The Danger of Zero-Sum Publishing - For Me to Win, You Have to Lose
TL;DR: Users already spend their media budget on multiple subscriptions, including streaming services like Netflix, Spotify etc., as well as some news publications. But they don’t want more of the latter. The industry now runs the risk of embracing a zero-sum game where, for one publisher to win, every other publisher must lose. Rather than rely solely on subscriptions, the revenues of which just go to one outlet, publishers must embrace low-friction models that provide an alternative, ongoing revenue stream without cannibalizing existing monetization streams.
Retrieved from: http://mimiandeunice.com/2011/07/14/zero-sum-economics/
“Zero-sum or distributive situations are ones in which there can be only one winner or where the parties are attempting to get the larger share or piece of a fixed resource, such as an amount of raw material, money, time, and the like.” - Roy J. Lewicki et al.
In Essentials of Negotiation, the shorter version of the seminal work Negotiation, Prof. Roy Lewicki and his colleagues discuss the idea of zero-sum situations - ones in which of all the parties involved, only one can win while the rest must lose. It’s presented as one of the two most common situations where negotiations come in to play, but in reality it is just as applicable to any number of scenarios - including that in which the publishing industry finds itself today.
In an earlier blog post, we referenced one of the key takeaways from this year’s GEN Summit - the need to compete for consumers’ dollars with music and film platforms - and the challenges this presents to publishers. The Reuters Institute Digital News Report 2019, which was officially presented at the event, noted this trend while going on to caution publishers that users are, in turn, less and less happy to pay for more than one monthly news subscription to any platform or service.
Should this trend of users increasingly proving unwilling to pay for multiple subscriptions each month persist, the industry finds itself in a dangerous position if it relies exclusively on subscriptions for revenue generation - a zero-sum situation.
If a reader is only going to pay for a subscription to their favorite news publication, then precisely zero revenue will be available for anyone else. If all they are offering are subscriptions, then Publication A gets everything, and Publications B through Z get nothing at all. Out another way, it means that every publisher is vying with every other publisher out there to capture each user’s revenue. For one publication to win, everyone else has to lose.
This is a dangerous proposition, and one can imagine a scenario where smaller publishers increasingly lose out of any market share when attempting to compete against the mainstream media. This in turn reduces the variety and quality of reporting available to audiences around the world.
It also makes the case for why we need to provide different ways for people to contribute to multiple publications each month. Rather than rely solely on subscriptions, the revenues of which just go to one outlet, our industry as a whole needs to embrace alternative, low-friction models, such as donations, contributions, and the ability to purchase individual articles or memberships. Low-friction models are slower to generating revenue than subscriptions, but they build over time, they do not cannibalize existing monetization streams, and they continue to engage new customers - in particular those audiences who might never have considered a full subscription. As a result they build an additional revenue stream that, once it ramps up, keeps on coming.
The democratization of media spend will not only prove more sustainable but it will also help expand revenues in the future: low friction models make it very easy for users to take that first step from being a reader to being a first-time paying customer.
Want to learn more? Contact us to start a conversation!