re-shaping online news and media - memorial lecture 2015

Re-shaping the online media industry The sh i f t f r om des t ina t i on to d i s t r i bu ted med ia

Jimmy Maymann

President, Content and Consumer ��

Brands, AOL

@maymann

2

I will use my time as CEO of the Huffington Post as a case study for changes in online media

Director and Global Discipline Head, Leo Burnett

Global responsibility for all client’s ‘New Media’ touchpoints

Co-founder, CEO, Chairman GoViral

Co-founded premier branded video partner for publishers

CEO The Huffington Post

Expanded brand to 15 international markets while growing new business opportunities

President, Content and Consumer Brands AOL

Leading development of AOL’s content strategy and OTT across portfolio of brands

2000 – 2005

2006 – 2011

2012 - 2015

2015 – current

Focus of today

The online media industry has changed rapidly, undergoing four distinct shifts

Launch 2005

From desktop to mobile

DEVICE SHIFT 2

From text to video

FORMAT SHIFT 3

Direct mid-1990s

Social 2010

Search mid-2000s

SOURCE OF CONSUMPTION SHIFT 1

PLATFORM CONSUMPTION SHIFT 4

Distributed Media 2015

Source shift: Technological advances fundamentally changed content discovery

1

Direct mid-1990s

Social 2010

Search mid-2000s


5

Annual Google search queries (billions)

0

200

400

600

800

1000

1200

1400

2000 2004 2008 2012

9B 86.1B

584.5B

1,216B

GOOGLE SEARCH INNOVATIONS

2001

PageRank

Algorithm ranks sites based on relevance

2007

Universal Blends results like Images and News

2009

Real-‐Time Latest from social media, blogs etc

56% growth each year

SEARCH ACTIVITY EXPLODES ON THE INTERNET AS IT BECOMES A MORE EFFECTIVE WAY TO FIND INFORMATION

48%

29%

15%

6%

2%

AS A RESULT, DIRECT TRAFFIC BECOMES LESS IMPORTANT AS A SOURCE OF TRAFFIC

Organic search

Direct

Referrals

Paid search Social

Average source of traffic, total internet, 2008

1 Google’s algorithm made search a primary source of traffic for publishers

6

Facebook popularized social media, which becomes the number one online activity

1

Social media becomes the largest source of traffic for content sites – accounting for between 30-50% of external entries

FACEBOOK LAUNCHES IN 2004 GROWING RAPIDLY AND SPAWNING A NEW GENRE OF

ONLINE ACTIVITY…

0

200

400

600

800

1000

1200

1400

2004: Facebook launches

2006: Open to everyone

2009: Introduces ‘Likes’ & Shares

2013: Search feature enabled

2014: Adds Trending Topics & Facebook Paper

2012: Passes 1Bn Ac^ve Users

Facebook Active Users (millions)

.. AND WHILE USER GROWTH IS SLOWING, GROWTH IN NUMBER OF NETWORKS SHOWS

DIVERSITY OF USE

0

20

40

60

80

100

120

140

160

180

2008 2009 2010 2011 2012 2013 2014

US social network users (millions); logos show users over 50M

165M 158M

150M 140M

127M

109M

85M

Social media is 1 in 4 minutes spent online

7

Social discovery is more dynamic, creating higher engagement for longer

1

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Posts on-platform only

Posts on social media

Page views per hour, social media vs platform-only

12 60 48 36 24 0

Hours since posting

Additional 24 hours of ‘long tail’ engagement

Total: 41K Total: 7K

Greater opportunities to improve performance

Note: Analysis does not normalize for story selection, which would tend to favor social media as more popular stories tend to be promoted. Not expected to change result

HuffPost editors monitor post performance data in real-time

5:00 PM 7:00 PM 9:00 PM 11:00 PM 1:00 AM 3:00 AM 5:00 AM 7:00 AM 9:00 AM 11:00 AM 1:00 PM 3:00 PM 5:00 PM 7:00 PM 9:00 PM 11:00 PM 5:00 PM 7:00 PM 9:00 PM 11:00 PM 1:00 AM 3:00 AM 5:00 AM 7:00 AM 9:00 AM 11:00 AM 1:00 PM 3:00 PM 5:00 PM 7:00 PM 9:00 PM 11:00 PM

Headline revised and additional pictures added in listicle format9am

2,600,000 social actions in 24 hours

Story posted at 5pm with text and link to further information5pm

“At The Huffington Post, the process doesn’t end once you hit publish; that’s when it begins”

