2012 makes clear the key question publishers are facing these days.
Is it possible to safeguard the (high-quality) editorial content and their brands?
Is it too late — or still too early — for a successful transformation from print to digital media?
In Germany, in addition to losing an average of 6% of subscribers, news organisations also saw their ad sales revenues implode this year. Some newspapers and magazines reached only 80% of the last year’s revenues.
Both effects combined to create huge pressure for publishers. Traditional newspapers like Frankfurter Rundschau and special interest titles like Financial Times Deutschland are being pushed to close their doors. For print and digital.
Who can we blame for it?
The digital area was an obvious factor contributing to this failure: content for free, disloyal users, and advertisers that are pressing the prices. These are all enemies of good journalism. No one seems willing to pay for high-quality journalism.
But is the current transformation strategy of most publishers really right? Or are they hunting the wrong targets and goals?
First of all, content is not free; it is paid for by advertisers, as on television. This business model works perfectly for millions of sites.
The problem for news sites is the high production costs and the limited economies of scale that can be realised.
So the business model has to include another revenue stream, which should come from the user. But is there value for a price point?
In a perfect transition process, the first questions have to be:
- What kind of layout, content, and services can we use to adapt the core brand values of our newspaper or magazine to the digital world?
- What is our core target group?
- And what shouldn’t we do?
Most of the news and magazine Web sites are hunting the next million unique users or visits. But at what cost? Declining quality of the site — for the users and advertisers!
And low quality will generate low value. Who will pay for low value?
The mobile area shows us what is possible if we concentrate on the core brand features and the right content: Users are paying, and CPMs (cost per one thousand impressions) are higher.
Let us not run in the same wrong direction as the online guys — blindly chasing the next million users. Let us create real value for the right target group.
No one brand or title is right for everyone. And if there is the right user group, the advertisers will honour it because their scattering losses are low.
My request for 2013: Set up new key performance indicators (KPIs) for your overall digital strategy. Less traffic might be the first step.