FOLIO, April 11, 2019.

The that have plagued the magazine industry for a decade in the first quarter of this year, along with hundreds of cuts at . The pink slips reflect the industry’s precarious position as it adjusts to a new world of data-driven advertising, digital-native audiences and continually shrinking newsstand sales.

Still, opportunities remain for those publishers willing to make necessary changes. Outlets that can reach niche audiences, have a high-quality product and have found ways to monetize their data are finding new ways to thrive.

“The industry is suffering right now, but there are things to be somewhat excited about,” says Bill Beuttler, a magazine journalism professor at Emerson College. “The strong magazines will survive, and the ones that remain are going to be good ones.”

Below are the biggest trends to emerge (or endure) during the first quarter of 2019, and what they mean for the quarters—and years—ahead.

Building (Pay)walls

A growing number of companies are looking for ways to put at least some of their content behind a paywall, with some companies publicizing a bigger commitment to the shift than others. Most notably, Condé Nast announced in February a plan to charge readers for access to at least some content from its more than 20 brands, after initial experiments with soft paywalls at crown jewels The New Yorker, Wired and Vanity Fair.

The new version of the paywall is more dynamic than the one-size-fits-all versions that failed to take hold the last time media companies tried getting their readers to purchase content online. Today’s paywalls are often metered, kicking in only after a reader has already consumed a set number of articles per month (most often four or five). Public attitude toward subscriptions and membership models has also shifted in recent years, as consumers find themselves making automatic, recurring payments for everything from music and videos to groceries and clothing.

There’s also a growing recognition of the value of quality content. Consumers will watch free videos on YouTube with pre- or mid-roll ads, but they’re also willing to pay for subscriptions to Netflix or HBO because of the superiority of the product. That’s a distinction that publishers are still working to establish.

“The route that the most successful magazines will follow is providing content that the audience values and is willing to see as separate from what is available on their phone all day long,” says David Abrahamson, a professor of journalism and magazine editing at Northwestern University’s Medill School. “It has to be content that the audience is willing to pay for. The stronger a voice a magazine has, the more engaged its audience is and the greater the perceived value.”

The Ownership Shakeout Continues

While the quarter didn’t see any mergers or acquisitions comparable in size to last year’s purchases of Time Inc. by Meredith Corp. and Rodale Inc. by Hearst, publishing companies continue to evaluate their portfolios in an effort to find the most successful business model amid a constantly changing landscape.

For some publishers, that means expanding. In February, Nashville-based B2B firm Endeavor Business Media purchased more than 20 former PennWell media brands and related events, doubling its portfolio. The purchase represented Endeavor’s ninth in just over a year since its formation. At the same time, some publishers are selling magazines in order to get out of print entirely. In March, Rogers Media—once the largest magazine publisher in Canada—announced plans to divest its five remaining magazines, including Maclean’s.

“Clearly we are seeing continued consolidation of the industry to a few notable players and, with that, a focusing of fewer resources on fewer titles,” says Peter Kreisky, CEO at publisher consultancy New Portal Media. “It takes an investment to take magazines from print across multiple platforms in an effective way, as the industry requires now. That places a big burden on the publishers that don’t have the resources to do it, which forces further consolidation.”

Uncertainty Around Apple News+

Perhaps the biggest news story of the quarter was Apple’s unveiling of Apple News+, a “Netflix for News” service that charges readers a monthly fee for unlimited content from 300+ publishers, including big name publications like Vogue, The Wall Street Journal and Us Weekly.

A WSJ report suggested Apple would roughly split the subscription revenue with publishers, including additional incentives for the most read magazines. It remains unclear whether the service will find traction with consumers (The New York Times reports that 200,000 people signed up for free 30-day trials in the service’s first 48 hours), and how it will impact the subscription rates of the largest consumer-facing publishers. In addition to a less-than-advantageous revenue-sharing model, many in the industry have raised concerns that they won’t have access to data on the platform’s users.

“Apple becomes an 800-pound gorilla in any arena that it chooses to operate in,” Abrahamson says. “We don’t know enough yet about what the knock-on effects of Apple’s participation will be. But considering its history, the way it transformed the music industry, it’s certainly in everyone’s mind.”

Data Remains King

Publishers are realizing that their access to proprietary data has become a valuable commodity that they can use to drive additional revenue. Increasingly, they’re investing in tools that allow them to tap into that data, either to further target their own editorial and marketing efforts, or as something that can be packaged and sold to advertisers.

Data science becomes more critical to publishers every day, according to Patti Devine, a longtime marketing consultant in the magazine and newspaper industry. It’s important ammunition when competing against Facebook and Google, who’ve proven themselves to be less-than trustworthy stewards of data, and it’s vital in today’s regulatory environment.

“Every publisher and marketer, large and small, B2B and consumer, has to understand and leverage their data,” Devine says. “First-party data is critical in the days of GDPR and other privacy laws and restrictions that have gone into effect.”

B2B publishers, in particular, are learning how to unlock the value of the data that they already have, including from alternative sources such as social networks or mobile apps. Marketing clients are willing to pay directlyfor data itself, in addition to advertising campaigns that might generate data in more sophisticated ways than basic programmatic solutions. Data also allows publishers to personalize their product for their readers, creating a “user-first” experience that’s more engaging than the static models they’ve relied on in the past.

Having hard numbers also gives publishers freedom from the costly and labor-intensive processes involved with maintaining the largest possible list and circulation base. Instead, they’re able to focus efforts on creating the highest quality list possible, which is ultimately far more valuable.

Recession Concerns are Mounting

Magazine publishers spent the last quarter as they have the last few years—reorganizing and pivoting to new strategies (video, podcasts, data, frequency changes) in an attempt to make up for declines in ad revenue and the rise of the duopoly. One positive thing that the industry had going for it was a relatively strong economy in the background.

All of those maneuvers now, however, occur with the understanding that the economy might be overdue for a recession, following a decade-long expansion that seems as though it’s beginning to waver.

“You’re going to see more volatility, both in ad buying and in buying of equipment and technology,” says John Zwarensteyn, who retired in September after nearly 40 years as president and publisher of Gemini Publications, a group of Michigan-based magazines including Grand Rapids Business Journal. “You’re going to find a lot of publishers holding back until there’s more stability.”

Already, there are signs: Weakness and consolidation in the retail sector are having an outsized impact in newsstand sales. Still, the strongest publishers may be in a better position to weather this recession than they have been previously, due to increasingly diversified business models, Abrahamson says.

“Marketing and advertising is often regarded as recessionary, and it’s an easy thing to cut back on,” he explains. “But with the paywalls and the importance of data, the increasing reliance on a circulation stream and the declining importance of the advertising revenue stream, it may be different than in the past. The industry shouldn’t be sanguine, but I suspect it may not be as exposed as it was in the past.”