Perspectives: Opinions from our network of advisors, investors, operators and analysts on the risks and opportunities they see.

Karam Hinduja is the founder and CEO of Karma Network and Timeless Media.

The media landscape has undergone a rapid evolution in recent years. It has embraced and weathered all sorts of disruptions—from the rise of on-demand video, to the return of the content paywall—and has had to adapt in response to the changing habits and demands of the millennial generation.

This evolution has also seen the emergence of a fundamental disconnect between the major stakeholders in the industry, creating a challenging climate and new opportunities for media brands and investors.

Consumers, inundated with choice in a world of ubiquitous content, are becoming more discerning, as they are turning to platforms and services that tailor to their specific preferences. Today, we see the trend towards personalization and privacy after a decade of openness and sameness.

Investors, for their own part, need to be able to navigate these dynamics and recognise that the route to sustainable revenue streams lies in business models based on quality, rather than quantity, of reader engagement.

Content publishers caught between rock and a hard place

Media companies find themselves in a difficult position. They are caught between the demands of today’s consumers on the one hand, and those of advertisers on the other—their major, if not exclusive, source of revenue, that focuses on the value of clicks and impressions as the key metric to determine success and conversions.

While traditionally deep-pocketed advertisers and consumer brands are faced with increasingly tight margins, given pressures of disruption and competition in their own markets. In a desperate attempt at customer acquisition, they are looking to allocate budget to out-bid their competitors in digital marketing and advertising. But they are focusing, as they always have, on channels that deliver maximum volume—more eyeballs looking at an ad, more clicks on a link.

A range of business models have emerged to address this disconnect as publishers have explored paywalls, subscription fees and partnerships with advertisers. The topic of engagement is certainly a trendy one. But ad spending does not always reflect a robust enough update in understanding audience behaviours and preferences. Measuring quality of engagement is important. A website may attract 10 million viewers—but these are wasted if none are potential consumers or buyers of the advertisers’ product.

Subscription-based content, on the other hand, requires commitment and, by extension, trust from the consumer. Under this model, media companies rely on a smaller, more dedicated audience. This does not mean there is no scope for advertising; on the contrary, it offers brands a closer affinity with a more carefully selected market. Of course, the subscription-based strategy must be sustainable. Quality content costs money to produce. And it may not be relevant to large consumer brands like Wal-Mart—those for which almost everyone is a potential consumer.

Most brands need to stop thinking about volume and realise that the relevancy of their audience is what matters most. After all, for those mid to higher-tier brands—such as banks or gyms—the need is to draw viewers who can actually afford, or have enough interest in, their goods or services. Ultimately, they must focus on delivering information of value to audiences, not just entertaining ads.

Is there an alternative model?

The media industry as a whole seems to be moving towards another model: commerce itself serving as an outlet for content distribution, with media brands now aligning more with companies selling goods or services. Prominent examples include New York-based fitness company SoulCycle, which has launched its own media division, and Peloton, which combines exercise equipment with interactive, live-streamed classes. When you sit at your exercise bike, to you it’s an hour’s workout, but to a media company you’re a captive audience for highly-targeted branded content.

The “commerce as a distribution outlet” model should be of considerable interest to investors. It represents a crucial opportunity to diversify and protect their revenue streams, as it allows brands to directly engage with potential consumers. Uniquely able to command the attention of target audiences for significant periods of time, they can serve as an outlet for content distribution. The “content and commerce” experience provides greater value to the consumer, shortening the journey from information to action.

Positioning for the future

PwC expects that revenues in the global media industry—across both the ad and subscription-based markets—will reach $792.3 billion by 2022, up from $666.9 billion last year. Driven by the sheer scale of the market, data flows will also be substantial. Over the next five years, and boosted in large part by increasing demand for video content and 5G, global data traffic levels are set to reach 397.8 trillion megabytes, growing by over 22% a year.

Tapping into this lucrative market and harnessing these substantial data flows will rely on making informed choices with regards to business models. Here, the content and commerce model could well form a major part of investors’ decision-making.

The media industry will doubtless continue its fast evolution. But despite all the changes in format, browsing habits, and consumer preferences, powerful, engaging and informed content remains key to attracting dedicated audiences—and, in turn, to building sustainable revenue streams. Investors should take note.

Karam Hinduja is the founder and CEO of Timeless Media and the Karma Network. A version of this article previously appeared in Forbes Middle East.

Click here to explore the companies and opportunities featured in this article