The New York Times Digital Innovation Report 2014

Increasingly dynamic engagement enhanced real-time data imperative

1

Device shift: Shift to mobile changes audience behaviors and content needs

Direct mid-1990s

Social Media 2010

Search mid-2000s


Launch 2005


DEVICE SHIFT 2

2

10

Mobile use accelerates to quickly become ‘the first screen’ of digital media 2

SMARTPHONES ARE NOW THE DOMINANT DEVICE FOR ACCESSING THE INTERNET, IN TERMS OF ENGAGEMENT

0%

25%

50%

75%

100%

2010 2011 2012 2013 2014

166

Desktop

278 242 201

Time spent with major media, by device (mins per day)

Mobile

303

Mobile % 14% 21% 39% 49% 56%

…A TREND WE ARE ALSO SEEING AT HUFFPOST

0%

25%

50%

75%

100%

2015

Desktop

Page views, by device

Mobile

51%

11

0

25

50

Changes in news consumption (mins per day)

Shid from desktop to mobile (increase in mobile)

Shid from print to online (decrease in print)

2006

(O

nlin

e)

2008

(M

obile

)

2014

(O

nlin

e)

2016

F (M

obile

)

42 39

2 5

2010

(O

nlin

e)

2012

(M

obile

)

32 36

25

31

21

27

14

24

7

20

4

15

3

11

Shid from desktop to mobile will be greater than shid from print to online at equivalent point in ^me

Shift to mobile shaping up as impactful than shift to print for audience behavior 2

Na^ve apps

Key traffic source: Direct

(i.e. app downloads)

Average audience size/mth: 3M UVs

Average ^me spent/mth: 113 mins/UV

Average monthly engagement: 330 mins

47% total mobile engagement

12

Mobile traffic consists of two channels, each with very different characteristics

Mobile web

Third party referrals (i.e. social networks)

39M UVs

9 mins/UV

370 mins

13x

11x

53% total mobile engagement

Note: Figures show 2014 results averaged for top 5 online news sites per comScore

2

STRATEGY VALIDATED BY CONTINUING GROWTH IN APP USAGE ACROSS INDUSTRY

0%

10%

20%

30%

40%

50%

60%

News apps

Music apps

Games apps

49%

33% 30%

Growth in ^me spent, by app category (2014)

13

ALL MAJOR PUBLISHERS HAVE RELEASED OR ARE RELEASING MULTIPLE SPECIALIZED APPS

FLAGSHIP: Full coverage

news app

NYT NOW: Breaking and

popular

THE SCOOP: NY information &

entertainment


app

CUTE OR NOT: User uploaded pet pictures and voting

NEWS APP: Original and

aggregated news


news app

VIDEO: Video-centric

coverage

REALTIME Newsfeed-based

‘news junkie’ app

Enhanced engagement responsible for rapid proliferation of news apps

2

14

68% mobile

Time on mobile

1,350M MAU

2004 2013 2006 2010 2011

Proportion of total time spent on mobile (%)

Launch year

86% mobile

290M MAU

98% mobile

300M MAU

99% mobile

20M MAU

100% mobile

100M MAU

92% mobile

80M MAU

Mobile web is driven by social media which has become increasingly mobile-focused

2

15

To counter this, we optimized our page design to enhance engagement 2

HuffPost

“ ”

IMPROVE INTERNAL ENGAGEMENT

Be<er u=lize screen size and harness tac=le func=onality of mobile touch screen to

improve access to content

Enhanced scrolling Example: U^lizaôn of con^nuous scroll

enhanced recirculaôn module on scroll-‐up drives bemer engagement

Be?er swiping Example: Build on exis^ng swiping to

access bemer recirculaôn modules and more content

More video Example: Enhance seamlessness of video

player on page

IMPROVE SOCIAL INTEGRATION

Tailoring content in a way that integrates our user experience deeper within social

network experience

Responsive social referral Examples: Dynamic page design to tailor content to style matching referring social media (e.g. more visual content when

coming from Pinterest)

Atomized content sharing Example: Enables users to engage with

specific parts of content to bemer personalize sharing capabiliês

Passive personalizaIon Con^nue to pair improved page funcônality with

effec^ve passive personalizaôn technology

Format shift: Growth of video changes process and focus of content production

Direct mid-1990s

Social Media 2010

Search mid-2000s


Launch 2005


DEVICE SHIFT 2

From text to video

FORMAT SHIFT 3

3

17

Format shift: Demand for online video viewing is rapidly growing

3

Digital video viewed per person per day (mins)

