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Plus Report - By Thomas Baekdal - November 2017

The Problem with Digital Economics is that the Potential is Different

Let's talk about money, or specifically the revenue potential for publishers transitioning to a digital only future.

One of the fundamental problems we have seen over the past many years, is that, when you look at the revenue potential for traditional publications and the market they are in, and you then compare this to the new models of digital native publishing, they don't match up.

This has a really big impact on why we see so little real change or innovation in the media industry. Because, even though everyone I talk with knows that the world has changed, actually doing something about it is really hard if the money isn't going to come in the same way or at the same level.

So, in this article we are going explore this mismatch in revenue potential, what this means for traditional magazines and their future outlook, and several examples of what publishers should focus on instead.

The money coming in hasn't changed

Before we start, I want to make a very important point, which is that the revenue coming in hasn't actually gone down. What has changed is how that revenue is allocated.

As we all know, there are generally two different forms of revenue going to the media. One is the amount of consumer spending on media, and the other is the amount that brands spend on advertising.

If you look at this for traditional publications, you kind of get the sense that both have gone through a dramatic decline over the past few years, but the reality is quite different.

 
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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé

 

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