Hearst’s Digital Head Says Mobile Platforms Should Share More Revenue With Publishers

Troy Young said there is 'codependency'

Troy Young, president of Hearst Magazines digital media, said distributed content makes up around 10% of revenue.
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The head of Hearst’s digital properties says distribution of content is helping the brand evolve, but that making revenue off other platforms is still a long way off, calling on those platforms to pay more for the content they’re getting from media companies.

According to Hearst Magazines digital media president Troy Young, distributed content now makes up 10 percent of the publishing powerhouse’s overall revenue, even while the company’s media brands continue to innovate and grow on mobile platforms like Snapchat and Facebook.

“Don’t get me wrong, we love distribution. But, sadly, in the world of digital media, it’s still tough to take to the bank,” Young said during a speech at Interactive Advertising Bureau’s leadership summit in Ft. Lauderdale, Fla.

Young said media companies and content creators should be being willing to say no to deals they’re not comfortable with. He compared the current debate to the carriage disputes between cable networks and service providers, adding that industry is shifting too fast, and that it will take bigger companies putting pressure on digital platforms to make sure they get their fare share of revenue for content and advertising.

Hearst has been an early adopter of emerging platforms such as Snapchat. Young cited Cosmopolitan magazine’s Discover channel on Snapchat, which he said is now drawing at least 7 million viewers. (Snapchat hasn’t disclosed or commented on how it shares revenue with publishers on its Discover platform.)

“We’re deeply indebted to Facebook, Google and Snapchat, because they’re really important to us,” Young said. “But this is a negotiation, and we play a really important role.”

However, Young said, platforms aren’t doing enough to compensate media companies in what he described as a “codependent environment.” In fact, while he said some platforms are “slowly coming to terms” with the need to pay for content, he suggested they could do more to compensate for content.

How much would be fair pay for the between 300 and 500 pieces of content Young said Hearst creates on a daily basis? Half of what they make off that content, he said.

“We live in a really fragmented media landscape that blends content from individuals, brand and media companies into one delicious stew,” he said. “The problem is the battle is uneven, pitting hundreds against a powerful few.”

Platforms like Facebook have in the past shifted their revenue model to appease publishers. For example, in December 2015, Facebook updated its policies to allow for as much as 40 percent more ads inside Instant Articles stories.