0

20

40

60

80

2011 2012 2013 2014 2015

% mobile 14% 25% 42% 48% 51%

21

36

50

63

76

Annual growth 11-15

38%

20%

90%

Desktop

Mobile

18

Format shift: greater numbers of devices provide greater access 3

Total 71% 71% 4% 6% 4%

56% of millennials ^me watching ‘TV’ is not on TV

Time spent watching TV or movies, by device

Trailing millennials

Leading millennials

Genera^on X

Baby boomers

Matures 92%

88%

76%

53%

44%

5%

8%

15%

7%

9%

4%

8%

7%

6%

23%

32%

5%

9%

8%

19

Format shift: Companies like Netflix capitalize on this trend as TV loses share 3

6% quarter-on-quarter

-1% quarter-on-quarter

Comcast/ Time Warner combined

Netflix

0

5

10

15

20

25

30

35

40

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

US subscribers (M)

0

5

10

15

20

25

30

35

40

Q4 2011

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

Q1 2014

VIDEO ON DEMAND 4x increase in VOD content in

last 5 years

BINGE RELEASES

Multiple full series releases, not

week-by-week

20

Supply is also expanding greatly with a new genre of ‘YouTube stars’ competing with TV 3

LOW PRODUCTION AND DISTRIBUTION COSTS FOR ‘YOUTUBE STARS’ CREATING NEW GENRE

$0

$2

$4

$6

HBO Neqlix FOX AMC MCN

Hourly cost of production ($M)

$5.0M

$4.0M $3.5M

$3.0M

$0.1M

… THESE LOW COST CREATORS ARE GETTING VIEWS AT LARGER SCALE THAN TRADITIONAL PLAYERS

0 50 100 150 200

CBS

Comcast

Fullscree

Vimeo

VEVO

Maker

Google

Online video audiences (April 2015) M, comScore

153M

44M

43M

37M

34M

33M

30M

Driven by low-‐cost content

21

We have built video operations into three distinct tiers of video content 3

PREMIUM LICENSED CONTENT

Premium partnerships with top content producers distributed across our properties e.g. NBC Universal

USER-GENERATED CONTENT

Content generated by users and contributed to our sites e.g. Outspeak video journalism

ORIGINAL CONTENT

Live and on demand original content e.g. HuffPost Live 8 hours per day of streaming content

22

Organizationally, we externally incubated HPL to drive video excellence 4

HUFFPOST VIDEO DESIGNED AS TWO DISTINCT BUT COMPLEMENTARY ORGANIZATIONS …

HUFFINGTON POST

Editorial

News & politics Entertainment Lifestyle Impact & innovation

HuffPost original video

HUFFPOST STUDIOS

HuffPost TV Flash-cam HuffPost Live

streaming

Editorial guidance and distribution

Video production and operations

… EACH BRINGING DISTINCTLY DIFFERENT SKILLSETS TO VIDEO PRODUCTION

Deep expertise of editorial direction, audience dynamics and distributed content strategy

Leveraging existing audience to deliver high video views per video

Capabilities in rapid, short-form video production

Deep understanding of video-based storytelling and technical production

Building new audience on-site and across third party (e.g. OTT) platforms

Capabilities in high-end video programming and production

+

Platform shift: Each of these macro trends combine to grow distributed content

Direct mid-1990s

Social Media 2010

Search mid-2000s


Launch 2005


DEVICE SHIFT 2

From text to video

FORMAT SHIFT 3

4


Distributed Media 2015

Platform shift: Demographics illustrate the clear shift towards distributed content

4

0%

25%

50%

75%

100%

Baby boomers Genera^on X Leading millennials Trailing millennials

Preferred sources of media, by demographic

9% 24% 33% 51% % distributed

Distributed

Direct

More than 50% of people aged

14-‐25 find media through distributed sources

Increasing propor^on of future news audience

Source: Deloime Digital Democracy Survey

Social is the most important of distributed sources 4

…AND SOCIAL REFERRALS ARE THE LARGEST SOURCE OF TRAFFIC TO HUFFPOST

% referrals from social

~10% ~20% ~30%

0%

20%

40%

60%

80%

100%

Social

All other

Multiplatform external referrrals, by source

2013 2014 2015

SOCIAL MEDIA IS #1 ONLINE ACTIVITY, DRIVEN BY PARTICULARLY HIGH USAGE ON MOBILE…

Daily time spent on social media (mins)

29 8 21 Daily minutes on social

0%

20%

40%

60%

80%

100%

Desktop Mobile Total

Social media

News & ent’ ment

Comms

Games

Commerce Search

‘The deal’: Publishers and social platforms have a symbiotic relationship 4

600 daily posts

350 daily posts

370 daily posts

300 daily posts

…PUBLISHERS PROVIDE CONTENT IN ORDER TO ACCESS LARGE AND ENGAGED AUDIENCES

“The deal”

