In my post, The Changing Risk Landscape for Publishers in a Digital World, I explored some of the changing exposures faced by publishers enduring print-to-digital transformation. Since then, we’ve seen the commoditization of online news and a variety of strategies being adopted by publishers to generate revenue — from subscriptions and memberships to digital marketing and advertising, to partnerships with outside brands and investments in live events, podcasts and video content production.
As we continue to move away from print to digital content, it’s clear that technology will be increasingly important to publishers— not only as a content delivery vehicle, but as a means of generating revenue. However, there are key risks that come with using these technologies that publishers need to be aware of and develop strategies to mitigate against.
Here are the top five:
1. Content production
Back in 2015, Cisco predicted that video would account for 69% of consumer Internet traffic by 2017. So, it’s no surprise that publishers have invested heavily in video production and streaming. However, it’s important for publishers to be aware of the risks that come with streaming media, which include patent infringement which is relevant to both the technology developed in-house and by third parties, and liability risks (i.e., invasion of privacy, defamation and copyright infringement).
Publishers must ensure technology providers own the intellectual property they’re licensing, or, when developing technology in-house, they do the necessary due diligence to ensure they’re not infringing on other intellectual property and are sufficiently protecting their own.
In respect to content, publishers must:
- Ensure robust editorial procedures are in place to ensure it isn’t infringing intellectual property rights.
- Have robust, tried and tested takedown procedures to limit any damage should any infringing content need to be removed.
- Consider if they need to transfer some of their media liability risk via specialized media liability insurance coverages.
We’ve also seen a rise in “drone journalism.” The journalistic opportunities created by use of such technology is evident in the ability to film and photograph previously inaccessible territories and produce shots in a shorter time frame for lower costs. For publishers using drones, the risks include injury to people or damage to property arising from drones that fall from the sky or crash into buildings or other aircraft, in addition to privacy and cyber liability risk, as drones capture both data that is stored within the drone and what’s sent to the cloud.
Drone users must ensure they are adhering to the regulatory guidelines set in various territories. In addition, users may want to consider risk transfer products tailored to the use of unmanned aircraft systems (UAVs), which provide bespoke insurance protection including full cover while in flight, aviation liability, data protection and invasion of privacy.
2. Digital advertising
Traditional publishers are striving to capture their share of this digital advertising market by evolving online advertising strategies, increasing programmatic advertising and harnessing supporting technologies.
Some publishers are creating data management platforms and using machine learning algorithms to harness customer data to target content and advertising. This not only poses intellectual property risks, including patent and software copyright infringement, it also increases publishers’ professional indemnity risk arising from technology failures or negligent services.
Licensing criteria and the use of databases to manage user names and passwords, in addition to the complex interface between different platforms and business systems requires careful consideration. Data integrity will be essential for publishers and will have a material impact on the type (and quality) of risk transfer solutions required.With the increasing amount of data being collected and used, publishers must ensure they have a fully integrated, comprehensive plan for managing it. This should include the type of data, purpose of use, how it’s handled, who it will be shared with, how long it will be stored and the security measures that will be needed to protect the data.
3. In-house technology development
Forward-thinking publishers are building technology solutions in-house and exploring third-party partnerships to ensure effective delivery platforms. The most obvious technology risks include loss of personally identifiable data and technology systems failures. This means publishers will need to give considerable thought to how the rapidly changing universe of risks are best managed and insured throughout the life-cycle of very dynamic technology ecosystems while still meeting customer expectations.
In respect of a publishers’ in-house technology, risk management should be built into the design of new products and systems to ensure protection of data and system resilience. When working with third parties, thorough due diligence should be conducted into their information security practices. Publishers should also assess the impact of any technology system failure and ensure mechanisms are in place to respond to such incidents effectively.
Failure to do so can expose a publisher to business disruptions and loss of revenue from technology platforms previously not assessed in the business continuity planning process. As per the above, publishers must strive to ensure ‘risk management by design,’ be it for digital content, advertising or through new offerings such as artificial intelligence solutions. Otherwise unintentional vulnerabilities may emerge. A review of the corporate insurance program is also likely to be required to identify if there are any gaps in coverage.
In addition, there are workforce-related factors that, if not adequately addressed, may have a seismic impact on publishers risk landscape as their digital strategies are implemented. In the context of risk culture and insurance, publishers should consider:
- The shortage of capabilities/talent around digital/disruptive technologies
- Shortage of skills required to develop and support highly digital infrastructure and products
- Lack of operational agility to meet customer demands
We’re seeing more collaboration between publishers, technology companies and brands. For example, apps are providing additional services and products to targeted audiences, publishers are using voice activated system technology to distribute content and brands are working with publishers to develop tailored and personal campaigns. While such collaboration has produced impressive results, publishers must ensure tight commercial contracts and agreements are in place with all parties.
5. Technology acquisition
M&A activity isn’t new to the media industry. However, as publishers continue to target digital agencies, ad-tech companies and analytics firms that own the much-needed technology solutions publishers seek, they must ensure relevant levels of due diligence are not overlooked in the haste to digitize. In addition to standard due diligence procedures, publishers should have a sound understanding of their target company culture and risk management philosophies and any liabilities that could affect company performance in the future.
It’s clear that data is the new currency for publishers. In combining art with science, and in changing their publishing techniques and business models, publishers must fully understand their current and future exposures and ensure available mitigation measures are being taken along the way.