Nothing is more deeply ingrained in the newspaper industry than the definition of news. It’s the foundation of what we do, the “product” we use to attract and serve consumer audiences, and the platform on which we sell most of our advertising.
Now the definition desperately needs fundamental change, as I’ll document below. If we hope to be relevant and engaging to the people in our markets, we need to start over, beginning with a fresh answer to the question, “What is news?”
Nobody in the industry wants to do this, and very few are. But a blog posting a couple of weeks ago by Andrew Davis, aimed at the magazine industry, pointed out what’s needed. Here’s the payload paragraph:
“What are you doing to change what you print? How can we blame consumers for canceling their print subscriptions when we haven’t redefined what role the print product plays in the digital world? I challenge you to put yourself in the shoes of your primary audience. Spend the day consuming the content they consume, visiting the Web sites they visit. Then ask yourself what you could do to make your print product more valuable, given the experience you’ve just encountered.” (Emphasis added.)
He’s talking about printed magazines. But the message is exactly on target for newspapers, and for both digital and print content. I’d rephrase that last sentence: “...what could you do to make all of your content more valuable, given the experience you've just encountered?”...[more]
20 January 2014 · By Steve Gray
When your industry is undergoing massive disruption, getting a glimpse of the future is priceless. The more you know about where things are going, the smarter you can be about what to do right now.
For that reason, the report released last week by Borrell Associates — “The Future of Legacy Media” — should be required reading for everyone responsible for the health and sustainability of any legacy media business in the United States and Canada. And for those elsewhere, the executive summary would make excellent reading as a directional indicator of what’s sure to happen around the world.
I’ve been a big fan of Borrell’s reports for almost a decade. Gordon Borrell and his team have consistently done an excellent job of producing data to help legacy media companies understand what’s happening to their business. And for me, the most useful pieces of their work have been their five-year forecasts of revenue and market share....[more]
16 December 2013 · By Steve Gray
In the midst of major change, we can only make the right moves if we properly understand what’s happening.
Right now, we in the mass media are wrestling with the most massive change we’ve ever seen. But, as in the parable of the blind men and the elephant, we’re only aware of the tiny part of this change that we touch every day.
The change is vastly bigger, much farther-reaching, and much longer lasting than we realise. We need to see the whole picture to understand what to do about it.
Seen in its true scope, this is the largest change in human history. It’s sweeping the planet, and we’re only in the early stages of it.
It will continue through this century and beyond, forever changing the fabric of daily human life, the dynamics of individual fulfillment, productivity, and freedom, and the structures of government, society, business, and the economy....[more]
11 November 2013 · By Steve Gray
I was surprised to hear those words come out of my mouth recently, during a strategic discussion about where our company, Morris Communications, needs to be in three to five years.
I heard myself say, “We need to realise that we’re witnessing the end of advertising as we’ve known it. Not this year, not next year, but over a period of not very many years.”
I’ll admit, there’s some hyperbole there. But there’s enough truth that anyone responsible for determining the future of a company built on traditional advertising revenue needs to start thinking that way.
I hasten to add that it’s not the end of advertising — far from it. But it’s the end — or at least the shrinking to near insignificance — of the Mass Media Era model of advertising that has been our way of life and the basis of our business.
Until I heard myself say it, I’d never framed the challenge in such extreme terms before. But I knew why I was saying it.
A few days earlier, I’d been preparing a strategic planning session for a board meeting of a small newspaper company whose board I chair.
Each year, I begin the discussion by laying out for the board the clearest views I can find regarding the future of the business. I had been putting together some charts to help the board see where our business stands and what might happen in the next few years.
First was a chart based on the Newspaper Association of America’s public reporting of annual advertising revenues among U.S. newspaper companies.
The chart shows total newspaper ad revenue, both print and digital. The steady decline is no secret in our industry, but seeing it in chart form points out how relentless it’s been.
As the stockbrokers say, past performance is no guarantee of future performance. And there are individual newspapers here and there that have beaten the trend for a quarter or two, or even for a year or two.
But for the industry as a whole, it’s hard to picture this revenue slide ending anytime soon.
