The newspaper industry continues in a downward spiral, struggling to find new sources of revenue. Subscription rates are falling, and the attempt to harness the online world has resulted in nothing short of lackluster results.
Whether they believe it or not, the newspapers are engaged in an all-out war over their local advertising dollars. Some of it is evolutionary, but much of it is revolutionary– a direct frontal attack by the big online entities.
The numbers released in the FEDERAL TRADE COMMISSION STAFF DISCUSSION DRAFT from June 15, 2010 says it all:
For most newspapers, about 80% of revenues came from advertising and 20% came from subscribers
Newspapers’ revenues from advertising have fallen approximately 45% since 2000. For
The vast supply of online sites for advertising reduces the amount that an online news site can charge for advertising at its site.
With the advent of the Internet, advertisers have many more ways in which to reach consumers.
Many newspapers still receive approximately 90% of their advertising revenues from print advertising, with somewhat less than 10% coming from online advertising. Print advertising revenues still account for more than half of newspapers’ revenues.
Existing newspapers have responded to substantial declines in ad revenues by cutting staff.
Staff downsizing has caused significant losses of news coverage.
Existing newspapers are struggling to find a sustainable business model for the future.
Some say that they’re starting to see more revenue as of late, and everything is seemingly now starting to work. Really? It reminds me of Edelman’s account of the Boiling Frog Syndrome: “If you throw a frog into a pot of boiling water, he’ll jump out. But if you place a frog into a pot of lukewarm water and slowly turn up the heat, it will boil to death.” You see, nothing has really changed. The newspapers are doing the same thing again and again and expecting a different result. It’s wishful thinking.
This is a call to all newspapers… change the game… NOW!
To effect real change, the newspaper industry must change their fundamental way of doing business. This doesn’t mean they should abandon their professional journalism. It means that they just need to change their approach and ‘how’ they do business. If they embrace this change, this may very well be their finest hour.
The newspaper industry’s strategy hasn’t changed much since their very inception. It’s still primarily focused on content. Unfortunately, this isn’t sufficient or sustainable in a world where people have access to a plethora of content — at their fingertips– for free. This legacy content-centered approach has given the newspapers tunnel vision, leaving the industry in a state of survival mode now for several years. How much more can the newspapers cut back on budgets, expenses, and resources, and still have a viable business?
It’s Time to THINK DISRUPTIVE
Thinking disruptive means moving beyond the development of a new facade on the newspaper website, creating a Facebook fan page, tacking on comments to the online articles, or erecting a paywall. The newspaper industry needs to embrace and enact real change, with a real strategy. This is about changing the newspaper’s role in the community, and above all changing their business model.
Let’s look at the newspaper’s new framework for success… a framework that will catapult them into a place where they can not only survive… but THRIVE!
1. New Role: The newspaper needs to assume the role of “curator of the local conversation.” The newspaper is the impartial center of their local community. And they have two amazingly powerful assets right in the palm of their hand– their long-time trusted brand, and their relationships in the community. They also have the power of existing advertising channels through print and online to promote their new business paradigm. These are all part of their unfair competitive advantage.
2. New Product: The newspaper now must flip the model upside down. The print edition is no longer the priority. Online is the future, so naturally their online strategy needs to be at the forefront. The flow of content is from online to print. The core of the new online business is no longer a CMS-driven website, but rather a social media marketing platform that is a mix of professional journalistic content with content generated by local people, as well as content pulled from external social media sources. This content mix will drive interest and conversation, which in turn generates more content. In this new paradigm, content begets content. Now rather than a handful of reporters, the local newspaper has an army of reporters from which they can select great content from, to drive both the online and print edition. The print edition now takes on a social media flair. With their new platform, the local newspaper gives their community a trusted place to meet and interact. And since businesses are integral to the fabric of the local community, naturally they become a part of the local conversation and are now viewed as local resources.
3. New Sustainable Business Model: With this new approach and platform, local businesses promote themselves and serve their local community like never before. Now businesses can readily leverage the power of social media in their very own community. The newspaper’s sales people shift from order-takers to active local business partners, promoting commerce in their local area. The most beautiful part is, the money stays in the local community, fostering local economic growth. It isn’t bled out to big online companies that are grabbing local advertising dollars.
The only way for the newspapers to win this war is to wage an offensive attack– employ their assets, use their unfair competitive advantage, and be bold and disruptive!