NEW YORK, United States — "Revenue diversification" is corporate media speak for "may we wean ourselves from the depressing business of selling ads." In recent years, legacy publishers have followed consumers online, but digital ad sales have never made up for the shortfalls created by the decline of print advertising.

Competition from Google, Facebook and influencers has only made matters worse in a feed-based media consumption reality that forces magazines to compete with millions of pieces of content published by independent creators. Branded content, once thought to be a cure-all, isn’t exactly flourishing, either. The content is expensive to produce, which cuts into margins, while brands are realising influencer marketing leads to better ROI.

Instead, publishers are staking their survival on revenue diversification. In a recent keynote at SXSW, BuzzFeed chief Jonah Peretti said that the company made $100 million in revenue from sources that didn't exist in 2017. But what actually works well enough to offset the challenges in advertising?

Several opportunities show promise, including paywalls, live events, video, podcasting, and e-commerce. There’s a caveat, of course: nothing works if the foundations of a company’s media brands aren’t strong.

Paywalls work for brands offering hard news; does service stand the same chance?

Condé Nast plans to paywall all of its titles in the United States by the end of the year, following 27 percent growth in digital subscriptions from 2017 to 2018 at Wired, Vanity Fair and The New Yorker. Though a Condé spokesperson declined to provide figures, a source told the Wall Street Journal that New Yorker subscriptions drove $115 million in revenue in 2018, thanks to a thirst for quality journalism in the age of Donald Trump. The New York Times, which first put up its paywall eight years ago, had more than 3 million subscribersby the end of the third quarter of 2018. The Times charges for things like its cooking app and crossword puzzles, in addition to news and analysis.

Nothing works if the foundations of a company's media brands aren't strong.

The New Yorker and The New York Times share something fundamental: people believe their journalism is worth the money, and they didn't have to pivot to get there. But the paywall proposition for the kind of service content produced by many of fashion's biggest titles is less clear. Harper's Bazaar is trialling a paywall with bridal content, even though so much bridal service content for which women used to buy print magazines is available for free on Instagram and Pinterest. Does a market for premium, paywalled service content exist? As someone who pays extra for access to the New York Times recipe database, I believe there is if the content is truly excellent. But cracking the value proposition in the fashion advice space could prove challenging.

Events can work, if you’re comfortable losing money on the first one or two.

The research surrounding event marketing is pretty tantalising. According to Event Marketer, 75 percent of millennials spend money on experiences over stuff (h/t Marie Kondo); 80 percent went to a live event in the last year; and 72 percent say that if they see a brand in a friend’s social media post from an event, they are more likely to purchase that brand’s products.

“It’s the Golden Age of experiential right now,” said Erica Boeke, founder and chief executive of Liberty & Company, who’s overseen events for Condé Nast and Fast Company. She cautions that staging a few inexpensive panels won’t provide proof of concept for publishers. “Look at them as standalone brands, look at them as standalone audiences that need to be grown.” This takes patience in a world where media executives are used to instant gratification in the form of real-time internet stats. “Once they see things aren’t making money instantly, they’re willing to move away from it,” she added. “Coachella took a lot of time to make money.”

Brands with the potential to succeed in events have audiences who crave more interaction with them (and fellow readers).

Brands with the potential to succeed in events have audiences who crave more interaction with them (and fellow readers). Teen Vogue, for instance, was well positioned to launch its summit a few years ago after the excitement generated by its editorial shift toward activism. Boeke said revenue opportunities exist through both sponsorships and ticket sales. But a media brand will have a harder time creating the right event for their audiences if they’re using it to force sponsors into things they don’t want — like buying print pages. Brands can easily make like Sephora and decide to just hold their own events.

Video isn’t a bad idea, if you let other people distribute and sell it for you.

The gripes about video are real: it’s expensive and difficult to do well; it’s hard to distribute in feeds, where opting out of watching is a breezy thumb scroll away; and no one wants to watch it badly enough to sit through pre-roll on a magazine’s website.

