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New earnings for new media

SPIMF hosted a panel discussion titled Monetizing New Media on the Internet

The theme of the second working day of the Media Forum in St. Petersburg was digital media and the Internet. How you can earn profits by the monetization of content, and how much you can expect to earn, were the focus of a panel discussion that was attended by journalist Vladimir Borovoy from Kommersant-Money.

The panel discussion "Monetizing New Media on the Internet" was just as interesting in terms of its subject matter - after all, who doesnt want to learn how to make money through Internet publishing - as it was in the range of participants. First of all, there was Ben Huh, CEO of The Cheezburger Network, a well-known entity in the online community that sprung from a site consisting primarily of cat photos and videos of people falling down called Can I Has Cheezburger. Ben has managed this company for over seven years, and has recently helped its indicators reach record levels, with half a billion page views per month; this in turn has led to $35 million in new investments. According to Ben, his companys achievements can be attributed to several important factors. First, he and his partners quickly realized that they could make the biggest earnings by collecting small amounts of money from a large number of people. Secondly, they rely on users to create content, providing them with all the necessary tools to combine funny pictures with text - at first the tools were created for desktop computers, then for smartphones and tablets. Thirdly, they began to explore new ways of creating and delivering funny content, or as Ben puts it, "we focused on what we did best." Cheezburger's main source of income is advertising; other projects, including the publication of books (two of them are on the The New York Times bestseller list) bring in no more than 20% of their income. In response to a question about the kinds of goods and services that can be successfully advertised on cat-themed websites, Ben said that such products should be "endemic," in other words, products that are on the same wavelength as a given online community. "On photo-based sites, he advises, it makes sense to advertise camera equipment."

Next to present was Vladimir Nedorezov, from Hearst Shkulev Media. A slideshow accompanied his voice, with screenshots from Maxim magazines mobile application, which caused a bit of a stir in the hall. According to Vladimir, there are two problems in Russia facing the monetization of new media. Problem number one - a viewing audience that is moving too slowly and incrementally toward digital content. Problem number two - advertisers who have absolutely no desire to dig into the special requirements of digital, and instead simply fill their iPad apps with the same advertisements as the magazine - no animation, no interactivity, just pictures with text, which is truly annoying to the spoiled end consumer. Despite having to deal with the difficulties of re-educating advertisers and having to fight for each new digital subscriber to Maxim, the company nevertheless manages to pull in seven-figure ruble earnings - mainly through its mobile applications and special projects.

Further on in the discussion about new media and money, Snob.ru came up. Presenter Ksenia Chudinova confirmed that in terms of how Snob.ru generates income, it is no different from the other companies, earning about 88% through advertising, while its costly subscriptions, at 25 thousand rubles per year, bring in no more than 5%. As you can guess from the name, Snob has placed its bets on the allure of exclusivity and its club system, so although there are only a little more than 3,000 participants in the project (active participants are about 1,000 less than that), this is enough to ensure about 12 million hits every month, quite impressive considering that a large portion of the material is in the paid section (for "club" members only).

The auditorium suddenly perked up during Boris Mirochnik's presentation As head of the YouTube channel Yougifted, he told the audience that many folks are a bit late on the scene in terms of monetizing their media on the Internet (especially those using a paid content model, or a paywall, which the content hides behind, and other tricks aimed at snatching a penny from a user's pocket). Meanwhile, he and his partners live on YouTube, which is full of content that is not only useful but also free, the reason why there is savage competition for views and for subscribers. After four years of monitoring and observing his YouTube channel audience, Boris has come to the conclusion that media, particularly digital media, still doesnt want to live in strict accordance with the laws of business - one constantly has to add a personal dimension. This is especially true on YouTube, where users can send instant feedback to the owner of the channel, and this has to be taken into account when making business decisions. In particular, if too much of an "anything goes" attitude is conveyed, and you let yourself become an advertisement for a big brand (most often the brand turns out to be some kind of potato chip, which is why people who do this are called "chip-eaters"), then you will condemn yourself to a mass exit of viewers, and to the myriad difficulties that follow. But if your goal is not just to grab money from advertisers by showing the audience entertaining videos, but rather to use video to change people's lives (Boris Mirochnik says this happens all the time, and has even happened to him personally), then not only will you get a tremendous sense of moral satisfaction, you'll also be connecting motivated users to your crowdfunding project.

Mirochnik ended his upbeat performance with a rapid departure for lunch, and the discussion continued at an increased pace because everyone else wanted to eat, too. The vector of attention shifted to various methods of delivering content, as soon as it became clear to everyone that digital media at this point can only survive on advertising money. Catherine Bazilevskaya (Look At Me) spoke proudly about an elegant solution that has enabled her company's websites to look good on the Internet: instead of needing to have applications for various mobile operating systems, designers have created layouts for sites so that they look fantastic on all browsers - desktops, smartphones and tablets too. The product they developed turned out to be so successful that LAM turned it into an editing program, which they intend to sell to interested websites. Along with this program, they will offer the services of a special editorial manager whose duty it will be to streamline the daily operations of a team of journalists (at this point, the journalists in the room became noticeably perturbed).

Dmitry Navosha, the general director of Sports.ru, confidently explained that right now, the most important thing for new media to focus on is not so much the creation of content, as the development of methods for delivering it, if only because two-thirds of the advertising money in Russia goes not to content generators, but rather to content distributors. And access is the most important thing, not to mention fragmentation, insofar as everyone's demand is different, and it's impossible to grab and pull in viewers, for example, with just the content on the homepage of a website. Dmitry gave the example of his own company, which strives to personalize how content is delivered as much as possible - so that, in plain terms, a Manchester United fan will be able, through the site and mobile application, to get absolutely all the information there is about his favorite team as soon as it appears on the site. Thanks to this, the advertising toolkit which has ended up in the hands of Sports.ru has grown threefold. At present the company has about 50,000 content streams, a fairly large percent of which is user-generated, and the financial returns from it have been large enough that the company's directors arent particularly worried about the current decrease in advertising rates. And Novoshas words were affirmed by Ben Huh, who cautioned against being too dependent on the platforms of other companies; you have to build your own technologies for the delivery of content. Otherwise, the future won't be very bright at all.

Vladimir Borovoy, Kommersant-Money


Georgy Poltavchenko, Governor of Saint Petersburg I am thrilled to welcome the leaders of the international media industry to our city, which we hope will become an important venue for business development and interaction. The Media Forum has also prepared an exceptional program of film and TV premieres for the citizens of Saint Petersburg.
Vadim Zingman, Aeroflot deputy director for customer service The St. Petersburg Media Forum is just starting out but I am sure that it will become one of the most important events for the Russian and world media industries. We wish all the SPIMF participants a fruitful time, successful new partnerships and a fresh sense of perspective.

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