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The Future of Newspapers
Transcript of The Future of Newspapers
Erin Jackson Competition Language & Ethnicity Readership vs. Circulation Economy One of the difficulties the newspaper industry is facing is “sorting out how much of our current economic issues is purely the bad economy and how much is changes in the structure of our business and how our advertisers and readers interact with us.” – Pew Research Center, March 2012. @FutureofNewspapers: Where did all the #advertising go? A broken business model? How newspapers sell ad inventory: In 2011:
Circulation revenue = $794 million
Print advertising revenue = almost $2 billion The Local Factor “bundling” the news: Work in progress: digital challenges “The change is unlikely to have a big financial impact, positive or negative, right away, but it better positions newspaper organizations eventually to wean themselves away from print.”
– State of the News Media, 2012 - Mitch Joel, Six Pixels of Separation The rush to reinvent...
or tweak "Adapt or Die" is it saying... "Your current business model is becoming obsolete" "All of your investments (printing press, skilled labor, transportation, etc...) are now a liability" "Your technology is already considered a legacy system" "There are less and less consumers interested in what you are selling" New products, new forms of revenue “I think that consumers should be paying for news that is worth paying for, but newspapers have to find a business model that works in a new media landscape.” - Belinda Alzner,
associate editor, J-Source The Rise of Paywalls Types of paywalls Hard paywall:
Requires a paid subscription before any online content can be accessed. Soft paywall:
Allows you to access a limited amount of content without paid subscription. Jacky Chen Millennials and the News Defining "millennials" Millennials and online news - News consumption habits
Social media Attracting young readers What are Millenials? Born 1980 to 2000 * CDA: Metropolitan cities have lots of daily newspaper competition
* U.S.: Few competition in large cities, majority have low circulation (around 250, 000)
* Intense competition keeps industry healthy Readership: how many people actually read your paper Circulation: how many papers you put out on the street The readership model "better determines the strength of newspapers and their relative position to competitors in the marketplace" - Sandy Macleod, 2011.
* NADbank, daily newspapers
* COMbase, community newspapers
* Adopted in the mid-1980s Print readership news has risen by six per cent in the last five years Nine per cent read exclusively online
59 per cent exclusively read print newspapers 2008 RECESSION: failing economy, department store losses, real estate market plummeted, auto dealers went out of business - great impact on print newspaper industry through ad revenue losses $ * Labour accounts for 50 per cent of costs, distribution 30 per cent * Lay offs, shrinking size of paper, reducing production days “There might be a 90-percent chance you’ll accelerate the decline if you gamble and a 10-percent chance you might find the new model,” this executive said, and “no one is willing to take that chance.” - Newspaper executive, Search for a New Business Model, 2012. Millennials and online news 24% of millennials get news from newspapers Most popular news source: TV (61%)
Runner-up: INTERNET (59%) Changing news habits Shift from passive “tell me a story,”
to proactive “answer my question.” "On Demand" culture "People increasingly want the news they want, when they want it.” Pew State of the Media 2012 Getting news at random intervals "News Grazing": From a Pew Centre of People and Press, 2008 survey of 18-24 year olds:
20% get news "at regular times."
78% get news "from time to time." The rise of digital devices and social media 23% of Americans claim to get their news from a combination of computer, smartphone or tablet. Paywalls From the top 25 news sites in USA, 342 million unique visitors each month Facebook and Twitter The rise of digital devices and social media “The journalists' role has been far more impacted by the earlier rise of social media (tweets, blogs, LinkedIn etc. and the need to push out stories faster across other channels) than arrival of paywalls” - Tom Nunn, media relations advisor Only 9% of digital news consumers follow news through Facebook or Twitter. Facebook and Twitter are new pathways,
not replacements to popular news sites. 10 Tips from Poynter Institute and the Younger Thinking project Attracting young readers At the Ottawa Citizen: - Metered pay wall. The objective is to “establish with the most loyal digital readers some value to what we offer, while still allowing access to casual users and social sharing,” - Drew Gragg
Deputy editor of digital media. 1. Use road signs and context
2.Offer “wisdom journalism”
4.Rethink news site design
5.Experiment with new formats.
