Publishers and the open web - how Publishers handled the move to mobile
When platforms began to dominate the mobile future, how did the world's major publishers react?
Over twenty years Google, Apple and Facebook gradually then quickly became the gatekeepers of the web. The platforms acquired, integrated and built at pace and with engineering skill, and audiences and advertisers followed.
There’s a fuller version of that story here https://substack.com/home/post/p-150301497 which looks at that from the perspective of the major platforms.
In this post we’ll look at what can be learnt from the various strategies deployed by the big publishing houses over this period - gifted with new technologies and a truly global audience how did they play their hand?
I worked in the industry either in start ups, national news or magazine publishing businesses throughout this period. There were a lot of decisions made at speed which made sense at the time. However, the gift of hindsight suggests the publishing houses were outmuscled, gradually then quickly with moves hidden amongst waves of innovation.
Search Engines power up, digital as incremental (c.2004-2007)
Starting back in the brief moment between the AOL/MSN/Yahoo portals and the iPhone, national news and magazine publishers were still riding high on scale print circulation revenues and steady print advertising. Audiences were habitually paying for content and most publishing businesses were robustly profitable.
Through that lens digital publishing on websites was still very new, and mostly seen as an incremental channel for stories from the print edition. The Home Page was the destination and mostly looked like the front page of a newspaper. Traffic came from bookmarks on desktop computers, and there was a nascent advertising market based on banners and home page takeovers.
From 2004 though the world began to shift. Google began to deliver search traffic to news sites at a rate that had not been seen before, not just in volume but also bringing audiences from all over the world to articles that suddenly shot up the rankings. Soon every week was a record week for global traffic and digital ad revenue on those sites grew steadily.
Publishers invested in “new media” teams and web, analytics and SEO technologies for the first time. Confidence was high that search engines needed heritage publishers as partners to make sure their audiences could trust the new entrants, and that the traffic would continue to flow.
Mobile is the future platform, print endgame gets closer (c.2007-2010)
Soon it became clear that a new form factor had arrived, and that a “smart” phone could rival the desktop for attention. The iPhone led, SonyEricsson, Motorola and Nokia competed. Screens were small but audiences grew fast and publishers invested in new teams that could code for mobile.
2008 was an inflection point. The financial crisis hit and hit hard. Circulation and ad revenues from print nosedived, and would never return to the same levels. At the same time the Apple App Store launched, and the early adopter news brands launched ‘apps’ for the first time as a new form of indirect publishing - branded, curated and contained, but according to Apple guidelines and subject to their inspection.
Tablets bring subscriptions, digital model forks both direct and indirect (c.2010-2014)
The rise of paid apps meant that users had a new wallet and a new easy way to pay for content, which they were doing with both apps and music. When the iPad launched in 2010 many publishers hoped consumers would pay for a larger screen reading experience that was “the newspaper but better”, and pay with subscriptions - both familiar experiences from the print world.
Publishers invested in new teams, technologies and invested acquisition costs, and many grew significant subscriber bases. Only a handful of brands could make this work profitably and sustainably - the subs model only worked if readers would pay a premium price which offset the loss of scale based ad revenues but also significant new costs.
To launch a subscriptions product publishers had to manage two businesses; one was a Direct to Consumer business where consumers registered with and paid the publisher, then could log in to apps and websites. The second was an Indirect business where Google or Apple took payments and granted access and held the customer relationship. Publishers favoured the first but the App Store model favoured the latter and set the entry terms for app distribution, so publishers pursued both.
Video and features for engagement, maybe in a hosted model (c.2014-2018)
YouTube, Google news and the Facebook news feed had already happened in 2006. Platforms had shown they could produce products for content that were mostly more engaging than the edition facsimile products or heavy homepages publishers were mostly producing in that time.
But by 2013 user growth for platforms slowed as there hardly anyone left in the major markets who didn’t Facebook or Google. To keep ad yields rising, more ads per user were needed, so engagement became a bigger focus.
As the mobile internet moved to the 4G standard this opened the door for richer content, particularly graphics and video. Audiences were introduced to a host of video features like Periscope, Snapchat Discover, YouTube Premium (2015), Instagram Stories, Facebook Live (2016), Facebook Watch and TikTok (2017).
