With every crisis comes opportunity, and that has certainly been the case for many publishers in 2020. We’ve heard from dozens of media companies, large and small, about how the pandemic has impacted them - for the worse, but also for the better.
Back in August, we spoke to James Hewes, FIPP CEO and President, to hear his insights on the situation during this unprecedented time. From capitalising on increased public trust and appetite for subscriptions to fast-tracking sustainability agendas and adapting to office-free life, Covid-19 is leading many companies to rethink their priorities - and make changes to their business models for the long-term.
Covid-19: direct impact on three crucial areas
In a pre-coronavirus landscape, much of the magazine media world was focused on deploying one major strategy: diversifying revenue streams. “Typically, the main ones would be selling copies, subscriptions, and/or advertising,” explains Hewes. “New areas of business might include ecommerce, live events, and digital media.”
Crucially, Hewes says, the pandemic has shown that they were right to do that. Two or three important revenue streams have been severely affected by the virus, so alternatives are vital. “The first of course is live events, which simply became impossible overnight in many places,” says Hewes.
The second is advertising: “During the height of the crisis in March, April, and May advertising virtually disappeared. If you think about something like travel, advertising for summer holidays which would usually take place, all that vanished.”
“Subscription sales have been up in print and digital for most of our members.”
Thirdly, retail sales of magazines were affected. But it isn’t all doom and gloom: “It hasn’t been as bad as first thought, since it turns out that people were still buying magazines from the retailers that remained open,” says Hewes. “Plus, subscription sales have been up in print and digital for most of our members.”
Industry trends overall: things were changing anyway
Perhaps most noteworthy is that a lot of these changes were coming down the track anyway. “The key word is really acceleration,” Hewes pointed out. “Essentially, the pandemic has forced a lot of FIPP members to take decisions that they were going to take regardless. Some smaller or weaker brands have closed, yes, but many were going in that direction already. This has just brought the changes on faster.”
Hewes noted that Covid-19 has given many magazine brands an immediate reason to focus on the future of their print businesses. “It’s pushed them more towards the trend of investing in production quality,” he says. “This enables you to increase the price but reduce the frequency. In other words, to reposition print as a luxury product.” (More on that below.)
Perhaps the best success story is in digital subscriptions. “We’ve noticed a huge boom in most members’ digital businesses. Those with paywalls have noticed 10, 20 or even 50 percent increases in digital subscriptions for news brands,” added Hewes.
Hewes predicts that most brands will come out stronger and healthier. “But we mustn’t take it lightly either,” he says. “People may have lost their jobs, lost their businesses, and we have a huge amount of sympathy for them.”
“Print is finding its place in the long-term media mix”
Hewes also spoke about print which, pre-crisis, was beginning to feel like it was finding its place in a predominantly digital ecosystem. Covid-19 has shaken up that trajectory - but not necessarily in a bad way.
“What we see is that print is a very important medium still,” Hewes explained. “But at least in magazine media (leaving aside newspapers), it is undergoing a big repositioning based on two things: one is print becoming a ‘luxury’ product, and the other is increased public trust.”
The first trend is being driven by consumers’ growing willingness to pay for better quality publications which are published less frequently, but with increased pagination, higher quality paper - and a higher price tag. “Rolling Stone Magazine in the US is a great example of this,” says Hewes.
On the second point, studies are showing time and again that in an era of fake news and unregulated social media, print is one of the most trusted - if not the most trusted - medium in the market. “I really think we haven’t made the most of this as an industry; we could do more to enhance our credentials,” says Hewes.
He cited a recent Edelman Trust Barometer report, which found that more than 60 percent of people trust traditional magazines and newspapers, versus between 30-40 percent for digital media - and particularly social media networks. High quality, trustworthy content has never been more in demand.
“If print publishers can focus on these two things, we’ll be in a good place as an industry,” Hewes says.
Sustainability is a must
Hewes also emphasised a wider societal trend towards sustainability and climate consciousness, in which the media is no exception. In fact, UPM and FIPP co-published a report on this very topic, “Publishing and climate change: How the industry is taking action” in June 2020, and another one the year before that. Both reports reveal that a spike in public awareness about climate change is leading to the issue moving up boardroom agendas, too.
“It’s increasingly becoming a hygiene factor, a must-have for consumers,” says Hewes. “People want to know the end-to-end environmental impact of the products they’re buying.”
He gave two key examples of brands leading the way in this area. “Historically, companies involved in creating children’s magazines like the BBC, Disney, and Egmont have been at the forefront of making sure that they have an ethical and sustainable sourcing process for their cover mounts and toys,” says Hewes. “Their huge reliance on plastic has started to go.”
Condé Nast is also doing a great job, says Hewes. “It’s playing a huge role in delivering more awareness of its own impact, like electricity and water consumption, and then working to reduce it. This is the kind of aspiration we should have as an industry.” Another example is The Guardian, whose climate pledge promises to “completely eliminate” two-thirds of the paper’s overall emissions by 2030.
Advertising in a difficult position, but still valuable
Hewes also spoke about the role of advertising amidst the broader shifts he spoke about. “Advertising’s in a very difficult place, I think,” he says. “Print advertising has been in decline for a very long time, and this has been accelerated by the crisis. There have been many steps downwards.” Whilst the hope is that good publishing companies will still find a way to make money from print advertising, “the days of reliance on print ads are gone. It’s just not possible any more.”
The digital space, furthermore, is complicated by two things: fraud, and the size of the big players which control 80 percent of the market. “There’s an enormous amount of ad fraud - billions of dollars is disappearing into the pockets of criminals, because the digital advertising supply chain is not very robust,” explained Hewes.
On balance, the changing dynamic is a positive thing for an industry which has been too reliant on ads. “We still love our advertisers but they won’t be as critical for the bottom line going forward,” says Hewes.
Pandemic innovations for the future
One question that has come up time and again throughout FIPP World Congress is how publishers can gain - or in many cases, are already gaining - competitive advantage during this turbulent period. People aren’t able to innovate as before, but that doesn’t mean innovation isn’t happening.
Perhaps the most obvious example is around events and video conferencing software. “Live events have been switched for virtual ones, including here at FIPP,” says Hewes. “At Congress, we [held] 80 sessions across the course of the month using a great innovative platform that delivers a comprehensive experience for delegates. Zoom and other platforms have been given an incredible opportunity to innovate through this pandemic.”
Other innovations are being explored, many of which feature in the FIPP Innovation in World Media Report 2020-2021. “Podcasting, for instance, has shown itself to be a very important tool for generating content and delivering subscriptions, and that has only grown throughout the pandemic.”
How to recruit and retain talent is another subject ripe for fresh takes. “Now that the need for an office is up for debate, there are big questions about how to manage a team going forward,” says Hewes. “We’ll see lots of innovation there. The past few months have seen companies managing as best they can, but given that people will not be returning to offices for probably 6-12 months, as businesses we have to think clearly about motivating and recruiting people remotely. I’m even hearing people question the role of cities: do you even need a city if there is no office?”
Ultimately, Hewes added, one of your fundamental drivers as a company is to bring down your overheads. “So if it turns out you don’t need an office, there isn’t a CFO in the world that wouldn't cut that cost. Here in the UK, there’s early evidence that this is a long-term trend. We’re going to see a lot more balance in people’s lives, less time commuting, less density of people moving together on public transport.”
Finally, Hewes is cheerful and certain that the print space will continue to bring forth new permutations. “One thing we’re sure of is that every year, just when we think we can’t see any more innovation in print, we always do!” he says.
Text: Sadie Hale
This article was written in collaboration with FIPP