The newspaper industry’s financial health is almost hopeless. Traditional media has survived with water through its nose because it has failed to prioritise investments in digital media.
But there is salvation. Traditional media needs to create new sources of revenue to make up for what they lose in the digital life with advertising and circulation revenues.
I conducted research at Columbia University that remains very current. Called “The Business Model for Digital Journalism,” the report is subtitled with a hopeful phrase: “How newspapers should embrace technology, social, and value-added services.”
In this year of 2015, Johannes Gutenberg’s printing press – one of modernity’s most important achievements – turns 576. Over the span of almost six centuries, a business model has developed and been improved upon to make journalism a powerful, respectable, and profitable industry.
Without a doubt, one of the best examples of this strength is The New York Times, internationally acclaimed for the quality of its journalism.
In 2000, the last year of the 20th century, the newspaper’s parent company earned revenues of US$3.5 billion with operating profit of US$636 million. Net income was US$397 million or 11% of revenue for a very solid margin as compared to other industries, where the average margins of Fortune’s largest 30 publicly traded companies were 8.5%.
These figures derive from the acquired capacity to compose revenue from advertising and newspaper sales that covered the cost of a reporting team of more than 1,000 editors and reporters around the world.
Fourteen years later, in 2014, the same company saw revenue fall to US$1.5 billion with operating profit of US$92 million with net income of ......[more]
01 December 2014 · By Wolfgang Bretschko
One of my favourite video clips on YouTube is a short piece of a presentation given by Al Gore, the former vice president of the United States.
He shows what happens if a frog jumps into a pot of boiling water: he jumps out immediately. But if you put the very same frog into pot of lukewarm water and you bring it to boil slowly, the frog stays in the water until ...
We are very often in situations where we do not recognise dramatic changes around us because the development itself unfolds very slowly but steadily. And when we realise the impact of the development, it’s very often too late to change the course.
If one compares the situation of the newspaper industry with the frog in the pot, one will find many similarities. For many years, we have seen the slow but steady decline of our readership. We realise the water around us is getting warmer and warmer, but nobody is ......[more]
13 October 2014 · By Gloria Arlini
The print industry is battling a headwind of digital disruption. And like any industry amid turbulence, magazine publishers need to dig deep for the courage to transform — not just to ensure survival, but more importantly, to advance resilience.
This was the essence of the speech by our SPH editor-in-chief of English and Malay newspapers, Patrick Daniel, when he spoke about transforming the media business in the digital age last year. The words were not verbatim — this author admits to be seduced by Christensen’s idea of disruptive innovation — but the call for transformation was unmistakable in its urgency.
The publishing business needs to accurately identify its core strengths and relative advantages, to quickly formulate responses in this volatile media climate.
This is the story about one such journey of transformation. This is a narration of learning processes we undergo in SPH Magazines as we revolutionise our businesses by disrupting the traditional magazines business cycle and opening new opportunities in the process.
The death watch: How do we get to this point?
Contrary to how it may sound, there’s nothing cool about this. In fact, our journey began from an unenviable starting point: a death sentence. Such as this one. Or this one. And since third time’s the charm, this one.
Clearly the old publishing model no longer works. Magazines cannot survive ......[more]
22 September 2014 · By Gina Creegan
The story is familiar. Fairfax Media knew that retaining and attracting the best available staff, creating a culture of collaboration and innovation, and increasing online focus were the keys to success. The answer to how to do that in the face of significant change in the media industry was not so obvious.
In pursuit of answers, Fairfax realised that a key enabler to reaching its business objectives would be a new workplace strategy covering property, technology, and staff.
In August 2012, in a move that signalled a key change in its workplace strategy, the People and Culture sub-committee of the Fairfax Board approved what it called the “Real Time Working Project” (RTW).
The project focussed on our 2,400 staff in Melbourne and Sydney. It embraced upgraded and flexible building fit-outs, a technology upgrade that created an anytime, anywhere set-up to enable ......[more]
25 August 2014 · By Jim Chisholm
“There are no case studies about the future.”
I don’t know how often I have said this in reply to the question: “Jim, can you present a few case studies on what my company should be doing?”
It is many years since I lost the inclination to deliver an answer to the wrong question. So when Australia’s Newspaper Works asked me to write “a piece on what some publishers are doing to increase revenue or create new revenue streams,” much as I love them to bits, I simply ignored them.
What I’ve learned over 20 years advising publishers on growth strategies, including creating and directing the World Association of Newspapers’ “Shaping the Future of the Newspaper” project, is that if peer emulation is your only raison-d’etre, you will die.
If you really want to not only survive in an industry with a half-life, in mature markets, of around five years — but also create value for the future — you have to innovate from the heart, not the blog.
To be fair, our industry began to pass its point of inflection — where digital growth exceeds print decline — around the turn of the year, with the rates of decline slowing as finally, after 20 years living with digital, it finally ......[more]
04 August 2014 · By Siobhan Vinish
News media marketers have managed well, or at least well enough, for decades with limited budgets and limited objectives.
For a very long time, the main objective was “own the community” with few resources to achieve it or methodology to measure it.