6.Expand ‘civic journalism” and community coverage
7.Put young people in the news
8.Reinvent, expand news literacy programs
9.Improve sharing features and create self-supporting content
10.Explore new approaches to television news. http://isitchristmas.com/ “[Millennials] will be ready and willing to know what's going on in the world. We just need to pay attention to what they want, and how they want it.” – Barb Palser, American Journalism Review. Most ethnically diverse generation Constant digital connection More progressive attitudes Tumultuous Finances Print Vs. Online Stagnant Model Major Obstacles Moving Forward Smart Advertising Mobile Revenue Alternative Sources of Revenue Staffing
Focusing Content Adding Value Future Business Environment of Journalism A word from Rupert Murdoch Newspapers are failing to enrich their online ad revenue
The industry is failing to adapt new business model
“Executives predict newsrooms will continue to shrink, more papers will close and many surviving papers will deliver print editions only a few times a week (Pew, 2012).”
Newspapers were traditionally accustomed to high-margin monopolies, now most are struggling to survive. Newspapers: A Tumultuous Financial Position Newspapers are losing seven print dollars for every dollar they make online
There is a tendency to treat online content the same as print
In 2011 digital revenue rose 19% while print fell by 9%, which had a much larger impact Print Vs. Online Revenue is down 40% in the last decade.
Digital sales efforts for advertising is only being focused in conventional displays and digital advertising. These areas are not growing.
These two sectors make up 76% of digital revenue and are the same categories which make up most of their print revenue.
To account for lost revenue many subscriptions have gone up in prince Stagnant Model Targeting advertising is the future – it can increase online ad revenue by 60-50% while stagnant models of online advertising can decrease revenues by 25-35%
Smart Advertising is developed by: number of clicks, visit duration, rate of returning to site, loyalty to site, awareness of brand, contribution of feedback, and lasting impression.
Only 40% of newspapers are engaging in smart advertising as a major part of their sales effort Smart Advertising Many industry executives are enthusiastic about prospects of mobile revenue but it has not amounted to much
Advertising on mobile devices account for only 1% of digital revenue in 2011.
As many consumers are normalized to free applications there is a growing concern that this is a dead market. Mobile Revenue 44% of newspapers are engaging in non-traditional revenue sources
E.g.: Events, advertising sales consultation, selling new business products
Many newspapers do not have the trained staff or resources to engage in these ventures Alternative Sources of Revenue “To accelerate the transition to digital revenue, executives agreed on one thing: Their advertising sales staff needed to change (Pew, 2012).”
Strong need to re-train and re-tool staff
This is a shift in the culture of the industry
Negative perception of industry dissuading potential new talent
84% of newspapers instituted digital sales training Staffing Specialized niche areas will retain relevance to consumers and grow market
Bundling relevant content together
Broader spectrum and more continuous coverage Focusing Content The main way to increase revenue for newsprint is by increasing content value
Consumers will only be willing to pay if they recognize the value
Added value can come in the form of: audio visuals, videos, access to exclusive information or sources, and coupons Adding Value The New York Times September 2005: Introduces TimeSelect - puts archives behind paywall September 2007: Drops TimeSelect and offers free access to all readers March 2011: Launches a soft paywall that allows users to view 20 free articles a month before paid subscription April 2012:
Reduces the number of free articles to 10 per month Paywalls in Canada Soft
Paywalls Hard Paywalls Northern News services Brunswick News AllNovaScotia.com Montreal Gazette
Vancouver Sun Vancouver Province
Globe and Mail You can't spend millions of dollars on content and just give it away. Otherwise, you're not going to stick around. - Paul Godfrey
Chief executive Postmedia Inc. Pros and Cons It hasn't affected the advertising, if anything it's creating a more direct audience. We're going to know and be able to identify who are our online subscribers, so it can be a much more specific audience that we can go back to advertisers and say this is the demographic that is reading our product online. That way we can actually target our businesses better to our products on the different platforms. - Michael O'Brien
Ottawa Citizen I think for quality, differentiated content people will pay. I don't mind paying for NYTimes or NewYorker or WSJ, but mass-trash media will have a hard time charging. Mass quality media that can't survive on gross-number eyeball traffic will have to charge unless advertisers start to pay more for better quality eyeballs. - George Emerson
Media Consultant Cheating the System Discussion Questions 1) Will people be willing to pay upfront for news or will they go somewhere else to get it for free? 2) Do you think that it is more beneficial for papers to have paying subscribers or greater traffic to their website?