Media Briefing: Media execs set sights on non-ad revenue streams in 2024

And while publishers are still counting on advertising to account for a significant share of their revenue this year, they acknowledge that it is not a reliable revenue stream (is it ever?). Many publishers appear to be betting on their events businesses to make up any advertising losses, but other pathways to growth are revealing themselves in what promises to be a busy year between elections, the Olympics and other major world events. 

Here’s what publishers had to say about their plans for revenue diversification and growth in 2024: 

The second wave platform partnerships

After the money dried up from content deals with Facebook, X, Snapchat and Google — thanks to some of the tech behemoths moving away from news while others started favoring content creators over publishers — a second wave of platforms sensed an opportunity to link up with media companies desperate for extra revenue.

LinkedIn, Pinterest and OpenAI are just a few of the companies that kicked off new content deal programs with publishers in 2023 and according to three media execs, those deals offer significant opportunity in 2024 as well. 

Last summer, Pinterest launched its Red Standard Program, which compensates publishers for publishing more videos on the platform. As of October, 34 media companies were a part of the program, some of those publishers allowed Pinterest to sell branded content and on-platform campaigns on their behalf. While only a select number of publishers were invited to the program at launch, Pinterest hopes to expand it globally, though Jeremy Jankowski, Pinterest’s strategic partner lead, did not provide a timeline.

In December, OpenAI signed a deal with Axel Springer in which the AI technology company would pay the publisher to use the content from its media portfolio, including Business Insider and Politico, to generate responses in ChatGPT as well as train its AI tools. 

Dow Jones is part of a “small handful” of publishers taking part in LinkedIn’s new video amplification partnership program, according to Josh Stinchcomb, global CRO of The Wall Street Journal. Starting this month, WSJ will produce a number of original videos for LinkedIn and will sell branded sponsorships and pre-roll ads against the content using LinkedIn’s audience targeting. While Stinchcomb’s team is tasked with selling the inventory themselves during the beta phase, the two companies collaborate when it comes to audience data. He did not disclose the revenue agreement for this partnership or provide details on data sharing.

Time inked new deals with vendors in 2023, which are expected to continue into the new year, according to CEO Jessica Sibley. Working with Taboola, Time launched its product recommendation and review commerce brand, Time Stamped, in May. In September, the company launched its first-ever ranked, quantitative list franchises through a partnership with Statista. The lists include ​​the World’s Best Companies list and the Best Colleges for Future Leaders list.

“We’ve seen nearly 20% revenue growth with some of those new strategic partnerships,” Sibley said, though she declined to share the specific terms of the partnerships with either company or exact revenue figures. 

And finally, The Independent’s global COO and president of North America, Zach Leonard, said he was particularly excited about expanding the company’s U.K. sports betting partnership with Gambling.com to the U.S. in 2024 once the Independent’s .com domain is established in the U.S. 

Commerce on the come-up

Though publishers didn’t shout from the rooftops about their commerce businesses’ success in 2023, there were – and still are – some highlights from the year that execs are hopeful will continue into 2024.  

Buy Side, WSJ’s product recommendation and review site that launched in June 2022, saw particular success around its personal finance recommendation articles this past year, according to Stinchcomb. The e-commerce site experienced 2X revenue growth in 2023 (compared to its first partial year) he said, which, while largely due to improving the product and SEO skills, was also in part thanks to high interest rates on savings accounts, certificate of deposits and other financial instruments covered in Buy Side’s articles.

Meanwhile, The Independent’s commerce revenue grew by 25% year over year in 2023 and is expected to grow upwards of 47% in 2024, according to Leonard. He added that the publisher’s “best of” product lists, exclusive discount offers for readers and e-commerce integrations into branded content were particular boons to the commerce business last year.

Subscriptions stay steady 

Given 2024 is a major election in the U.S. and in many other countries, the hope is that publishers’ subscription businesses will see a bump, like in previous election cycles. And while that may depend on which candidates end up on the ballots, 2023 left some publishers in positive spirits about the growth of subscriptions before the election cycle really even kicked off in earnest. 

The Atlantic’s CEO Nick Thompson said that the publication’s subscription revenue was up year over year, making up more than half of the company’s overall revenue, though he declined to share hard numbers. Part of the strategy included raising the cost of the subscription and “[changing] the meter rules constantly through the year, adjusting for audience [and] how people were reacting to certain stories,” he said. 

Both Dow Jones and The New York Times reported steady subscription growth over the year in their earnings reports, with the Times even reaching its goal of 10 million total subscribers in the third quarter. 

While Leonard said that The Independent wants to maintain that readers have access to content without paying, if they so choose, subscriptions still do exist within the business, though a small part. What he is exploring in 2024, however, is replicating a similar model to The Guardian this year, which brings in reader revenue via donations and philanthropic funds from various institutions and organizations. 

Forbes’ CRO Sherry Philips said that her team is eyeing an opportunity for creating membership packages this year, such as creating higher tiers within a specific category like CMOs or CIOs. This would include joining events with specific newsletters that are created for subscribers in said specific role, she said.

Falling back on owned & operated 

Given the rapid declines of traffic referrals in 2023 from Facebook, X and the like, some publishers are choosing to put more attention on the channels that they can maintain control over.

Semafor’s co-founder and CEO Justin Smith said on a recent episode of the Digiday Podcast that the media startup is going to spend its second year focusing on the website to make it more of a destination for audiences. During its first year, Semafor mainly focused on events and newsletters.

For Bloomberg Media’s CRO Christine Cook, a focus on O&O means reframing newsletters from an “ugly stepchild” product to something that can be used effectively in cross-channel campaigns. “We had to elevate and do a lot of learning, teaching our clients that newsletters were like the portable web,” she said. 

BuzzFeed’s CEO Jonah Peretti said during the company’s Q3 earnings call in November that his team will be “laser-focused on driving traffic directly to our owned and operated websites and apps.” One way was by adding more gaming and other engaging features in-app, he said. 

Thompson said that while The Atlantic will also invest in its app and add some “cool changes in Q1,” it ranks moderately among all of the other priorities that the company has going on for 2024.

“It’s hard to build a massive app audience in 2023 so it’s not a gigantic area [of focus],” Thompson said.

What we’ve heard

“It’s been top of mind for the last five-plus years. It feels like we’re ready and I’m thankful to be in sports.”

— Sebastian Tomich, chief commercial officer of The Athletic, regarding Google removing third-party cookies from 1% of its Chrome browser traffic starting today.

Publishers’ continued fight to protect IP from generative AI 

The New York Times sued OpenAI (the creators of ChatGPT) and Microsoft for copyright infringement on Dec. 27, The Times reported. It’s arguably the biggest move yet by a publisher to protect their content from being used for free by tech companies to train their generative artificial intelligence systems, and is likely just the beginning of a process that could shape how copyrighted content is used by AI tech companies.

The nearly 70-page lawsuit claims that millions of articles published by The Times were used to train AI-powered chatbots. Doing so means OpenAI is competing with The Times, using information from their reporting to answer users’ questions and leaving little incentive for a user to visit their site, it claims. The Times states in the lawsuit that this takes a toll on their business by reducing opportunities for digital advertising and subscription revenue.

But tech companies say this process is covered by fair use. Copyright law has always been vague, and how it applies to generative AI tools is no exception. The outcome of this lawsuit will likely be the first determination by a court on whether generative AI tools can be trained on a publisher’s copyrighted work without their consent.

Publishing execs have been worried about this and called for regulation for the better part of last year. IAC chairman Barry Diller has advocated for redefining copyright law and fair use, and is leading a consortium of publishers negotiating for payments from generative AI companies. (The New York Times and News Corp dropped out of the coalition last summer.)

The Times said in its lawsuit that it had been negotiating with OpenAI since April 2023 on a resolution, but was unhappy with the progress. However, OpenAI has had success with other publishers. The Associated Press struck a deal in July, where OpenAI is paying to license part of AP’s text archive to train its models. Axel Springer, which owns Politico and Business Insider, landed a three-year deal with OpenAI in December, with Bloomberg reporting that OpenAI is paying the media company “tens of millions of euros.” The Times also reported last month that publishers like Gannett, News Corp and IAC have been in talks with OpenAI.

Nick Thompson, CEO of The Atlantic, told Digiday he was “definitely” open to chatting with AI companies this year about similar licensing deals. “I think more publishers will make those licensing deals [in 2024],” he said.

Apple is also starting to negotiate deals with publishers to use their content to develop their generative AI systems, The Times reported in December. Apple is reportedly offering at least $50 million in multi-year licensing deals, and has contacted Condé Nast, NBC News and IAC.

