Innovation across our industry is gathering pace, ranging from Axel Springer’s extraordinary success in Poland and the new product models in Germany to the free, street extensions in London and, of course, the ever-growing list of free dailies.
New product development is at last becoming a common feature of our industry. Of course, there have been many newspaper by-products - supplements, weekly or monthly sector publications and classified guides. And most newspapers have now embraced the Internet. But newspaper companies have been slow and reluctant creators of new mainline products. This is partly due to an inherent belief that we already create something original every day, but it is also due to a misplaced cultural assumption: that having gathered and packaged our content into one brand, it is somehow unhealthy to use it in another.
Coke only in bottles
Imagine if Coke never moved from glass bottles or if Mercedes only offered one model, engine size and color. And what would happen if there were only one type of Colgate toothpaste?
I can almost hear the cacophony of protest at my comparison of newspapers to other products. How dare I call the newspaper a product! In many quarters, such comparisons remain heresy.
But remember: Without faith, we’d have no heretics, and it is our faith that has sustained our industry for 400 years.
Our belief in the value of the newspaper is what in truth drives most of us in this wonky business. The editor’s faith in his (or her) own judgment and his capacity to represent his flock through his pages is what sets a great editor apart from mere humans. To watch a good editor on a bad day is a magnificent thing.
Holding industry back
Such single-mindedness is the industry’s greatest asset, but its collective impact is also what is holding us back. It’s hard to get emotional about Coke or toothpaste (I can’t say the same about the Mercedes), but in the case of newspapers, our emotional attachment to what we do has to some extent clouded our ability to do it better. In too many newspaper companies, our inability to move on from our emotional traditions has resulted not in entrepreneurialism but accepted short-term greed.
If our great traditionalists do not accept they are slaves of the market, they will become slaves of the accountants. Newspapers have to learn from the Cokes and DaimlerChryslers how to repurpose and reposition their content, in the process building quality as they target different customer groups.
Transformation
New product developments in Germany are a case in point.
The German mainstream press is largely subscriber-based. But two players, Axel Springer and Holtzbrinck, have created new products designed to appeal to younger audiences through street sales. These hybrids repurpose content and staffing from established titles to create new products either presented as new brands (Holtzbrinck) or extensions of existing ones (Axel Springer).
Many subscription-based papers, with single-copy sales concentrated around transportation hubs, are feeling the pressure from free dailies. Here is a great way to counter this effect and establish a new product among a younger, more mobile generation.
First lesson
This is the first lesson in Newspaper Product Development - create new products that reflect different distribution channels.
Think about it: Most consumers of Coke use all its value.
Drivers and passengers of cars use 95 percent of their autos’ components every time they travel.
But newspaper readers - in mature Western markets at least - typically read only a quarter of the material put in front of them.
Most advertisers are targeting only a minority of our readers. As a newspaper consumer, I haven’t read a TV guide, recruitment section or sports pull-out for decades.
TV and radio are, of course, the same. Even the most moronic television viewer - and the more moronic they are, the more they view - consumes a minority of available output.
But TV and radio have little direct variable cost attached to their unconsumed output. By contrast, more than 60 percent of a newspaper’s direct variable costs are unconsumed and thus wasted.
Looking for alternatives
Once again, the bastions of traditionalism come out to protest. Yes, they say, readers may only read 25 percent of an edition’s content, but they all read a different 25 percent. True, but do we know that the spread is even?
The other traditionalist argument is that if we seek to give advertisers only those readers who are interested in their product, we will not be able to charge them the same price.
In this case, the advertisers worked this out for themselves decades ago, which is why so much of what was newspaper revenue now appears in targeted classified products.
Instead of getting less revenue for less cost of output we now get no revenue for the same cost of output.
I hope that both of these rather crudely presented arguments demonstrate that there are a range of alternative ways to think about delivering our content and advertising to the market. What’s more, these methods mesh with the changing demands from our readers and advertisers.
Inevitably, as they (whoever they are) say: There is more to it than that.
I know that many reading this will react to my comments with derision.
But my response is simple. Do you have the facts - the measurable data - to argue an alternative position? Or is your skepticism based on your traditional views of the business?
The facts speak for themselves. The opportunities for growth are before us.
Jim Chisholm is a consultant and strategy advisor to the World Association of Newspapers and director of the association’s Shaping the Future of the Newspaper project, which looks at new developments in the newspaper industry. He can be reached via e-mail at jim.chisholm@futureofthenewspaper.com. More information about the project is available at www.futureofthenewspaper.com.
