PerfectMarket

Battle of the Brands

Let’s start a conversation.

The news industry is abuzz about “content mills” and other efforts to reduce the cost of producing content in an era of declining revenues. But roughly 12% of newspapers’ costs are for content, and just a fraction of that goes to pay for the high-quality, hard-hitting professional journalism that is at the heart of great news brands.

The problem is not the cost of content. The problem is that a growing number of Americans are getting their content online. That’s why some of the current strategies being discussed and implemented — such as hiring teams of freelancers to write articles by the piece and using algorithms to figure out what to write about — miss the point. Instead of looking for ways to produce content on the cheap, the news industry should continue to invest in content and look for new ways to monetize it where the action is — online.

The key to building traction and a substantial business on the Internet is, simply put, attracting eyeballs. All newspapers today already have an audience and, to be successful online, they must do everything to nurture the goodwill of that audience. That’s just one reason why poorly implemented online pay walls are a bad idea — all they do is run the risk of alienating people who have come to love a brand. And in the battle for eyeballs, brands matter.

Classic business theory suggests that when you’re in a mature industry whose revenues are declining, the right strategy is to stop investing and milk it for cash. But if news executives treat their businesses as cash cows in decline they run the risk of destroying their brands, which have always been their best source of value and always will be. So great news organizations must do everything in their power to preserve and enhance their brands. Because great content — great journalism — drives traffic.

For a deeper discussion of what an offline brand is worth online, check out Steve Walker’s insights and analysis at the Perfect Market Analytics blog.

I’ll be exploring these and other related topics in future posts. And I’m looking for you to weigh in.

Tags: