Avoiding digital squirrels in publishing

For those magazines and pure-play digital content companies who relied solely on social media for their business model, RIP. The publishing industry has been lead astray by many a squirrel when it comes to technology; virtual reality, augmented reality and so on. As publishers rush to take advantage of any opportunity in the digital world to grow audience and find new revenue streams, it can be tempting indeed. But it can be costly as the rush to Augmented Reality has proven.
How to experiment cautiously with new technologies
While publishers should take advantage of new and emerging technologies, we advocate for a more experimental approach that can reduce risks such as over-spending, jumping on before a market is proven and doing it the wrong way that loses advertisers and audience. Here’s our suggested approach;
  1. Consider the consumer investment: the problem, for example, with Virtual Reality (VR) is that it is expensive for consumers. The purchase of the right console to experience it, the headset and so on is currently very expensive. So the audience is limited. Today, VR would not be a good investment for most publishers. If the technology is expensive for the consumer with many barriers of entry, it’s not a wise investment time.
  2. Explore the market: If you’ve determined the cost of entry for the technology is viable for mass consumer adoption, you’ll next want to assess the market viability. Technologies that are in the very early stages will have a smaller market, even if it’s affordable. Getting in at a very early stage, like cryptocurrency, is incredibly risky. It may seem really cool, but to be financially viable for a publisher, it should have enough market potential. It’s often best to monitor the market for a little while.

  3. Understand the cost of maintenance: It can be expensive just to deploy a solution with a new technology, much like websites years ago and mobile apps. You’ll also need to consider what the ongoing support costs are versus the expected ROI. Business models with new technologies are often unknown and any forecast will be wrong. Guaranteed.
One approach is, as we’ve explored in a prior post, to set up an innovation or experimentation team that brings together your technology team, editorial and sales/marketing. Smaller investments can be made deployed that are designed to fail fast or succeed enough to warrant a bigger investment. You may also be approached by a startup to partner at “no cost”, but there is a cost; to your brand reputation and those in your organisation that have to spend time setting it up, deploying and managing the solution.
We always advocate for experimentation and innovation with new technologies, but for publishers struggling to find new business models, a more thought-out approach can reduce high-risk losses and brand damage.

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