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Is this the year the papers stop? Patently not, although the industry is not short of speculation, to which we’ll add this:
There’s no question that digital advertising is growing at the expense of that in print, and that newspapers are suffering as a result. And that not everyone cares.
A New Year Twitter challenge to “futurist” Ross Dawson’s timeline – asking if 2017 was indeed the year (and if so when) – brought a “get over it” comment from a reader who thought physical newspapers environmentally unsustainable, a reminder that while the newsmedia industry is still heavily invested in the idea that there’s a future for printed newspapers, others are not at all.
We of course, know differently, and have a vested interest in proving the point.
Most newsmedia companies make most of their profits from printed newspapers, and while revenue from digital activities is certainly growing, much of it comes from diverse new activities which are remote from the news business.
Which of course, is sound business practice: Even in India’s print-positive market – where English-language titles are suffering while vernacular ones drive growth – and in China, print is under pressure as it is in “mature” markets such as Australia, the UK and the US.
None of the objections associated with digital publishing seem set to change that, including the dubious audience stats, the “fake news” issues and the 1.7 billion fraudulent ads Google is reported to have eliminated from its platform last year, more than double what it removed in 2015.
But while digital is undoubtedly the future, low returns and the fact that Google and Facebook together collect the lion’s share of digital advertising – and 73 per cent of “new” advertising dollars – contribute to the fact that newsmedia companies still make most of their profits from print.
Yes, competition is increasing and revenue – both from advertising and copy sales – diminishing, but there’s a growing realisation that print remains a worthwhile business with a foreseeable future. The problem is that the focus on digital and mobile offerings – and the heavy investment they demand – has starved print divisions and distracted attention away from print products.
That’s something we need to get over ourselves. Printed newspapers may not be the cash cows they once were, but they’re generally still worth doing.
As we go to press, there’s a more obvious pragmatism on the subject at Australia’s Fairfax Media, where staff have been told that midweek editions of their metro dailies are not as at risk of imminent extinction as they had been led to believe, especially by writers at rival (mostly News Corp) media outlets. In an internal memo, chief executive Greg Hywood told staff that while other options had been considered, “the model we have developed involves continuing to print our publications daily for some years yet”.
With institutional investors to account to, Hywood is in a bind: He has to talk “sexy” digital because that’s what they want to hear, while quietly continuing to optimise the profits that come from print. It’s a contrast to that at News, which can appear to differentiate itself by its stated commitment to print, something which could appear and disappear – as have other priorities and prejudices (think digital publishing and if you go back far enough, colour printing) – at a wave of Rupert Murdoch’s hand.
Both companies are working hard to build a future from digital publishing, and one in which the return on their efforts comes directly, rather than after the massive cut taken by the likes of Google, Facebook and Apple.
There also appears to be a problem with newsmedia’s image – across both digital and print – which sees advertising agencies’ spend at odds with the direct booking of major advertisers, at least according to research in Australia.
But let’s get back to print: Shedding the baggage, reconciling to the new value of print assets is something outside investors – those without a traditional background in print – have done, and is why most are making a success of the business.
In Boston, USA, the New York Times company took a US$1.03 billion loss when it sold the Boston Globe to businessman John Henry for $70 million in 2013. Since then, Henry – who also owns the Red Sox baseball team and Liverpool football club – has questioned every element of the business: Why print the newspaper in the centre of town on high-performance presses that cost the previous owner huge sums of money, when out-of-town production would be more efficient? Why distribute the paper as it has always been done; why organise newsgathering and editorial on traditional lines? And so on.
At the Washington Post, Amazon boss Jeff Bezos’ approach has predictably been more digital-focussed, but again there’s the fresh eye of an outsider appraising the asset and its earning potential, encouraging older hands to take a new look at what they do.
In the UK, the London Evening Standard is the well-publicised product of a strategy which followed its acquisition – with the Independent – by businessman and former KGB agent Alexander Yevgenievich Lebedev. Notably it has maintained content quality while taking the former paid-sale daily free… and extending it to a wider audience.
The business of free distribution has been honed over the years, to the extent that agents hand newspapers to potential readers who fit a target demographic. So why aren’t we doing more of it, instead cutting back copies that were previously offered to high-value airline passengers, for example?
If the answer is that a cover price that covers print and distribution costs is better than meeting those costs yourself, then let it be that, pitching cover prices to a level which will not inhibit sales. This is what Indian publishers – with their giant paid circulations – tend to do, and also the formula applied to Lebedev’s compact (and surviving) UK daily i.
Suburban publishers have of course, been giving away newspapers for generations. And as the suburbs morph into regional and country areas, the balance of content changes.
Advertisements can be as interesting as news, and as director of the US Institute for Rural Journalism and Local Issues Al Cross says, rural newspapers “generally have the local news franchise to themselves” with less competition for both readers and advertising.
