Legacy media companies had a huge disadvantage when it came to adapting to digital publishing, especially compared to the pureplays who were born in that world.
Larger organisations have many more people to which they are beholden and many more layers in the hierarchy that changes must be forced through. It’s no surprise that many of the UK’s venerable news outlets are said to have ‘BuzzFeed’-like digital publishing strategies: The BuzzFeed model is successful in terms of growing to scale and commanding high advertising rates, a priority for most of those legacy media brands.
— GEN (@GENinnovate) June 16, 2016
The ‘fail fast’ approach to the digital pureplays is an enormous strength, since the desire to try new things in reaction to changing audience consumption habits is built into their DNA. That advantage really can’t be overstated, especially as the titanic legacy brands struggle to react to one issue even as another appears on the horizon.
That’s not to say legacy brands don’t have advantages over the startups, of course. As the latest Reuters Institute Digital News Report makes clear, legacy news publishers enjoy a much greater level of trust from their audiences compared to the startups… even if people still won’t pay to support them.
— Damian Radcliffe (@damianradcliffe) June 16, 2016
And some legacy brands are trying to emulate that ‘fail fast’ approach, using their still-impressive funds to buy startups for integration or to launch digital-only spinoffs of their own – with varying results, admittedly.
At the GEN Summit in Vienna yesterday, a panel discussed whether recent legacy endeavours will enable them to challenge the pure online players – and whether the idea of it being legacy vs. pureplay competition is misleading.
Jim Roberts, former chief content officer for Mashable, believes that one inherent disadvantage legacy media companies have is that their mindset is that of a follower, rather than a leader:
“Many legacy publishers were followers, they weren’t leaders. They were allowing digital publishers to lead the way, to at least innovate in their way of thinking. [Digital publishers] were first willing to publish content not on their own sites.
“They have to be leaders; they can’t be followers.“
As a result, those pureplays were at the head of the pack when it came to benefiting from the initial Facebook boom. When scale was the foremost consideration for publishers and investors – which it arguably still is – that acted as an accelerator for those publishers, who used the momentum to build upon their early successes.
Legacy publishers, meanwhile, were suddenly judged by the same standards, and found to be lacking. No wonder that we saw many try to emulate the digital successes.
But Roberts argues that the days of the digital boom are over, not just in terms of traffic growth…
… but also in terms of the investment from venture capital firms that the pureplays are likely to receive:
“There’s been a bubble in digital media. A significant amount of venture capital investment has come into these companies.
“I think [for] many of these publications, BuzzFeed, HuffPo, a lot of growth had been because of their Facebook strategy. Algorithm changes have made those challenges very difficult to maintain.”
So if the tides are turning for digital pureplays, what advantages do the legacy publishers still have that will allow them to win this ‘tortoise and the hare’ race, as moderator Amanda Farnsworth asked?
Rainer Esser is general manager for Die Zeit. He believes the core values of legacy media are a strength the digital pureplays lack:
“The high quality, the trust people have when it comes to our brand… is our most valuable asset. When it comes to younger folks… you hint Millennials do not like quality. Our users at Zeit Online are the youngest amongst news portals in Germany. Traffic like BuzzFeed’s… is of no relevance to us, because we’re interested in quality traffic… we can monetise.”
He notes that within Germany BuzzFeed is considered “a big failure”, dwarfed by legacy companies in terms of traffic. He also urged publishers not to put all their content on Facebook for free (though Germany is something of a special case in that it’s slightly protected from the English language):
— Douglas Arellanes (@dougiegyro) June 16, 2016
Swings and roundabouts
The tone of the discussion indicated that legacy publishers great strength is that they are not the digital pureplays, whose own source of funding and revenue might be about to disappear. In many ways the advice from the panel was that legacy publishers only need to wait out the collapse of the pureplay economy and that, with a few notable exceptions, the vast majority of digital players might fail faster and more completely than they’d like.
“I think we will inevitably see a shakeout in the world of digital publishers. A great deal of investment has come into these companies and that’s beginning to slow. I don’t think the world will be as populated with as many pureplay digital publications. However I do think that some have incredible staying power… and we haven’t seen the end of what they can do.”
He specifically cited BuzzFeed and its work in partnership with the BBC on investigative journalism projects like the tennis match fixing scandal as an example of a pureplay that could deliver on its promise. Rainer concurred, saying:
“VICE and BuzzFeed are certainly heroes. Apart from those I think there is a bubble.
“VC will cease to go into this bubble, and legacy publishing houses [will survive] as long as they innovate, as long as they use their brand.”
On the one hand, that sounds like wishful thinking from a legacy brand, that a vast swathe of their competition should suddenly disappear. But there are indications that the VC bubble is deflating. The problem is that many of the underlying issues facing the legacy brands won’t magically vanish if it does, and audience consumption habits won’t suddenly become static.
— Eliza Mackintosh (@elizamackintosh) June 16, 2016
— Juan Ignacio Sixto (@juanisixto) June 16, 2016
Ultimately, then, maybe legacy media doesn’t have to challenge pure online players, since they have many other challenges in common. Perhaps partnerships are a better way to go, even for relatively secure operations. Even Esser, whose business model attracted a good deal of admiration from the audience at GEN, said Die Zeit was open to partnerships with anyone – ‘short of the devil’.