Digital publishing is doing something it hasn't done en masse since the dawn of the Internet: make money.
Why it matters: Business Insider, Vox Media, The Information, Axios and Politico all turned profits in 2019, in several cases for the first time ever, sources tell Axios. Others, like The Athletic, BuzzFeed and Vice, say they are expecting to do so this year.
The big picture: Five trends are working in digital media’s favor:
- A global wave of new copyright laws means that platforms are likely to have to start paying publishers for the right to carry their content, even if it's just a linked headline or bit of text.
- Some tech companies are getting ahead of it. Facebook is paying select publishers up to multi-million dollars annually to distribute their content. Platforms like Apple, Twitter and Snapchat give publishers a cut of the ad revenue they make or sell off their content.
- Increased demand for creators and creativity to produce podcasts and TV shows for the new streaming platforms. Last year saw record demand for television original series. Demand for podcast and audio content is also leading to a record number of digital companies to partner with podcast studios and distributors to create audio content like flash briefings and skills.
- A regulatory and cultural shift towards privacy is pushing more advertisers to rely on first-party data to target users. Several publishers, like Vox Media, News Corp. and The Washington Post have created new data marketplaces to capture that demand.
- The growth of big, murky online marketplaces in retail is forcing consumers to turn to trusted publishers for commerce recommendations and guidance, creating a new revenue stream for publishers.
The other side: Media companies that lack true scale or dominance of a specific niche continue to face challenges. Most executives believe this trend will continue, leaving a small group of large publishers and high-quality niche sites.
Between the lines: There’s hope for the bigger publishers to reach profitability, but many have had to slash costs to get there.
- Some publishers that have raised lots of money, like Buzzfeed and Vice, have taken large-scale cuts in the past two years in order to get closer to profitability.
Be smart: These success stories have begun to allay investor concerns. Venture investors known for expecting quick returns tell Axios that they are beginning to take a longer view of their investments in publishers that have more sustainable business models, like subscriptions.
Go deeper:
from Hacker News https://ift.tt/37gmbtb