With a limited budget, marketers have often found creative ways to execute creative campaigns — mostly using enthusiastic young people eager to schlep boxes, set up booths, and attend various business and community events waving the company flag.
Marketing took some creativity, a little bit of money, physical work, and a few great pairs of comfortable shoes.
And yes, we owned the community.
Our media companies were connected: We knew every ......[more]
30 June 2014 · By Michelle Krans
When you think about being customer-centric, it doesn’t sound revolutionary. In an age of tight resources, being customer focused is crucial for success. But what does being customer-centric mean to our clients?
We decided to ask them.
We initiated customer research with more than 1,000 decision makers across 11 markets to understand their pain points and expectations. We had them tell us, in their own words, what they needed and wanted from a media partner.
In essence, SMBs told us they wanted:
- Help managing the complexity of their media and marketing investments.
- Partners who truly understand their business.
- Proof that their investments are paying off.
Armed with that information and with a ......[more]
02 June 2014 · By Dawn McMullan
Editor’s note: Raju Narisetti was named senior vice president/deputy head of strategy at News Corp in February of 2013. Prior to this move, he was deputy managing editor of The Wall Street Journal and managing editor of The Wall Street Journal Digital Network, managing editor of Washington Post Co., and founding editor of Mint, the second-largest business newspaper in India.
Here’s why he believes in print, feels newspaper brands have a more long-term view than, say, the Huffington Post, wonders why we didn’t create the Facebook Paper app, and thinks the industry needs to be embrace the genius of a good story.
INMA: You say “brands have moved from marketers to publishers.” What does this mean and how does this bring opportunity to the media industry?
Narisetti: Lot of brands want to engage their customers, audiences, or consumers using stories. Brands really don’t want to get into the news business, but they want to get into the storytelling business around themes, topics, and occasionally around specific brand that matters to them.
GE, for example, cares about innovation, wants to be in the conversation about innovation, and wants to engage audiences with great relevant content — often in the form of storytelling.
As more and more brands realise they can target and reach their potential customers or audiences — and realise that they don’t have enough content beyond just advertising — they will figure out ways to create it themselves or partner with others who can. Many of these brands used to rely on advertising to do that and now, in some cases, they are shifting ad dollars into...[more]
05 May 2014 · By Padraic Woods
VG+ is VG’s premium subscription-based digital product and VG’s third editorial product, consisting of the best content from the printed VG newspaper with the best content from VG’s free news site.
Context-aware content — tailor made for each platform — ensures the ideal reading experience per device. Users can quickly and easily gain news insight on their mobile while enjoying a more immersive experience on the iPad.
The first version of VG+ was released in 2011 as an iPad app. It was a native application that won multiple awards, including the “Best iPad App in the World” at the WAN IFRA Cross Media Awards in 2011.
In 2013, we ditched our native apps and created a new set of VG+ hybrid apps (Android, iPhone, and iPad). The goal was to combine the best of Web technology with the best of native technology. We also created a new set of editorial tools that are tailor made to the needs of our editorial team and to creating interactive and instantly available content for mobile devices.
We had just started the VG+ 2.0 project to develop hybrid apps when Mark Zuckerberg announced, “The biggest mistake we [Facebook] made as a company was betting too much on HTML5 as opposed to native.” Speed and stability were the main factors influencing Facebook’s change of mind and move back to native.
Taking an award-winning native app and transitioning to a hybrid app was a very difficult decision. Our native app was popular with our users, it was winning awards, and we were steadily increasing the number of subscribers to our product. We still had a number of challenges with the native app — as I’ve outlined below — which we believed could be best addressed by developing a hybrid solution.
We believed that given the requirements of our project, we could combine native and HTML5 functionality in a way that would give us the best of both technologies — the flexibility of HTML5 and the speed and stability of native....[more]
17 March 2014 · By Duncan Stewart
Deloitte has been publishing “Predictions” reports about the technology, media, and telecommunications (TMT) sectors since 2001, and I have been co-authoring these reports since 2007. After 13 years, the company has gotten pretty good at it.
Our 2013 list of predictions was 85% accurate. Here, I share with you the most important short-term trends in the TMT space today, and what they mean for the media industry.
1. The decade of the device is over.
Globally, we have seen a remarkable growth in consumer hardware in the last 10 years: The global dollar value of all TVs, PCs, tablets, smartphones, and gaming consoles has gone from US$250 billion in 2004 to a projected US$768 billion in 2014. That tripling in size represents an annual compounded growth rate of nearly 12%, and is unprecedented in the history of consumer electronics.
However, that period of hypergrowth appears to be at an end, with Deloitte predicting that sales of those five devices will plateau and still be under US$800 billion by 2018. Although unit sales will continue to grow, falling prices (especially in the developing world) will cause annual growth in dollars to fall to almost zero by 2018.
The first implication is that we will likely see a shift or re-allocation in consumer spending: Lower growth for hardware almost certainly means more growth for software, services, and content.
By 2018, an incremental US$250 billion may be available for mobile apps, higher speed or bigger data plans, and media content, whether one-off buys or monthly subscriptions such as newspaper paywalls. That won’t radically transform those industries, which already have revenues of more than US$2 trillion, but a tail wind is always appreciated!...[more]