Yet video remains an important storytelling device, and it may be more likely to hit revenue targets if outside parties are selling and distributing it. At Hearst, where, full disclosure, I worked as the editor of Cosmopolitan.com, the Hearst Originals team creates shows that aren’t necessarily linked to the company’s magazine titles for platforms including Snapchat (these live separately from Hearst’s Discover channels) and Twitter.

Michael Mraz, who ran Esquire.com before moving to the audience development team, said this gives Hearst more freedom to respond to market demand for web shows, while cashing in on Hearst’s brand recognition (though he hopes to do more series with the company’s magazines this year). Hearst Originals has a team of seven with 11 series in production, and only makes shows with guaranteed distribution or that Hearst will be paid for upfront. The division is “very much profitable,” Mraz said.

One show, which started as a Cosmopolitan.com series (when I was editing the site) has become the CW series Ready, Set, Pet, created and produced by Jason Ikeler. This year, Mraz’s focus is expanding the team and pitching YouTube, Netflix, Hulu, Quibi, and other platforms. Clevver, a collective of YouTube channels targeting Gen Z that Hearst recently acquired in an aim to bolster its presence on YouTube, will also roll up under Mraz, whose team will resume production of four shows under Clevver Style. This takes the pressure off fashion magazine titles to launch a successful fashion YouTube show. Mraz still pitches Facebook Watch but right now, “Snapchat and Twitter are better distribution.”

Podcasts are growing like crazy as snackable news content is king.

According to a study by Edison Research and Triton Digital, one-third of the US population reported listening to a podcast in the last month — that’s 90 million monthly listeners — up from about one-fourth the population in 2018.

Podcast listeners are especially desirable to luxury advertisers. They earn 51 percent more than the general population, and spend more on entertainment, travel and tech products than the average person, according to Acast, which pairs podcasts with advertisers.

Podcasts work best if a brand can easily promote them on existing platforms, and staff them with at least one person from the editorial team.

Oskar Serrander, Acast’s chief commercial officer, said successful podcasts can charge CPMs ranging from $20 up to $100. “It becomes quite lucrative compared to digital advertising,” he said, noting podcasts aren’t in the same “race to the bottom” that programmatic digital ads are.

Snackable news content, which is much easier to produce than longform storytelling popularised by Serial, performs well now. But with podcasting far from mature, a lot of room remains for experimentation in the fashion space, which is dominated by brands. However, a brand's podcast possesses innate limitations one hosted by a journalist would not, and legacy titles would be wise to meet their audience in this medium before they lose ground to independent creators.

Podcasts work best if a brand can easily promote them on existing platforms, and staff them with at least one person from the editorial team. Serrander said some brands start by simply reading their articles. Though he quickly agreed that the articles would actually have to be worth listening to in the first place, which may preclude brands whose editorial strategy isn’t much deeper than Kylie Jenner SEO clickbait.

Selling products works, if you can sell a lot of stuff.

Magazines have always been in the business of selling products to consumers. Affiliate programmes with retailers, where publishers take a cut of items bought through their sites, allows them to directly profit from it. The margins on items sold are so low that it works best if two things are true: you have a dedicated e-commerce team who can track stats in real time and that team knows how to sell a lot of stuff through search.

Bustle Digital Group told me 12 percent of their revenue in 2018 came from e-commerce, much of that from selling a lot of inexpensive items like beauty products. Bustle also has a team of nine people dedicated to this work. That means – and this is crucial – those employees don't have to also edit features, assign news-based essays, or scrape together daily celebrity news blog posts for clicks. They can focus entirely on running a Bustle store.

Publishers are also experimenting with launching their own product lines. Hearst tried selling a yoga mat. BuzzFeed Tasty put out a hot plate in partnership with GE, which was a brilliant marketing gimmick for both brands.

Though there are compelling theoretical arguments for a pivot to owned commerce, it’s hard to imagine this working well in practice for two main reasons. First, because anything a publisher would be able to sell to their existing audience would be the same things their advertisers are already selling. Why would they continue advertising with a company attempting to siphon their business? And second, because there’s no product aside from content that a publisher will make better than anybody else.

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