What Can CMS Providers Learn From Media Companies?
Today, while marketers start acting like publishers, newspaper publishers are now acting like a software company and developing their own content management systems in-house. Moreover, expanding beyond the borders of their core specialty is not only happening across industries as the similar situation also applies to the various arms of the tech industry as well. For instance, commerce solutions have lately evolved to support customer engagement features, such as page templates, navigation tools, site search, and personalization, while some web CMSes now offer shopping carts, checkout workflows, and product catalog management.
The demand for breaking silos and creating unfragmented digital experiences across devices and channels has drastically been changing the technology landscape and ecosystem for businesses. Alongside this wind of change, since digital transformation continues to engulf everything in its path, opportunities and challenges are equally getting off the ground. In the end, this situation often leaves digital businesses at a crossroads.
In this article, we will discuss what drives publishers to develop their own content management system while there are literally hundreds of CMS solutions already out there and what content management system providers learn from this business shift.
Why Did They Become Media-Company-as-Tech-Company?
The idea of creating a custom-built homegrown publishing system has initially come from the motivation of tackling publishers’ own challenges.
Productivity was one of the primary challenges that a lot of papers had when they were scrambling to move at web speed despite the downsizing due to their soaring figures in revenue. The existing CMSes were not making the situation any better for media companies. While their CMSes were monolithic, newsrooms were tasked to do more with less. As a result, many major papers took the matter into their own hands and built an expanding portfolio of publishing tools to become more productive.
One of the reasons why some publishers have been going out of their way and developing a custom-built CMS for their own use in the first place was the high possibility of existing CMSes setting up overworked editors to fail. New York Magazine, for instance, gives the dismissal of the former New York Daily News editor Jotham Sederstrom as an example. For those who are not familiar with the incident, in a nutshell, Sederstorm edited two pieces by the writer Shaun King which included entire paragraphs copied from other sources. King provided emails with his original copy and it turns out that he did correctly attribute the quotes. This news begged the question asking “Is your CMS really to blame?”
Another reason was reporters were suffering from a disconnect as it had felt like to be able to perform their daily tasks in content management systems, they needed some sort of software engineering training. It’s probably hard to relate for engineers to the needs of a news outlet or journalists. Therefore, many media companies thought that having technologists, reporters, and editors sit alongside each other would make a more collaborative environment, and as a result, that empathy and tight collaboration would solve the disconnect between how a newsroom works and a CMS works. Although I shortly will tell the whole story behind how the Washington Post thrived in developing a content management system that eventually would generate revenue doubled year-over-year, as an example of this type of collaboration, The Post’s CIO Shailesh Prakash has moved 19 IT specialists and developers from their individual offices into the newsroom in order to enable them to collaborate with journalists and editors while developing new ideas.
After building those ever-expanding arsenal of publishing tools, the media companies have seen significant improvements in both their own workflow and the visitors’ digital experiences with their channels. In the meantime, the paper industry has started strongly facing the fact that news outlets had to slash budgets and downsize journalistic aspirations due to the print decline. To compensate the soaring revenue and to bolster financial wherewithal, many of the media companies that had already created their homegrown publishing technologies have decided to license its technology to other digital media companies.
Say Media, for instance, developed Tempest to leverage its owned publications like XoJane and ReadWrite at first. From there, like many other media companies that created their own technology, Say Media started selling its own technology to other publishers as well.
Business Insider developed its CMS as well and named it Viking, while Vox Media created Chorus. Vox Media’s Chorus was received very well in the market when it was launched, and Trei Brundrett, chief product officer at Vox Media said: “Our mission is not just a publishing tool behind a website — it’s about empowering creators and conversations to create powerful media brands. And when [you] pull it off — it sounds beautiful.”
However, one of the great success stories in this area is The Washington Post’s digital content management system, called Arc Publishing. The Jeff Bezos-owned Washington Post was deeply unsatisfied with the CMS tools available at the time and wanted to transform itself into a digital era with a technology company mindset. As a result, they decided to build a technology solution in-house rather than buying one. The platform they built not only performs well, but provides analytics on how readers are interacting with the website and apps, and also collaborates with marketing to convey the desired messages to the target audience.
When The Washington Post first started looking at replacing its legacy content management systems, nobody planned to sell the technology they built to other media companies. However, executives at the Post started to think if there was a market to sell this sophisticated content management system after the in-house engineers developed every single piece of the suite. To find out, the organization asked some of the 250 newspapers participating in the Post’s digital partner program. As a result, many people in legacy media companies acknowledged the struggle. In response, the Post dedicated an engineering team to develop and harden the software to sell out of the newspaper.