That’s where we’ve been. But for good strategic planning, you also need the best possible guesses about what’s ahead....[more]
13 October 2013 · By Steve Gray
Just how disrupted is the old newspaper business model — the model that’s centered on providing news to a geographic market?
A lot more disrupted than many people in news media think.
The local media industry is scrambling to innovate around sales. This is seen, for example, in the race to create new digital sales teams and agencies selling digital marketing solutions to small and medium businesses.
And the industry is innovating around costs by consolidating, outsourcing, and otherwise whacking at the high costs of producing and distributing its products.
But I don’t see a lot of innovation happening around the content model that’s been the basis of the newspaper business for the last 100 — even 200 — years.
It seems most of the news industry still believes that gathering and distributing news is a sufficient model to support the business. And this, despite overpowering evidence of steadily declining print circulations and steadily shrinking digital audience shares.
I’ve made this case before (e.g., “News is no longer enough to support a geography-based media business model” and “Everyday goal for local media: the greatest show on earth.”) But I still think the massive and fundamental disruption of our content model — or, more accurately, our audience-creation model — is not well understood.
This time, I’ll try a visual treatment.
Let’s go back to the 1950s, the heyday of the printed news business model. Back then, news was hard to gather, hard to transmit, hard to publish, and hard to distribute — and yet we had it all well in hand.
We had reporters for local news and teletypes and wire services for news from around the region, nation, and world. And we had printing presses and carrier forces for distribution.
In that technology-challenged era, very little new information arrived in the home each a day. Radio brought some — mostly entertainment plus some national news. Television was in its infancy, with a few channels providing mostly entertainment. The only full-service source of the day’s latest news and information was the newspaper....[more]
15 September 2013 · By Steve Gray
The local media industry is in desperate need of new business models. By now, after seven or eight years of brutal shrinkage in ad revenues — in the United States anyway — it’s painfully obvious.
And heaven knows we’ve been looking. We’ve tried a lot of things: new digital advertising and marketing products, sales department re-organisations, newsroom re-organisations, different content models, new niche products and Web sites, paywalls and meters, just to name a few.
Some are even working, at least to some extent.
But here’s a model we haven’t tried: Calling on every possible local advertising/marketing customer at least once a year.
This fact jumped out at me back in May or June, when I was brainstorming with Mark Lane, Morris Publishing Group’s vice president of sales, about an upcoming sales summit for Morris sales leaders and publishers.
Mark wanted a programme that could produce real and continuous growth in the number of active advertising/marketing customers we serve.
This is a huge challenge for the entire newspaper industry, because our active account lists have been shrinking steadily for years. You could argue that this single metric — the number of active accounts — is the most critical indicator of our industry’s decline. If you haven’t looked at this metric in your company, you’re in for an unpleasant surprise when you do.
Our industry has been losing accounts in large numbers for many reasons. The biggest one is the steady rise in disruptive competition from digital and other forms of advertising and marketing. Another one is our own retention practices, which have tended to range from weak to non-existent.
Reframing the opportunity
As Mark and I discussed ideas for a conference programme to turn this around, it suddenly struck me that we were looking through the wrong end of the telescope. We were looking at how to increase the yield incrementally from our existing sales teams and processes.
Instead, we needed to start by stepping outside the limits of our existing structure. We needed to start with the vastly larger number of un-served accounts in our markets and figure out what it would take to reach every one of them regularly with our sales message.
We’re not doing that now — not even close....[more]
19 August 2013 · By Steve Gray
As more and more newspaper companies charge more and more for their content, it’s important to ask: How are they using the money?
Charging more for content seems to be a strategy whose time has come. As of the last counts I could find — dating back to early last year — Pew was reporting more than 150 U.S. newspapers had adopted digital paywalls or meters, while the Associated Press was reporting more than 300. And that’s old data.
Since then, reports of new paywalls and meters in the U.S. and around the world have continued at a steady clip. The reason is obvious: Advertising revenues on the print side continue to fall, and ad revenues on the digital side aren’t making up the declines.
