For creators and independent publishers looking to build sustainable long-term businesses, diversification is critical, particularly as it relates to audience growth and revenue generation.
In an era when audience behaviors and expectations change daily, revenue models and opportunities evolve rapidly, and the interests and priorities of third-party platforms can shift at the drop of a hat, the only way content-driven businesses can position themselves for long-term success is by ensuring their eggs aren’t placed in too few baskets.
Many creators and publishers have learned the hard way that over-reliance on one or two platforms, short-lived growth tactics, or unreliable revenue sources puts them in precarious positions. Sooner or later they’re forced to find ways to diversify key elements of their operations and businesses, or to live wondering if and when the rug might be pulled from under their feet.
Where diversification is essential
Diversification can mean different things for different creators, but it’s most critical for insulating their businesses from the impact of factors outside of their control and minimizing the downstream impact of the decisions of other parties. It’s not all about playing defense, however: Diversification is also essential for enabling creators to identify and capitalize on new opportunities.
For most creators, diversification is most important in two areas:
For any successful creator business, a “north star” goal should be developing direct relationships with their audience. That often means engaging as much as possible through their own websites, email lists, and other channels they own and operate, rather than through third-party platforms and partners.
But when it comes to reaching and engaging new audiences, the reality is that every creator relies on third parties and partners to some degree, whether that’s social media services, video and podcasting platforms, paid advertising, or distribution via other creators or entities.
For any creator looking to build a defensible long-term business, cultivating a healthy and varied mix of distribution and discovery channels is essential. Over-reliance on any single platform or entity comes with inherent risks, and creators should aim to diversify the platforms and partners they work with to minimize the impact of algorithm changes and other external factors on their ability to attract and engage audiences.
The most successful businesses make money in multiple ways, both in order to maximize revenue and to insulate themselves in more challenging periods. Diversification is perhaps even more important for independent creators and publishers, whose livelihoods are often on the line if things take a turn for the worse.
Creators relying exclusively on one or two partners for revenue – whether through advertising, licensing or other arrangements – are in an inherently delicate position. The priorities and goals of those partners might be aligned with creators’ interests, content and audiences today, but they could shift drastically tomorrow. Broader economic conditions are also a factor: Revenue streams reliant on advertiser dollars can dry up quickly during periods of economic uncertainty, for example.
In order to diversify their revenues, a growing number of creators are now building out subscription and membership offerings of their own and letting their audiences support elements of their businesses directly without reliance on third parties.
Membership revenue has a number of key benefits for creators:
- Enables them to generate revenue directly with their audiences without third-party intermediaries owning control and taking a revenue cut.
- Generates reliable, predictable revenue that is easier to forecast and plan around, and is less dependent on big content “hits” or the whims of algorithms.
- It’s impacted less by broader economic trends that can often cause slowdowns in advertiser spending.
Other creators are diversifying further by branching out into e-commerce and merchandise, endorsements, sponsored content, job boards, and even consulting and advisory arrangements.
Principles for effective diversification
Diversifying audience and revenue involves different approaches and tactics from one creator to the next based on the nature of their content, audiences, and a range of other factors specific to their operations and businesses. For those creators looking to build long-term businesses, however, it’s an investment worth making, and keeping the following principles in mind can help:
Prioritize ownership and control. The most robust creator businesses ultimately own direct access to a large portion of their audience via properties and platforms they own and operate, rather than those offered by third parties. This affords them the freedom and flexibility to make decisions that shore up their own businesses rather than being dictated to by others. Platforms and other third parties are crucial for audience growth, but building a business in someone else’s backyard is a risky move.
Be disciplined, and embrace slower growth. Building a diversified audience and business takes time, and it often involves making decisions based on long-term viability rather than short-term boosts. Rapid audience and revenue growth offered by third-party platforms and partners typically come with strings attached, and creators should approach those opportunities carefully. Striking a balance between short-term growth and long-term success is preferable, of course, but building a diversified business often means taking the long view.
Use flexible, non-prescriptive tools. A fundamental prerequisite for diversified businesses is access to flexible, non-opinionated tools that are capable of growing with – and adapting to – creators’ needs. Every creator and publisher is unique and every business has its own distinct needs and dynamics. Tools that limit their options to predefined models and approaches – intentionally or otherwise – inherently stifle their ability to build successfully diversified businesses.