Paul Wallbank – Brilliant Communications

What business are newspapers in?

how do newspapers survive in the 21st century?

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Paul Wallbank

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The problems of The Guardian and other newspaper groups around the world raises the question of what business they are actually in – news or advertising?

“Going digital only is not an option” was an agenda item for a meeting of Guardian executives claims the Financial Times.

Digital only however is the option most of the readers are taking with the Guardian’s online channels attracting 9.5 million UK readers a month compared to a print circulation of 6.5 million. The Guardian’s total global online audience is 65 million, ten times the size of the print edition.

Making matters worse is the trend, according to the UK Audit Bureau of Circulations (ABC), newspaper sales are declining at 16% per year while online readership is growing 14%.

As the Guardian readership figures show, the number of readers isn’t the problem and the same is true for the New York Times or the Sydney Morning Herald. More people are reading these publications than ever before, but the advertising has gone elsewhere.

Essentially a newspaper was an advertising platform, the cover price barely covered the costs of printing and distribution while the classified and display advertising provided the “rivers of gold” that made the business so lucrative through most of the Twentieth Century.

Most of those rivers have been diverted as dedicated employment, real estate, travel and motoring websites have stolen much of the advertising revenue that sustained newspapers.

As classified advertising platforms, newspapers have reached their use by date and now they have to build a model that is more focused on online display advertising and getting readers to pay for content.

Getting readers to pay is difficult when the market has been trained to expect news for free or pennies a day, a problem not helped by some newspapers chasing online eyeballs with low quality content.

Equally difficult is training sales teams to sell digital advertising, too many sales teams have grown fat and complacent over decades of flogging lucrative and easy real estate print ads.

The challenge for newspaper managements around the world is figuring out how to get the advertisers onto their online platforms and providing a product which readers value and are prepared to pay for.

It may well be that The Guardian’s management are right, that print does have a role in the newspaper’s future but first they are going to have to define what their company is and what it does.

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Comments

4 responses to “What business are newspapers in?”

  1. TNA

    You get what you pay for. Most people no longer pay for news, therefore we get the property spruiking, press release repeating, syndicated article repeating Sydders Morning Herald.

    Yesterday had a classic example of not seeing the wood from the trees; http://thenewaustralian.org/?p=2472

    Reply
    1. Paul Wallbank

      Absolutely true, Fairfax are killing their brands with lousy journalism and the property spruiking is probably the most damaging aspect of all.

      Daveinbalmain, a prolific commenter on the SMH site and your blog, called out the now redundant Readers’ Editor on the dodgy statistics being used by Andrew Wilson and others in the Herald’s property section. She didn’t understand his point, let alone the statistics or the inherent conflicts of interest that are trashing the brand.

      I’ve had countless rants about the quality of tech journalism in Fairfax publications and I just ignore it now as I find Techmeme keeps me 36 hours ahead of the SMH.

      For Fairfax, they have to fix the journalism and this will require hiring SMH, Age and AFR editors with the balls to demand good writing and real news. I don’t think management are capable of this.

      Reply
  2. TNA

    In th eUK, the Times went down a similar path; big advertising revenue from the “Bricks and Mortar” section, which clouded their editorial vision of the wider economic climate. When financial and economic journalists are writing pieces for the lifestyle section and worse, vice versa, you know things are going to custard.

    Hence the ridiculous mea culpa from Anatole Kaletsky at the end of 2008 for not spotting the bubble that his opposition over at the Telegraph had been pointing at for 2 years.

    And now it’s behind a paywall so doesn’t exist.

    Reply
  3. thomas

    more of this under the subject ‘should we trust our kids to Apple’. what would any 1 have to say for all these below including potential of fb n other social networks/media, apps world, cloud computing, gestural tech n so on? things are changing due to tech including IT including social media/networks, apps worlds, cloud computing n so on which are shifting business models, industries n lifestyles. trade shows themselves have virtual reality. then, look at blended learning (distance education n at physical locations)-tech-http://www.knewton.com/blended-learning/ (50% of high school would have online learning in US by 2019)(that link has the 6 basic types of blended learning where the last 2 types are mostly online). then, self service revolution which came about a century or 2 ago. also, look at virtual offices (the legal and other professions r changing around the global not just due to globalization, balance of work and life but also due to tech including virtual offices).the yuan mayb challenging the us dollar but even the currency is shifting slowly more towards tech as nowadays can use even mobiles to pay for goods. there’s also the electronic cards as well as virtual currency (virtual currencies r mostly used within online world though if i’m right, FB has also used to for real physical products). then, there is also 3D printing, gestural technologies also used at trade shows n so on.

    Reply

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