Content First Vs. Digital First

By Paul Jacobs

Many of you were apparently motivated last week when Fred applied the key learnings of a new book, The Octopus Organization, to radio. The book is a solid read that provides a different approach to a linear business.

The theory behind the book goes like this: “In order for businesses and industries to survive—and thrive—in today’s complex ecosystem, they must alter their ‘antipatterns’—deep-seated habits that compromise clarity, ownership, and curiosity.” It resonated with me because it’s a theory I’ve been espousing for many years.

The authors, Jana Werner and Phil Le-Brun, posit that the world of business is no longer linear, predictable, or scalable. Instead, change is organic. Their main point—especially for radio—is that industry organizations must accelerate their investment in changing their model even faster than what is currently happening. While Digital First makes a lot of sense, I’m concerned that the space is getting more crowded, competitive, and yes, less special by the day.

Many years ago we laid out a new model for visualizing what the radio business could become. It was one where driving audience to generate ratings through more radio listening was no longer the ultimate goal. You know, the old idea of “If we could just get our customers to listen 15 more minutes in midday…”

In its place is a model that’s similar to the Octopus Org theory of developing a variety of “doorways” into the organization by the creation of new content and distribution that extends well outside of the way radio stations have traditionally functioned:

While it doesn’t look exactly like an octopus, it has tentacles and utilizes the same theory. For radio organizations—commercial, public, and Christian—they have an imperative to invest in and experiment with new content models. This makes good sense whether this content appeals to their existing audience or speaks to a very different consumer. For this new look “octa org,” audience growth continues to be the path to revenue growth but directed to different distribution buckets and measured with different metrics.

There are some theorists in the wild who believe content has become passé—that true organizational growth now revolves around community. But without content to rally around, there is no community, or it isn’t likely to be a big enough community to generate profits as well as promoting sustainability.

But don’t take my word for it. The theory is being proven out every day by perhaps the most innovative media organization of our time—The New York Times Company. And they’ve done it while being shackled to a dying industry: newspapers.

Over a decade ago, the Times team realized what should have been obvious—the newspaper business was in the throes of a death spiral—and it was accelerating at an alarmingly rapid pace. They were being surrounded by the Internet from all sides—Craigslist destroyed their classified business, social media usurped community announcements, blogs and newsletters allowed anyone and everyone to become self-publishers, and their advertising base got eaten alive by the thousands of online sources. And the proliferation of available and free online news made their business model look out of date for everyone except their core readers who still valued journalism, many of whom trotted down the driveway in the morning to learn what’s happening.

So what did The Times do? They became an octopus and went way outside their comfort zone with word games (Wordle, Spelling Bee, Connections), with food (Cooking), and even with sports (The Athletic). With only tangential appeal to their readership, these businesses skyrocketed. Here’s what their model looked like in 2022. Those “gold bars” are impressive, while the gray bars are frightening, yet familiar.

It’s easy to see in this chart why they pivoted so strongly into new content/revenue models—print circulation was on a slow, inexorable slide, and advertising was cratering. But the digital subscription model was exploding, and not just for the online version of the old gray lady.

So you can imagine how curious I was when I saw an updated version of their performance since they began to bundle their products, similar to other categories. As reported in a recent Sherwood News piece, “In its third-quarter earnings last week, The Times reported that it had added 460,000 digital-only subscribers in the last three months, as bundles and single-product subscribers to products like Cooking and Games helped offset the 130,000 news-only subs it lost over Q3. For context, there are just ~570,000 print-only NYT subscribers left, after 10,000 jumped ship in the same period.”

For The New York Times Company, those Games and Cooking content verticals are clearly not one-hit wonders. And they have spawned communities of their own, especially among those of us who play various games with people all over the U.S. and the world.

By investing in a “Content First” strategy rather than tethering their future to merely digital distribution, The Times has created significantly new profit centers that don’t require journalists, printing presses, or home delivery.

Sherwood News also posted an updated chart on where The Times’s revenue is coming from and comes from. Digital-only subscriptions have jumped from 42% to 52% while advertising has fallen from 23% to 19%. It certainly looks like they are a different type of “octopus” today.

The table is set for radio organizations to accept the challenge of focus and innovation by considering the following:

Try stuff. Sometimes the best ideas are spawned from small ideas. Take your team out of the building to a completely different brainstorming environment—an amusement park, a stadium, the green room at a local concert venue—and let them start throwing out ideas. New concepts can be based on their own experiences and interests, something they’ve read, or their perception of what’s hot. You’ll be amazed by some of their concepts.

Empower your team (all of them!). Just because you may be a manager or a leader, sometimes the best ideas can come from unlikely places. I was once moderating a company meeting discussing podcasts and it turned out the middle-aged traffic manager was quietly creating the most-listened-to podcast in their cluster. And no one knew it. We all know younger staffers (even if they are interns) have different experiences and perspectives than us veterans. Turn them loose and see what happens. You never know who might emerge as the BSH (the Brain Storm Hero) of your session.

Test, research, apply, repeat. While the best ideas are usually organic, you can course correct them by tuning into their early adopters. If you have an email database, you have the makings of a test marketing program. Bring some listeners into the station or talk to them via Zoom—not based on their radio listening habits but on their outside interests—and bounce ideas off of them.

Expand your horizons. This might cost a little bit, but probably a lot less than the decline in traditional revenue your station or company is experiencing. Standing pat is probably the worst available option right now, and it’s never too late to depend on your core skills—content creation—to come up with your own Wordle.

It is still about content. Often, executives like to get to the monetization part before the content has had enough time to be refined and to connect with consumers. With every distribution element, it all comes back to how appealing, unique, and compelling is the content.

You can’t do it all. So don’t try. Limit your activities to content where you have expertise and proven wins. This might mean content that revolves around your existing format or area of expertise, or the expertise of a staffer that might be way outside of your format’s boundaries (what does Cooking have to do with climate change, Putin, or inflation?).
You won’t know until you try.

We live in an amazing time. A few decades ago, the thought of a radio station going outside of “radio” or its format boundaries to appeal to completely different people was not only unthinkable, but it was also costly. Today, the ability to create, experiment, succeed, or fail can happen quickly, while the cost of distribution is incredibly low.

As traditional radio revenue is falling, it’s time to fire up the Octopus strategy.

Paul Jacobs is the vice president and general manager of Jacobs Media, a consulting firm specializing in Rock formats.