The US still has a plethora of small independent newspapers, most of which are doing good business, although the editor-publishers on which they depend are frequently putting in hours which are out of proportion to any labour agreement.
A fresh look also helps: Starting from scratch about ten years back, Texans John and Jenny Garrett had a different view of what a local newspaper should contain, based on their own needs… and modelled their first Community Impact edition on that.
They now have 22 free distribution newspapers totalling more than 1.6 million copies circulating in an area which embraces Austin, Houston, and Dallas/Ft Worth (see: Press owners control the platform).
Unusually in this age when printing plants are being closed and production consolidated, they have just opened their own printing plant at a cost of US$10 million, an act of faith Garrett says will be justified by the ability to control their own platform.
That “platform” includes a new offset press designed for quick product changeovers, said to be competitive with inkjet digital printing presses on runs down to 500 copies, which will enable them to refine their product (and advertising and editorial content) to hyperlocal levels.
Inkjet press users are of course, capable of publishing “to an audience of one”, a marketer’s dream, but at the same time a feat which requires highly-sophisticated database and delivery resources. The best-known example is a Belgian church newsletter, the 340,000 weekly copies of which are mailed (by post) 508 personalised base “editions”, but we have an update on a government-supported experiment in France which has seen editions and focus expanded.
Small town newspapers face different pressures to their big-city cousins, and may have a much longer future, not least because many have moved to the “push marketing” model of free distribution, with its undoubted appeal to advertisers.
The web (ironically) is full of stories about the relative success of small town newspapers, and Damian Radcliffe and Christopher Ali are in the process of completing a report about US newspapers with a circulation under 50,000 for Columbia’s Tow Center for Digital Journalism.
They say that across both large and independent publishers, they “frequently encountered a surprising level of confidence” about the future.
“Although not immune from the wider cyclical and structural challenges faced by the industry, there was a strong sense that smaller local newspapers are well placed to ride the rising digital tide, emerging successfully – albeit bruised and battered – on the other side.
“Much of this guarded optimism stems from a recognition that competition dynamics at smaller papers are different from their metropolitan counterparts. This is especially true in areas of little, or weak, local TV news. By focusing solely on their community, small newspapers can demonstrate a clear and distinctive niche.”
Print’s impact in a range of segments remains undisputed, and airlines such as United – which is no longer offering newspapers to passengers – will still have its own magazine in passengers’ seat-back pockets. A few online publishers are also reversing the trend, with Spain’s Jot Down magazine among those moving from digital to print.
And at a time when news itself challenges, there are reports of readers turning to trusted print and digital brands for coverage of ‘hard news’ such as the UK’s Brexit and the ascension of US president Donald Trump. It reminds me of growing up in a newspaper household in the UK, where my father once explained that we took the red-top Daily Mirror for the news and the Daily Telegraph to see if it was true.
International newsmedia designer Mario Garcia talks of “lean forward” and “lean back” media, and national and international daily print newspapers are relearning their role in the “lean back” equation, with an emphasis on storytelling and analysis.
In Politico last month, Jack Shafer pointed to Neil Thurman’s study into the time readers spend with print. The University of London researcher found 88.5 per cent of the time British readers devoted to the country’s 11 national newspaper brands was spent with the print edition, with the balance shared between mobile and desktop.
Thurman says a Deloitte study found that the time spent almost exactly matched the proportion of the newspaper industry’s revenue that came from print at 88 per cent.
And he questions the proportion of resources allocated to each. Lured by the prospect of a global audience, publishers such as the Guardian and Daily Mail have taken their online editions overseas – to the US and Australia, for example – but have struggled or failed to get a commensurate return. In Sydney, the New York Times has started to recruit for an edition for Australia, where it already has readers.
Thurman discusses reach and time spent, argues that reaching someone online may be only a fleeting engagement, compared to “the deeper encounter permitted by print”. It’s a metric he says reveals “an inconvenient truth” about newspapers’ online experiment, the shock of how little time online audiences invest in the format.
While cost-effective, the “new reality” of print production brings compromise, and it’s sad that the country’s newspapers could set the scene for the Australian Open’s singles tennis championships, but had to go to press on two consecutive nights without a result.
Of course digital outperforms print when it comes to breaking news, publishing at low cost. Its potential was also rammed home when someone in the crowd at the Mundine-Green boxing clash a few days later live-streamed the match on Facebook – quickly building a 150,000 audience – much to the distress of pay-TV rights holder Foxtel.
But forecasts of the death of newspapers – including Michael Crichton’s 1993 prophesy and Dawson’s provocative Newspaper Extinction Timeline – are being shown to be premature, as in the case of Mark Twain at the time of his much-quoted comment, and country music star Chad Morgan. Best known for his goofy teeth and saucy lyrics, the 76-year-old Australian seen on stage this year at the Woodford and Tamworth festivals, the latter as a shopping mall regular, is the star of a recent documentary called Not Dead Yet.
Perhaps that’s a title print newspapers could consider.