NME is just the latest company to suffer from the rise in digital publications. We are looking into the history and the changing marketplace.
The history of NME
NME is the longest standing weekly music publication in the world – a popular culture magazine which launched its first issue in 1952. According to an NME media pack, the publication’s target market was men in their late teens and their twenties, with a readership split of approximately 63% male, and 37% female.
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NME launched a website in 1996 gradually branching into more and more topical areas. In its heyday, the magazine was generating sales of over £1 million per week from over 400,000 subscribers. However, by 2015 that had dropped to 15,000 subscribers, with a corresponding dip in advertising revenue to boot.
In an attempt to address this problem, the publication converted itself to a free publication from September 2015. They began relying on advertising revenue rather than sales revenue. This increased the subscription base to around 300,000 , providing a temporary boost to the advertising revenue.
More recently, NME was acquired by a private equity firm. They have determined it no longer cost effective to run the publication, making the decision to revert to online only.
The changing publication marketplace
In a previous article, we explored the changing media marketplace following the insolvency of Team Rock. Technological innovations and changing attitudes have meant that:
- Readers are less willing to pay for news where it is freely available on the internet
- There is a focus, or concern regarding the environmental impact of weekly magazine publications
- Handheld devices make news articles portable
- “As it happens” news means that articles can be published anytime rather than waiting for a weekly publications
- There is an increase in self publishing with the rise of social media and blogs
- Plus, a reduced value in nostalgia in having a collection of back issues
- And reduced disposable income in the target audience
All of this has resulted in reductions in paper published media meaning that the publishers are having to react to these changing attitudes quite dramatically in order to survive. Those sticking to the idea of printed publications are having to come up with new ideas to sell paper magazines.
Some of the successful ideas include:
- Interactivity with a mobile app or webpage using QR codes in the magazine
- Vouchers to save money on other products
- Particular content strategies, e.g. to avoid gossip, which is much more suitable for social media, and stick to rich, in depth content. This content should be exclusive and not be made available for free online initially
- Reputation and accuracy – avoid all content that could be fake news and stick to facts
The first two methods also generate advertising revenue. The QR codes can be used in conjunction with an “ad wall”, which also displays as a loading screen. Vouchers will mean you enter into promotional partnerships with suppliers of almost anything offering money off as part of the promotional offering, or having to have vouchers for X amount of issues to claim the promotional item. For some, this may be a more artificial lift in sales, but the idea is to increase the readership longer term once readers have recognised the quality of the content being produced.
How online publication is funded
There are four main ways that online publications make profits:
- Data collection surveys
- Subscription paywalls
Many online publications will use a combination of all three. You may notice now that a lot of online publications have thick borders with adverts, pop ups and integrated adverts which all interrupt the reading experience. This is now necessary to fund these publications. Many publications will offer an option to subscribe in order to hide adverts leaving readers with the option to tolerate the interruptions or pay to avoid them. Either way the publisher makes money from people reading their articles.
Many publishers will have surveys to collect data from you which must be completed before you can read the article or offer a free subscription. A condition of this will then be that the data can be sold on. They will also run competitions giving away £20,000 for example. In order to enter they will now require you to text a premium rate line with bouncebacks offering bonus entries for texting more than once. For nationwide publications, they will only require around 10,000 entries before the direct costs are covered.
The impact on the publishing marketplace
Changes in attitudes and technology have created a marketplace that is evolving at such a rapid pace that keeping up with it is mandatory if you want to stay in business. This is not just true in the publishing industry but across all sectors including retail, as we have recently seen with the demise of Toys R Us, which has failed to change the business model across its trading life.
It’s no longer possible to run a business the same way for 5-10 years. The most successful businesses are the ones looking to constantly adapt as new innovations become available. If you find that your business is struggling to keep up and you need some professional advice regarding the best way to move forward, please contact one of our business rescue experts.