In Arc's early stages, The Post was very careful about the business prospects for a suite of web apps that take care of the functions of modern publishing. Amazingly, shortly after larger media companies began to show their interests in Arc, the Post had deliberately started with smaller organizations to understand how well the technology could handle before going to the next level with the larger companies. The newspaper began slowly with external tests of tools of the system at student newspapers at four universities. In 2015, the Post materialized its first sale to a small-size weekly newspaper, the Willamette Week, in Oregon, U.S.
From there, the newspaper grew from about 26 million unique visitors in August 2013 to about 76 million in December 2015. In fact, The Post surpassed its rival, the New York Times, in unique U.S. Web visitors after two years of hard work. The paper also has broadened its audience coverage as both national and international, thanks to the in-house CMS platform and lifted the headcount to about 70 in the newsroom, including about 50 reporters and editors, after years of almost weekly farewell parties in the paper. Moving forward, Shailesh Prakash claims that the company sees the platform as something that could eventually become a $100 million business. On a side note, The Post charges smaller publishers about $10,000 per month in licensing fees to use the software, while billing as high as $150,000 monthly for larger publications.
Do Publishers Struggle as Tech Companies?
Although the story of the Post sounds like a fairy tale, not all media companies who embarked on the same journey ended up doubling their numbers in revenue. In fact, some of them had to scale back their ambitions to focus on their core businesses. Some got distracted from serving readers with this new business focus, while some found it hard to match the sky-high valuations and thick margins of tech companies.
Gawker's content management system (CMS) debuted in 2003. Since then, according to former Gawker Media editorial director Joel Johnson, Gawker had spent anywhere from $10 million to $20 million to develop Kinja. The company hired an arsenal of developers for the product development to the point that they made up nearly a fifth of Gawker’s headcount.
Initially, the vision for Kinja was to create an open blogging platform for any user to start a blog and form their own community. In 2015, they focused more on developing a closed platform for Gawker Media Group properties and a few core [business] partners. In 2016, Univision bought Gawker Media Group for $135 million in a bankruptcy auction.
According to Lauren Bertolini, Gizmodo Media Group's chief operating officer, one of the most attracting features of Kinja is the publishing system's ability to easily integrate links to products on Amazon. Despite the heavy investment, in the end, the platform enticed only a few legacy brands, including Playboy, Road & Track and the American Museum of Natural History, other than Gawker Media sites like Gizmodo, Lifehacker, and Jezebel. In fact, Gawker reportedly decided to rein in its coverage to focus primarily on politics and abandon plans to license its multimillion-dollar Kinja discussion platform to other media outlets.
Following the announcement, Paul Berry, CEO of publishing platform RebelMouse and former Huffington Post CTO, said that The Huffington Post briefly considered outsourcing its CMS to other publishers before realizing the many reasons why the scheme wouldn’t work. “The conceit that media companies need to be tech companies is over. That era is dead,” he said. “Publishers are back to realizing the need to focus on what they’re good at.”
Some huge publishers like Reuters, Recode and Mic also have given up on the on-site conversation, which they’ve outsourced to Facebook and Twitter.
How Did New York Magazine Tackle That Issue?
Without reinventing the wheel, New York magazine has learned its rivals’ mistake and adopted a different approach to still make its homegrown content management system, called Clay, profitable.
In 2015, New York magazine jumped on the bandwagon by launching Clay, which is named after the magazine’s founder Clay Felker. In 2017, the company sold its CMS to the online magazine Slate. So far, it sounds like the same story. However, the difference is the business model. Since Clay is an open-source based CMS, Slate also can be part of development through its existing development team. This situation doesn’t only save Slate from paying a licensing fee but also enables its deployment team to build flexibility into their system based on the feedback from the audience.
Kudos to New York magazine for developing a different business model through tapping into a different CMS deployment. However, what stood out from this story for me is that despite the fact that New York magazine and Slate are considered competitors to a certain extent, New York magazine didn’t hold its technology back. Of course, the business between the two lets New York magazine generate more revenue but it also proves how confident the publisher is in their editorial capabilities.
From a content management provider perspective, the disconnect between specific editorial needs and publishing tools’ capabilities, which initially drove media companies like The Washington Post to expand their footprint into the technology industry, poses an opportunity. Although the content management system providers have come a long way in recent years, in terms of providing more robust publishing tools, I still think, creating a laboratory-like collaborative environment that includes content creators and IT specialists is something technology providers can learn from media companies. If technology providers could analyze the gap between their technology and media companies’ needs, not only themselves but also media companies as well as end consumers would win because that way, tech companies wouldn’t have to share a piece of the pie with media-company-as-tech-companies, while media companies could keep their focus on what they’ve always been good at. As a result, the end consumer gets the high-quality content through cutting-edge technology.