With an increasing number of publishers eyeing up the digital market, 4C’s Guy Allen takes a look at the challenges facing companies looking to make the switch from print to online.This week Encyclopaedia Britannica, Inc. announced that its flagship publication, the Encyclopaedia Britannica, would no longer be issued in print. The encyclopaedia will now be available exclusively in a digital format, a move which its publishers say will allow them to constantly update and improve their database.The Long Road to Profitability
Many companies which produce both print and digital content are struggling to balance the declining revenue from print editions with the disproportionate rate of growth in online revenue. The current business models being employed by publishers in relation to their online offerings often fail to compensate for the decrease in margin from their print operations. In addition it is difficult to predict when and how investments being made in online will translate into revenue.Encyclopaedia Britannica, Inc. was one of the first companies to be affected by digital publishing and has gradually changed from a reference provider to a supplier of online educational products and services. Jorge Cauz, President of Encyclopedia Britannica, Inc., told The Guardian; “We are the only company that I know of, so far, that made the transition from traditional media to the digital sphere, and managed to be profitable and to grow.” Other publishers, particularly in the news industry, are struggling to manage the shift towards online.Managing the Switch
The increasing importance of having an online business model means it is imperative for publishers to act now rather than later. Due to the unpredictability currently surrounding the digital market place it is essential that publishers design flexible models of costs which are able to withstand turbulence within the sector. In this context companies must also implement a process to measure the ROI generated by their digital business and compare results with those of competitors.The costs of running the traditional print element of the business must also be minimised. This can be done by analysing best practice levels within the sector and outsourcing any areas which are no longer cost effective to perform in-house.The Cost Imperative
Aegis Group’s media agency, Carat, has predicted that 2013 will be the year in which global digital advertising spend will overtake newspaper print revenues. The transition towards online is happening now and it is happening fast. Companies must implement changes in their businesses models as soon as possible to avoid being left behind by their competitors.