Mather Economics hosted the 9th Media Revenue Symposium in Atlanta March 21-23. We were joined by 16 CEOs of news media companies and many other industry leaders, including Greg Piechota from INMA. This year’s symposium was the first with our new Sophi team members. We appreciate the time and engagement of many news media industry leaders with whom we have worked for years.
In this post, we would like to share many prominent themes from the event. Future blog posts will expand on these themes in more detail.
Product innovation and addressable market growth — identifying audience segments seeking specific types of content. News media companies are innovating with product offerings and content categories to expand their addressable markets. These content offerings complement news coverage on digital platforms as they do in traditional print products. The trust and editorial standards in news coverage lend authority to other content published by news media, and this additional content improves reader engagement, which is crucial for consumer revenue streams. Content that broadens the reach of news media to new audiences and helps retain current customers is vital to sustainable business models.
Business model transformation — transition to new revenue streams and adjusting business practices to match cost structures with revenue. News media companies innovate with business models that best suit their local market characteristics and audiences, and many of these innovative business models require tighter integration between editorial, audience and advertising business functions. Business model transformation leads to greater alignment of the organization's metrics, data and incentives across functions. News media are investing in core business processes, particularly content creation while leveraging partners for non-core activities is growing.
Artificial intelligence challenges and opportunities: News media is leveraging new AI tools to increase business process effectiveness and efficiency while preparing for the expected disruption in digital audience traffic patterns. News media are evaluating how generative AI’s expected disruption of online navigation away from search engines will affect consumer and advertising revenue streams. Also, news media are developing tools using AI to improve the user experience of their products. Some AI use cases effectively reduce the costs of producing good journalism, but news media are careful to maintain the quality and accuracy of their content. Licensing access to content for use in training generative AI models is an emerging revenue stream for many news media companies, but this market is still nascent. The magnitude of these effects of AI differs across the industry, and alternative strategies to adapt to AI are emerging.
Advertising market changes stemming from cookie deprecation — News media’s audiences are compelling targets for advertisers. Still, the potential for monetizing first-party data depends on the specificity of information about those audiences’ interests and attaining sufficient scale. Higher-quality information on target audiences can offset lower scale. However, a demonstrable return on investment from targeting advertising using news media’s first-party data and lower-friction data transactions is necessary for significant growth in this revenue stream.
In summary:
News media’s navigation through the confluence of these trends appears to be fostering innovation in business models and product strategies across the industry. We are optimistic about the opportunities facing news media and are encouraged by the rapid pace of innovation. The disruption caused by artificial intelligence and third-party cookie deprecation affects social and search platforms, technology providers, the advertising market and new media entrants. Finding successful strategies and tactics for news media with differing market and business characteristics will be a focus of Mather Economics in the coming months and years and the topic of future Symposiums.
Matt Lindsay is president at Mather Economics, based in Atlanta, Georgia. He can be reached at matt@mathereconomics.com.
