Wednesday, May 16, 2007

Rethinking The Newspaper Industry

Yesterday, I was at a conference on the impacts of new media on marketing for the Capital City Communicators. One of the panel discussions centered around the changing interactions between marketers and journalists. What I found most profound after listening to the panel which included players from both sides - it was yet another example of how baffled, and stubborn most newspaper organizations are regarding the changes in the industry. These changes are rocking the foundation of a business model that is well over 100 years old. They simply have no clue on how to turn things around, so here are 10 thoughts I had after chewing on this issue for a day. I am not a journalist (at least in the mind of a journalist) but maybe that’s a good thing! Its always easier to think on the edges, when you are not trying to defend the status quo.

  1. The internet (and other new media) is not just another channel to pipe the exact same print content. Newspaper organizations need to take full advantage of the this channel's ability to provide richer interaction to provide the customer a unique experience will make it valuable and something that can either supplement or provide an alternative to traditional print media.
  2. Traditional print was a time of scarcity (of space). Now, scarcity is no longer an issue. With new media you have the ability to make anything available – not just what you think is important. The New York Times tag line has always been ‘All the news that’s fit to print’. Remove this elitist mentality from your thinking.
  3. Print is no longer effective for breaking news. It’s a time-to-market issue.
  4. Satisfy the long tail of news readers. Editors shouldn’t be choosing the content – they need to figure out ways for their customers to help them, and better yet – figure out ways to create unique content for all users.
  5. Use your online channel to better understand customer needs.
  6. Every piece of news is news to someone.
  7. People will pay for things that they see value in. If given the exact same content across two channels, but one was free, would you pay?
  8. Journalists should stop thinking of themselves as only news breakers or news creators. I believe the future is in aggregation. Aggregation of information, diverse opinions, providing local perspectives etc.
  9. Don’t just think about readers as customers in your business model – think of them as potential suppliers. Think about the full business ecosystem of a newspaper organization in the new economy.
  10. You can only have one primary customer. Think hard about who it is, and who it should be in the new economy. Readers? Advertiser? What business models will work based on this perspective?
All well and good to provide this type of commentary as an outsider right, but in a future post I will describe a couple of business ideas I came up with that might help bring a traditional newspaper business over the hump.


Justin Beller said...

While I didn't attend the first panel discussion, I think your observations on the newspaper industry can be summed up by what the event's keynote speaker, Greg Stielstra, had to say about marketing in today's society.

People keep using the same roads they've always used to market their products and services...

The roads people are used to taking are closing...

CAUTION: applying new technology to old paradigms will yeild rough roads ahead.

I believe the newspaper industry is trying to adapt, but they're having a hard time adjusting. Idaho Business Review within the last year has done a great job with their blog, their website and repositioning their newspaper. However, the challenge that lies ahead for publications like IBR is keeping the subscribers they have getting new ones. I love IBR, but I won't be subscribing to the paper once my subscription runs out. The reason is because the news I want is on their blog. They do too good of a job with that channel and I should probably feel guilty for taking advantage of it. I don't have to pay for it. Plus, I have other sources of news that satisfy my need for local and regional current events.

So, the business models papers once used are broken and the ones they are trying to replace them with are not good enough. Maybe if they (IBR and other pubs like them) when to a model where I pay for my RSS feed from them, I just might do it because I find value in their reporting.

Just some food for thought.

Phil said...

I think where the newspaper industry needs to do some serious rethinking is with selling their online ads.

Since we're on the subject of Idaho Business Review I'll share my recent experience. To be fair to IBR, they are NOT the only one I have had this experience with. Just the most recent.

I inquired about advertising on the IBR website recently and asked the sales manager to email me an online advertising rate sheet. He sent it over and I was taken back at the price. First of all, their cheapest space for a week was the same price as what I pay in a whole month with my Google Adwords campaigns. Second, they wanted a three MONTH minimum.

I was kind of insulted, but I thought, "Maybe they get a lot more traffic then I give them credit for." I asked him to send over some web traffic stats and the traffic no where near justified the price.

I'm willing to pay a premium to an extent, but it has to be justified. Raw traffic is a bit of a dated stat and I like their product and readership so once again I emailed the sales manager and asked him to send over some more metrics, like clickthrough rate, and average number of clicks. His response was that he did have access to those statistics but, "...that is not the way we position our ads with our advertisers. We are not a mega click through type of buy but much more of an impressions and image builder in conjunction with our print buys."

And this brings me to my point (there is one I swear). No web marketer in his right mind would go for an "Impressions" or "image builder" campaign on the web. That is ridiculous. If I wanted to do that I'd buy a newspaper ad. These old media outlets just don't get it. The sad thing is that this isn't the first time I've heard this bit.

Web ads are about performance, period. Paying for impressions on the web is like throwing your money away.

If they brought their prices down, and got rid of the ridiculous 3 month minimum they would easily make it up on volume. Then as traffic goes up and demand get greater, raise your prices. Basic supply and demand.

This is the reason newspapers all across the country are getting their shirts handed to them by Google. Print is out, online is in and newspapers refuse to adapt to a new media. They are trying to sell their online ads like they are print ads and it's not going to work.

All that said, I really like IBR and of course I will continue to read their blog and paper.

Kevin Donaldson said...

Phil - thanks for the comment - essentially this is part of an overall problem where traditional media outlets are overlaying exiting business models on new mediums. Rarely if ever does this work, but why does it take customer dissatisfaction to get them to start innovating? Your experience a case in point.

Patrick Lee said...

This is an important issue for many people, but especially for me. I'm a Web developer for a newspaper (Idaho Statesman). You've hit on some excellent points already and I look forward to reading more of what you have to say. Thanks.