that “with the cost of access today, Canadians already face a pay wall to simply get on the Internet.” So, never mind paying for a website's content, “we need to re-evaluate the overall cost of access and the existing distribution models,” says Byrne.
Finally, the speakers agreed that tablets may not be the once touted “saving grace” for the newspaper and magazine industries. Wayne Parrish, Chief Transformation and Revenue Officer at Postmedia Network said that “tablets once seemed like the holy grail. However, we’re still experimenting with how to take our complete suite of products (i.e. websites, mobile apps, etc.) and make them relevant to our audience at different times of the day and at different touchpoints.”
Forest argued that “the majority of downloads on tablets today are video games. The Kindle is actually the only device that is showing true growth in content consumption.” He went on to argue that like the Kindle, "each individual mobile app or media asset needs to be useful in solving one single problem.”
Overall, the NEXTmedia panellists were unable to predict what future revenue models will ultimately look like for the media industry. However, as average CPMs continue to drop for online banner ads – advertising will certainly not be the sole solution.
Originally posted here.