Content

Traffic

1.5B monthly

users

300 monthly

users

320M monthly

users

200 monthly

users

NEWS AND ENTERTAINMENT IS THE SECOND BIGGEST DRIVER OF SOCIAL MEDIA USAGE…

0% 10% 20% 30% 40% 50% 60%

To share details of my personal life

Share photos and videos

Share my opinion

Find entertaining content

Keep up-to-date with news

Stay in touch with friends

55%

27%

38%

39%

39%

41%

Publisher input Top reasons for using social media

However, platforms are increasingly creating their own native solutions 4

TRAD

ITIO

NAL

SIT

UAT

ION

Publisher creates text or video

Publisher provides related

content

Advertising on publisher site

Link back to publisher site

Posted content matched to audience

PUBLI

SH

ER

PLAT

FORM

Create content Match content to audiences

Display content

Recommend further content

Serve advertising

Key change in publisher/ platform relationship

EMER

GIN

G

SIT

UAT

ION

PUBLI

SH

ER

PLAT

FORM

Publisher creates text or video

Publisher provides related

content

Platform sells ads on platform

Content hosted on platform template

Posted content matched to audience

Create content Match content to audiences

Display content

Recommend further content

Serve advertising

In addition to monetization, platforms are seeking to capitalize on key macro trends 4

More social on mobile +125% greater traffic source

Site entries by source of traffic

0%

25%

50%

75%

100%

Desktop Mobile

Social

Search

Other

Social

Search

Other

More video on mobile 30% annual growth of =me on mobile video

Video minutes on mobile per person per day

0

10

20

30

40

2011 2012 2013 2014 2015

3 mins 9 mins

21 mins

30 mins

39 mins

0

2

4

Q3 2014 Q4 2014 Q1 2015

Daily video views on Facebook (B)

1B

3B 4B

More video on social 300% growth in last year

2Video Increasing our video inventory

3

Social Broadening plaKorm

coverage

1Mobile Adap=ng to changing audience behavior

Distributed content

Overall, these programs also offer multiple positive opportunities for publishers 4

SOURCES OF REFERRAL TRAFFIC

Instant articles Moments -

Enriched native

formatting

Curated news

content

No announced program

NO SOURCE OF REFERRAL TRAFFIC

- Discover Apple News

No announced program

Enriched native

formatting

Curated news

content

Traffic impact

Negative Likely minimal

n/a Uncertain (impact on direct apps)

- n/a

Emer

ging

co

ncer

ns

Pote

ntia

l up

side

s

INSUFFICIENT DATA SHARING

LESS UX CONTROL

REDUCED MONETIZATION


LESS UX CONTROL



IMPROVED ENGAGEMENT

IMPROVED BRAND EXPOSURE

IMPROVED MONETIZATION

IMPROVED BRAND EXPOSURE

IMPROVED ENGAGEMENT

-

-

-

- -

- -

-

-

-

-

-

However, publishers must actively manage this shift in three key ways 4

CREATE PURPOSEFUL CONTENT STRATEGY

Publishers must have a clear platform-by-platform content strategy -  Content designed specifically to resonate on specific platforms -  Content production prioritizing video to capitalize on industry trends

1

ACTIVELY MANAGE DISTRIBUTION CHANNELS Publishers must actively manage on-platform sources of traffic -  Enhance direct traffic by prioritizing app development -  Enhance search by adapting to initiatives such as Google mobile

acceleration

2

ENHANCE PREMIUM MONETIZATION CAPABILITIES Publishers must enhance premium monetization capabilities off-platform -  Non-ad served strategies such as native content and sponsorships -  Partnership deals that sufficiently deliver monetization and data

capabilities

3

Ultimately this is an extension of the evolution we have seen in online media 4

Print newspapers

Shift to online (Desktop)

Shift to mobile

Shift to distributed

2000s- 2010- 2015-

Sub-standard response to industry shift

•  Replicate print paper online

•  Replicate desktop site on mobile

•  Replicate on-platform content across channels

More successful response •  Innovate to enhance audience interaction (i.e. comments), adjust editorial processes and content for different style of audience engagement

•  Innovate to enhance content and page functionality capabilities for different devices

•  Innovate to tailor content and monetization strategy on a platform-by-platform basis

HuffPost success is due to its adaptation to each stage of the media evolution

Direct mid-1990s

Social Media 2010

Search mid-2000s

Launch 2005




DEVICE SHIFT 2

From text to video

FORMAT SHIFT 3

Distributed Media 2015 Prioritize technology in

order to monitor and improve performance in

real time

1

Product innovation

adapt to fundamental changes in audience behavior

2

Organizational innovation to help accelerate new production 3

Emphasize partnerships

to adapt to changing market

dynamics

4

Thank you

Jimmy Maymann

President, Content and Consumer ��

Brands, AOL

@maymann