It remains to be seen if the Times’ lawsuit will mean companies like OpenAI will pick up the pace, signing more licensing deals with publishers to appease them before additional suits can land on their doorsteps. – Sara Guaglione. Kayleigh Barber contributed reporting.

Numbers to know

2.5: The percentage raise union Washington Post staffers will receive in April if the tentative agreement between leadership and The Washington Post Guild is ratified. The employees represented by the union will also receive an immediate raise of $30 per week per the deal.

3: The number of major media companies, including IAC, Gannett and News Corp, that are reportedly in negotiations with OpenAI to strike up a licensing deal that allows the artificial intelligence company to use their content. 

~24: The number of employees that media startup The Messenger is expected to lay off this week due to dwindling cash reserves.

What we’ve covered

After a tough year, podcast execs say 2024 will bring in new advertisers amid stiff competition for listeners:

• Despite the ghost of 2023 following them into the new year, heads of podcasts at five companies were optimistic about 2024.
• While there are positive signals of continued audience growth, more ad dollars being funneled into the medium and opportunities to expand shows into franchises, podcast execs say they still face stiff competition. 

Read more about the outlook for podcasting in 2024 here.

How modern media companies are organizing their sales operations:

• Over the past couple of years, chief revenue officers have shared how they’re reshaping their sales divisions to respond to this modern, if not tumultuous, ad market. 
• From implementing generative AI tools into the workflow to adding seller incentives to taking a categorical approach versus a brand approach for client management, here is a rundown of what a modern media company’s sales organization looks like.

Learn more about the recent changes to publishers’ sales operations here.

Newsroom leaders will take a more cautious approach to generative AI in 2024:

• “AI,” “ChatGPT” and “hallucinate” were all deemed the “words of the year” in 2023, as advancements in generative artificial intelligence technology swept across the world.
• Digiday spoke to four heads of editorial teams — from Business Insider to Trusted Media Brands — to hear how they will approach the technology next year.

Hear from media execs about how they’re approaching generative AI in the new year here.

Publishers’ efforts to diversify their workforces slows in 2023, but heads of DEI point to progress:

• It’s been over three years since the media industry’s white and male-dominant composition was put under a microscope, at which point publishers appointed diversity, equity and inclusion leaders, expanded employee resource groups, led hundreds of DEI training sessions and committed to numerous goals to diversify their workforces.
• But almost four years later, some of those efforts — at least the more public ones — seem to have lost their steam.

See how publishers’ diversity, equity and inclusion efforts have progressed since 2020 here.

Media matchmakers – The 2024 uncoupling edition:

• Consolidated media was the name of the game for the better part of a decade as publishers looked at scale as a way to compete with the behemoth platforms for ad revenue. 
• But the following refreeze of advertising budgets made 2022 and 2023 less-than-stellar for revenue, leaving some publishers possibly regretting their acquisitions, expansions and going public via SPAC. 

Take a look at some of my predictions for which media company pairings will experience an uncoupling in 2024 here.

What we’re reading

Ozy sues Semafor’s Ben Smith over stolen trade secrets: 

Insider reported that Ozy filed a lawsuit against BuzzFeed, Semafor and Ben Smith, claiming that Smith (former BuzzFeed editor and Semafor’s co-founder) stole trade secrets about the company’s operations that he learned when BuzzFeed considered acquiring Ozy in 2019.

The Messenger’s president, Richard ‘Mad Dog’ Beckman, resigns: 

In addition to the roughly two dozen layoffs that are expected to hit The Messenger this week, the nonpartisan media start-up is also losing its president Richard Beckman at the end of the month, according to The Daily Beast. Health problems is the reported reason for Beckman’s departure, though a couple of staffers previously quit The Messenger due to clashes with Beckman. 

Cheddar News sold and furloughs follow:  

Altice USA sold Cheddar News to Archetype last week, according to The Wall Street Journal, and following that news, The New York Times reported this week that a number of its employees were placed on unpaid leave on Tuesday.

CNN’s chief digital officer departs as new CEO works on a new digital strategy: 

After joining CNN in Oct 2022 under former CEO Chris Licht, Athan Stephanopoulos is stepping down from his role as CDO of the news media company, according to The Hollywood Reporter. A new structure for the company’s digital arm is expected to follow the leadership change in the next few weeks.