Exactly three years ago, I wrote an article for Marketing Week headed “The death of newspapers?” Yes, the question mark was included. I said that the very word “newspaper” was a misnomer – there were plenty of other places to get the news – faster and usually free.
The challenge was to produce some form of “must have” content that a given group of consumers would either pay for and/or be attracted to in sufficient numbers to generate advertisers’ money. The more attractive the characteristics of that group, the more ad revenue would be attracted.
That content should be produced in a format that suited the preferences of that audience – online; print; podcast; mobile or whatever, but not based on the publishers’ own preferences or custom and practice.
So what’s happened? Well, there’s a lot more coverage of the state of papers, but it would seem their “death” is now often being assumed as inevitable.
On the face of it, there is an overview that supports this. The Daily Mail & General Trust had just put its Northcliffe Newspapers regional press group up for sale when I wrote that article – two years later it took it off the market because of insufficient interest.
The Tribute Company, the fourth largest newspaper group in the US, filed for Chapter 11 bankruptcy protection in December.
Circulations are still sinking and the valuations of some publicly quoted newspaper groups suggest they are beyond help. Trinity Mirror and Johnston Press are on staggeringly low valuations with multiples of only 2.6 and 1.3 times net profits.
Such is the state of ad revenues and circulation decline that if a title manages to hold its circulation stable for a month, this is usually hailed as a big success.
The growth in digital users has failed to translate into equivalent revenues because the amount that can be charged on a cost-per thousand basis for internet ads, is only a fraction of that of print advertising.
These things considered, there are some important clues out there that seem to be being missed.
Why, for example, did Rupert Murdoch spend years patiently pursuing the Bancroft family and pay $5bn for Dow Jones, owners of The Wall Street Journal? Are you going to bet against Murdoch, given his track record?
The morning after Barack Obama was elected, all of the American major papers sold hundreds of thousands of extra copies. Even after its print run was extended, copies of The New York Times were being auctioned on eBay for $50. When it’s important and when you want a record you go to a newspaper – interesting.
Some 600,000 signed The Sun’s petition demanding that Haringey Council sack the social workers involved in the case of Baby P. It demonstrates the paper’s continuing huge campaigning power, particularly when it’s combined with internet for ease of access.
Dan Sabbagh in The Times talks about the power of the digital mob – growing in intensity but stimulated by TV and newspapers. This emerging symbiotic relationship gives some important clues for newspapers in 2009.
The Economist is officially a newspaper. It only appears once a week which surely should make it a dinosaur. Well, yes it appears to have the same appeal that dinosaurs have with young children: inexorably, its circulation has grown year in, year out, here and globally, with 100,000 copies sold in 1969 and 1 million in 2004. It now sells 1.3 million with a £4 cover price.
Few can deny that the world is now a much more complex, fast-moving and inter-related place. If you want a highly intelligent view that makes sense of what’s going on, but in bite-sized chunks, then no one does it better. Interesting that this is served up on the printed page to an audience that is far from old and also internet-savvy.
Newspaper sales are in fact rising consistently – but not in Europe and North America. Is it really, as I’m told, “because other markets are less sophisticated than us?” Sounds arrogant and intellectually lazy to me: is there really nothing to be learnt from the rest of the world?
What did children and teens queue up through the night for last year? Yes, their iPods and iPhones, but also Harry Potter books. So the printed word as a medium is OK for youngsters – just put the right stuff in print.
The online versions of national newspapers have been growing extremely strongly with their number of unique users anything from 6 to 40 times (yup!) greater than that of the parent newspaper. Despite the pundits emphasising the low advertising revenue being generated from these sites, anyone with an entrepreneurial gene in their body would regard this as more of an opportunity than a problem, particularly bearing in mind the extremely low cost base and phenomenal scalability of the digital world – no paper, no printing, no distribution costs.
There’s no denying that life is tough for newspaper groups, but I can’t help feeling that many groups could deal with these challenges better. Next month I look at the form of the runners and riders in The Newspaper Survival Stakes.