Rather than continuing to cut costs dollar for dollar, media companies are turning to the consumer — starting to charge for digital content and ratcheting up prices on the printed product.
There’s a growing realisation that consumers who really want the content will pay more than our industry — particularly in the United States — has had the audacity to charge. So, at Morris and elsewhere, digital meters and paywalls are just one leg of a plan that centers on charging everyone more for our content than they’ve paid in past.
At Morris, we called it “All Access.”
In the last year, across our newspapers, we’ve been raising print subscription rates an average of nearly 20%. With the price hikes, we have announced that each subscription would now include full access to all our content across all channels, both print and digital....[more]
03 July 2013 · By Steve Gray
More than seven years into a massive disruption of the newspaper business, most U.S. newspaper companies are driving hard toward solutions they hope will stop the revenue slide and stabilize the business. They are focused mainly on two things:
- Driving costs down.
- Driving digital sales up.
With revenues down by half since 2005, painful cost reductions have been keeping most newspaper companies alive and profitable. At the same time, some companies have achieved encouraging gains in digital revenue. But few have managed to fully offset their print declines.
So the business keeps shrinking.
Fewer people, fewer resources, more consolidations, more outsourcing, more partnerships, re-doubled digital sales efforts … most newspaper executives probably believe they are re-thinking everything....[more]
02 July 2013 · By Steve Gray
Ask most people why newspapers have fallen so far in the last few years, and they’ll say, “The Internet.” And they’ll be right, in a simplistic sort of way.
But let’s look closer. What’s really happening is that the lopsided old “mass media” information system — a few providers sending limited amounts of information to huge audiences — is now being engulfed and dwarfed by an information system that is truly “mass” on both ends — sending and receiving.
Call it the Internet, but it’s really this: The end of the Mass Media Era and the dawn of the Infinite Media Era.
As the Infinite Media Era advances, virtually everyone will be able to produce and distribute content at virtually no cost. The geometrically expanding global information system will be able to handle virtually any amount of content. And virtually everyone will be able to access virtually all of it.
The cause is a combination of technology and economics:
- Technology because, over the last 20 years, digital technologies have rapidly multiplied the amount of information that can be moved electronically and multiplied the number and kinds of devices that can access this information.
- Economics because the costs of both information bandwidth and information devices have spiraled steeply downward.
And both trends will continue for the foreseeable future.
The cost of moving units of information has fallen from very expensive in the Mass Media Era to nearly zero in the Infinite Media Era. As a direct outcome, in barely 20 years, the barriers of cost and capacity that formed and defined our global information systems have been shattered. The remaining limits are fast disappearing as digital systems gain still more speed and capacity and as digital devices penetrate every economic level and geography....[more]
01 July 2013 · By Steve Gray
Newspaper companies in the United States have fallen farther and faster in the last seven years than anyone could have imagined.
Since 2006, U.S. newspapers have seen nearly 30 consecutive quarters of declines in print advertising revenues, a loss of 57%. And there’s no end in sight. Most analysts also see continued declines in the years beyond.
The recession was a big part of this, but for most of the U.S. economy, it ended in mid-2009 with a return to weak growth. Yet newspaper advertising revenues continued to plunge with few signs of relief.
This is much more than a recession. What’s happening to the newspaper business, and why?
This disaster may seem to be centered in the newspaper industry, but it’s much larger than that. In reality, this industry — along with the yellow pages business, which has suffered even more — is a canary in the mineshaft. They are the first to suffer the hard impacts of a massive and fundamental change in the global human information system.
It’s the beginning of the end of the Mass Media Era — a brief, 150-year bubble in this history of human information systems. This change is a wonderful breakthrough for humanity. But it’s a disastrous development for the mass-media businesses.
While it’s hitting first in the United States, it is advancing almost as quickly in many other national markets. The speed of the change depends on factors such as digital infrastructure, the shape of the middle class, and the current scarcity of news and information. In fact, in some large developing markets – India and China, for example – mass media business models are still advancing, even as mobile devices are disrupting them. But around the world, the question about disruption for mass media business models is not whether it will come, but when....[more]