What is the single most important risk to your news organizations’ future success?
That’s the question posed to 235 news execs and managers in media by WAN-IFRA (The World Association of Newspapers and News Publishers, a global organisation of the world’s press).
The top answer …was “reluctance to innovate,” followed by concerns over finding new revenue streams and a sustainable business model. According to NiemanLab which reported these findings, only 5 percent worried about Google and Facebook.
Others wanted their organizations to protect existing revenue streams but also aim to earn about half their income from new sources in the next five years (56 percent of those surveyed). A third group said they wanted their companies to earn more than half their revenue from sources other than advertising and content sales (36 percent). NiemanLab
What is at odds with their goals of earning over half their income from new sources other than advertising, is the reluctance to innovate. That could stem from a fear of failure or not wanting to spend the time or money on the unknown when daily operating concerns with revenue attached compete for resources.
This reminds me of the analogy of a frog in warm water that doesn’t jump out and slowly dies as the water boils. He gets used to the warm water. Similarly, many media companies are focusing on the familiar (advertising) and want to squeeze as much revenue from that (video,podcasts, branded content) — all the while losing time to become less vulnerable through alternative revenue bets.
Often the answer for alternative revenue or innovation comes through a design-thinking approach of listening to customers to see if you’re even solving the right problem; a beautiful way to de-risk the pursuit of an opportunity or prevent product creep.
Here’s an example of where some good ole design-thinking could help an entire industry. Currently, publishers are caught in this vicious cycle of wanting to create more video because they get higher advertising rates for video then text. However, video is much more costly to produce. Consumers may like video but not necessarily for news or on every story. Also, many publishers need the traffic from social media (Facebook, YouTube) to grow their traffic. However, they have to split their revenue with these distribution platforms making it difficult for their business models to work.
This looks like a cycle with diminishing returns.
Another point. As one who loves connecting the dots, I also view the use of interim executives, who can pinch hit for a short-term project, as a valid option for project management or business development. Many of these executives have years of experience they can offer toward solutions. Media companies may not be able to afford them full-time but can part-time. Patina Solutions, an interim-management sourcing company, has done this successfully for years in the Midwest in the health and manufacturing sectors. The same could be done in media.
Helen Whelan is a serial entrepreneur and consultant. She has 15+ years experience creating strategic partnerships and designing new business ventures. She focuses on assisting start-ups and established companies innovate successfully through design-thinking and good leadership. Follow her blog at SuccessMedia or on Twitter @SuccessTV.