With digital ad revenue dwindling, media companies are taking another stab at selling their tech to publishers


New York Media’s website.
New York Media

Vox Media and New York Media are both proactively pitching their publishing technology to other media companies. New York Media is working with Po.et, a platform designed to track digital ownership, to power blockchain-based development in its content-management system. In theory, blockchain will let developers create more applications and tools that New York Media can sell to publishers. A number of companies have tried to make a business from licensing their tech, with mixed success. A few years ago, publishers leaned hard into selling the technology and publishing platforms that power their newsrooms to other media companies as a source of revenue. Gawker backed out of the business after realizing that it was tough to morph into a technology company. Medium promised publishers a third-party platform to manage content and advertising a few years ago before shifting its focus to subscriptions last year. But with mounting pressures on the digital-media business and a growing need to diversify beyond advertising, a handful of companies are looking to cash in on their tech. In July, Vox Media stepped up its efforts to license its publishing platform, Chorus, to other publishers. Now, New York Media is pitching its open-source technology, Clay, to publishers through a new partnership with Po.et, a blockchain-based platform designed to track digital ownership. Read more: A digital-ad veteran is leaving The Washington Post, hoping to use blockchain technology to save the media industry The Washington Post has been selling its Arc platform for several years and counts Bonnier Corp., Boston Globe Media Partners, and Advance Local as customers. According to Niemen Lab, Arc powers more than 100 sites and will begin testing an ad network for them next year. Hearst is using its MediaOS platform to power a few of its related sites, including Shondaland, Gear Patrol, and CR FashionBook, though the publisher said it’s not broadly marketing the platform. “Starting around 2011, West Coast VCs [venture-capital firms] expected to see big tech teams at the media companies they were investing in. This led many privately held media companies to proactively build out large engineering and product teams with the hope of attaining a tech multiplier on their valuations,” said Jesse Knight, a former Vice Media exec who is now a media and tech consultant. “Now that digital-media valuations are falling, especially for the less agile of the digital-first crowd, those tech multipliers are largely gone, which means that savvy CEOs and CTOs [chief technology officers] are looking to license a publishing platform and focus their spending on editorial and content production.” New York Media is fueling up on tech One way New York Media is looking to differentiate its push into licensing is through an open-source platform and partnership with Po.et. New York Media started licensing its content-management system, or CMS, Clay (named after the magazine’s founder Clay Felker), in January after signing its first customer, Slate. Since then, Golf.com and Entercom’s Radio.com have signed on to have Clay manage their websites. Because Clay is open-source, publishers and developers can customize the technology by building shared features and plug-ins on top of the CMS. For example, Golf.com’s site includes a directory of golf courses, players, and equipment, and New York Media is testing using the same database structure to house its restaurant-reviews section. New York Media also recently rolled out a new subscription program and paywall to diversify the publication’s revenue. The paywall is built within Clay, which means other publishers can use it to set up their own paywalls. That structure makes it a natural fit for blockchain technology, said Daniel Hallac, New York Media’s chief product officer. In the case of Po.et, it’s now a plug-in for Clay that lets any developer build applications. “The more people build to it gives us more choice and allows us to experiment and try different things,” Hallac said. “This was probably a day or two of work of an engineer to build the Po.et plug-in for Clay. Anyone who wants to download Clay or any of our licensees who want to take advantage of it can utilize it.” In theory, the goal is to add new features that make Clay appealing to a wide range of publishers and enable them to experiment with blockchain. Po.et CEO Jarrod Dicker. Washington Post “The CMS wars are a big thing,” Po.et CEO Jarrod Dicker said. “With New York Media, it became really clear — they are building a need and value for the marketplace to get more publishers and creators to use Clay. We want to bring this next generation of innovation and opportunity around blockchain to the masses and make open-source something that’s accessible and lucrative that can help drive the entire industry forward.” No money was exchanged between New York Media and Po.et in the deal, though “there are opportunities to build commercial products on Po.et that Clay can then leverage and sell,” Dicker said. In the long term, Po.et hopes that working with New York Media will expose new people to building blockchain-based apps that solve broader issues in media, like rights-management tools that track the origin of aggregated stories and videos back to their original creator and source, or voice skills for Amazon Alexa that allow developers to create and save their work. Selling a custom CMS requires a new sales muscle One of the challenges for selling tech software is that it requires publishers to develop a new mindset when it comes to sales. Instead of chasing one-off ad deals, selling enterprise software often takes longer and requires getting in front of new people within a company. New York Media’s sales efforts for Clay to date have been primarily aimed at chief technology officers and product managers on a one-on-one basis, which Hallac acknowledged may be only a short-term solution to selling publishing technology. “I don’t know how sustainable that is without a sales force, but it is the case where our success has been because the CTO is in the room with the CTO and talking about the nitty-gritty of the architecture,” Hallac said. “We’re bypassing the traditional sales process.” That’s why Hallac is reluctant to stick his neck out in sizing up the business’ potential for New York Media. “While we have targets and we’re trying to sort of grow it, we don’t know how big an opportunity this could realistically be,” he said.
This is a subscriber-only story. To read the full article, simply click here to claim your deal and get access to all exclusive Business Insider PRIME content.

Read More