This in turn opened another door for some trojan horse features in Facebook Instant Articles and Google AMP. Both claimed to improve load speed while opening up features and preferential positioning for publishers who optimised for mobile. They offered the ability to extend their own ad revenues or allow platforms to backfill the inventory. Future development to support for subscription was promised.
The trojan part was this required articles to be supplied to be hosted by Google and Facebook on their servers - another move away from direct to an indirect publishing model.
Publishers rushed to invest in video and audio and live events that the platforms promoted disproportionately, so more video was created. There were great numbers and growth, but publishers broke even at best and more of their audience time moved to the aggregated mobile experience rather than coming direct.
Cash is king (c.2018-2023)
Publishers had now proven that while they could grow audiences ‘off platform’ they could not build stable businesses there. Advertising continued to flow to the aggregators with superior scale. There needed to be a new financial footing if this trend were to continue.
The 2016 election cycle had disrupted the cosy relationship between platforms and government. Competition authorities in Australia, the UK and the US made a concerted effort to build cases to help control platform market power.
Against a backdrop of growing government intervention, the licensing era began. Google launched the Digital News Initiative then the News Showcase. Facebook launched Facebook News. Apple launched News+. All had a form of licence payments for content or revenue share for news and magazine publishers.
In Australia the News Media Bargaining Code in 2021 gave a government backstop to negotiations for payment in Australia. Two years later Canada followed suit, with the government leading negotiations.
Many publishers signed deals with Facebook and Google where money changed hands in exchange for partnership commitments and good PR. Unsurprisingly the platforms are signalling that the deals will not be renewed.
It’s been quite a journey. Across five waves of digital innovation a new landscape was constructed in which platforms moved from marketplaces to gatekeepers, and publishers moved from digitally curious to captured content providers who had lost control of their future distribution.
What can we learn from publisher strategies and tactics during this twenty year period? Here’s eight to get started with:
Publisher focus has been gradually moving from the print model (profitable then challenged) to the digital model (incremental then critical). The major strategic positions gained by the platforms came early when attention was limited and digital revenues were a bonus.
Platform M&A in this period was transformational (see Youtube / Double Click / Insta). By contrast, publisher M&A has been consistently defensive, either consolidating publishing houses or diversifying away from core publishing
Publishers deserve credit for innovating in storytelling and formats and becoming multiformat mobile publishers. To do this they have built new teams, new skills and adopted new mindsets for publishing. This has not been easy inside publishing businesses and much management energy has been required.
To achieve this, publishers have often put their brightest people on new platform partnerships. They have helped build workflows, ethical standards and provided testing resources and feedback for aggregator products. The resulting products have either then become open to the general creator population or faded away.
Publishers have managed their limited technical resources between Owned and Operated products or support for Indirect platforms. The overhead of managing algorithm updates and iOS upgrades has increased, challenging investment in the development of unique owned and direct products. Consequently very few publishers have taken the breath away with their products for mobile.
Platforms have been able to increase scale and advertising revenue returns which reinforce their core products (search, social and smartphone). Publishers have seen an increase in scope and complexity in areas which compete with monetising their core product (news and lifestyle content).
Subscriptions have worked for a few global players but most have found it hard to balance premium subs with maximising ad revenues - the trade offs in scale and access make this complex
Publishers have not been able to provide a united negotiating position. They are naturally competitive, entrepreneurial and over-focused on market share gains at the expense of traditional competitors. This leads to individual publishers signing unilateral deals with platforms to be launch partners for new things. They are bound by competition rules which prevent collective bargaining, and their trade bodies are only able to get so far.
I’m sure there are more conclusions to be drawn, and none of this should detract from the work that so many journalists, publishers and support teams put in during a twenty year period in which almost everything changed, and at incredible speed.
What now? Well we see these same patterns playing out as the AI era evolves, with similar choices and existential threats. Decision makers in publishing now have mostly seen this play out once. They are unlikely to be seduced again by promises of traffic in return for handing over the keys to the content crown jewels. Round two begins..