In this era, it appears there are now no rules that can’t be broken. Just last month, we were all talking about how the “free” business model simply couldn’t pay in less-thanglorious economic times. After all, the Standard’s free competitor thelondonpaper had just made its final run off the presses with pre-tax losses of £12.9m.
But were we too quick to write off “free”? In August, just under half of the total distributed copies of the Standard were sold at their full cover price. New owner Alexander Lebedev is gambling that by going free, it can raise its print run from 235,977 to about 600,000. The idea is that the resulting ad revenues from a boost in circulation will more than compensate for the lost consumer cash.
Lebedev’s back-to-the-future turn doesn’t suit everyone. Rupert Murdoch has been attempting to persuade the newspaper industry that readers now need to pay for what they read online or the future is unsustainable. He is championing a new style of membership loyalty scheme for readers of The Times and The Sunday Times to try to compensate for declining ad revenues. And just this week, The Economist has announced it is experimenting with a pay wall online.
Don’t translate old strategies to a new interactive world. Change your head before you change your business model
Our columnist Michael Nutley takes an indepth look at this new media world on page 14 and warns against taking business models from days past and transplanting them into a new era with new technology to power them. Don’t translate old strategies to a new interactive world. Work from the principle that interactivity has its own unique properties that you should embrace in order to develop a strategy. Change your head before you change your business model.
In the same way, the old idea of one dominant media channel holding sway over the others may also be defunct. It is too simplistic to argue that the internet is beating TV for ad money. Search is still doing well but the online display market is suffering. And while online video has seen a 195% boost, some people think that video online is really just another evolution of TV.
With all this confusion, it would be no surprise if marketers felt they weren’t sure where best to spend their media budgets in 2009. It’s true there are more options than ever before. But as Nutley points out, in the 15 years since the first banner ad went online, every year has brought more and more innovation at a rate never seen before in media development. Perhaps we should accept that change has become the exciting new norm.