Jim Chisholm, Strategy Advisor for WAN and Director of the Shaping the Future of the Newspaper project (www.futureofthenewspaper.com) says newspapers have much to look forward to in 2006. Here are his forecasts for the year.
By any measure the media industry is undergoing extraordinary change. Consider for a minute that MSN, Playstations, Amazon, and eBay didn’t exist in 1994. Google was launched in 1997 XX, and Skype, 3G phones, and blogging are all products of the new millennium, and two things are clear: The first is that the pace of evolution is extraordinarily fast. The second is that as it inevitably gets faster, any attempt to forecast the future will be near impossible.
Fortunately for newspapers it is not just the digital world that is in revolution. For the first time in decades we are also seeing growing levels of innovation in print. Metro has been perhaps our biggest eye-opener, with over 150 titles distributing over 20 million copies every day.
In Western European cities nearly twice as many 13-24’s now read a free daily as read a paid-for, suggestion in my opinion that a new generation of readers is evolving. The "Harry Potter" generation are better readers than any generation before them and here is one sign at least that they can be encouraged to turn to printed news.
Another encouraging factor is the rash of new newspaper products being launched by established publishers. Holtsbrinck’s News’ and ’20 Cent’, are great examples of newspapers repurposing content from their established products to create new ones. Springer’s Welt Kompact and Associated’s Standard Lite, are brand extensions that reach out to new audiences in a different time or place.
Extension and repurposing are normal practice in other industries. Imagine Colgate in only one flavour, Coke only in a bottle, and that is how our industry looks from the outside. One has to wonder at our inability to adopt such practices in the past, and our industry’s continuing rigidity and conservatism when it comes to innovation. Fortunately this is beginning to change.
Our industry is facing three major issues, which depending on our response are either colossal threats, the scale of which we have never experienced before, or magnificent opportunities for growth. My hunch is that some newspaper companies will grasp the opportunities and propel themselves into the future. Others will remain stuck and sinking in their groove.
The first of these factors lies with the aggregators - Google, Yahoo, and others. Few publishers in truth have thought through the implications of their content being crawled, commoditised and regurgitated under the Google or Yahoo banners.
In the short term these search engines may be generating valued traffic to the newspapers sites, which in turn, can be converted into ad revenues. But the long term impact of this is far more consequential. Google is building its already extraordinary reputation at the expense of the newspaper.
The second issue lies in the emergence of the new generation of "News services." Blogging started as a means of recording experiences and opinions, and has rapidly emerged as an alternative news form. OhMyNews in South Korea is the most celebrated of these. But a range of other similar sites are gathering force around the world. True many newspapers and other news web sites have successfully introduced blogs onto their sites, with a raft of other ideas for encouraging reader participation, but too many editors and journalists remain suspicious of readers being allowed an opinion. Their historical prejudice is inhibiting their willingness to grasp this major change in media consumer behaviour.
The third factor which is coming up from behind, and will ultimately be as big a catalyst for change as the Internet itself, is mobile or wireless communication. Perhaps the Telco’s have done us all a favour by demanding such high shares of transaction and transmission revenues. This has slowed down our willingness to introduce services, but also may be inhibiting consumers from subscribing, giving us time to restructure and reculture or internal organisations.
Mobile has demonstrated that media consumers will pay, for content that entertains, gratifies or satisfies. And now the growing ubiquity of wireless communication is developing the business model again, both in terms of access pricing on the move, and bring closer together the respective benefits of mobile and PC interfaces.
Add to this the fact that Boeing predicts that the scale of air travel is set to treble over the next 20 years, and it is clear that media is going to be consumed on the move. The era of the newspaper is returning, but given the first two issues above, and our aversion to change, the question is to what extent newspapers can retain their grip on their traditional domain, in a media environment that is moving in both a real and developmental sense.
The opportunities have to be far greater than the threats.
The first positive sign is the growing number of pictures and comments that are appearing in our newspapers that have been generated and sent in via mobile or email. Perhaps the most graphic illustration of this was that of people escaping from the London underground bombing.
But more and more newpapers are following the lead of VG in Norway which has developed a special portal to handle the thousands of images and messages a day from readers, which they publish in Print and online.
Elsewhere newspapers are using digital communications to track readers’ opinions, interests and demands in order to refine their content, and present analyses, polls, and petitions. It is clear that interaction and participation are going to be central elements of newspaper content in the future.
So how should editors and publishers turn these current trends to their advantage.
Newspapers must learn to accept and adopt these new developments, and adapt them to their own situation. Not every newspaper can suddenly become an interactive meeting place full of readers’ contributions over night. But each must face up to this change and introduce it in line with their readers own changing behaviours. For many newspapers such a move will be a means of reaching out to a younger more interactive generation of potential readers and this must be seen as a way of building a younger audience.
Editors must realise that reader participation is a logical extension of the current practice of building knowledge about our readers. Most newspapers now have some ability to understand their readers, either through a CRM process attached to their subscription management, or through research.
Such processes can be simply expanded either through communication through the newspaper, or through online, or email services, to maximise this communication.
Ultimately such an approach should be seen as a club. Where readers become participating members of a club, providing comments and opinions both for publication and as to how the newspaper should change its content or address new issues.
The major difference between our definition of news provision and those of our readers of news consumption is that we see news as satisfying an interest, where they see us as providing a service. Our content needs to be more and more geared to readers’ needs, rather than to their interests.
Most news is of value when (and where) it is consumed, not when it is created.
This issue of participation also relates to the important attachment that most newspapers have to the communities they serve. There is a major opportunity for newspapers to reinforce their links to their community, not only by encouraging debate about local or national issues, but also becoming the meeting point for local institutions and their citizens, and the catalyst for social inclusion and improvement.
Inevitably this will mean creating new products or versions of what we do; continuing the current trend toward innovation, and diversification. Some of these new ideas will be new newspapers.
Others will be online services. Increasingly we will see mobile services emerging.
It may be that this new spirit of participation leads to local events, or new forms of door to door marketing.
It is essential therefore that the three customer-facing departments in the newspaper - editorial, advertising and circulation - become - for want of a better expression - multi-product orientated, in two dimensions; realising that our customers want their services across a range of platforms, while acknowledging that our role now extends beyond content distribution and into sharing, and transferring knowledge.
One justified concern among editors and journalists is that they are somehow being forced out of this new media environment, by amateurs and anarchists who are determined to be heard. In fact as this trend increases, the role of quality journalism is going to become greater not less.
Instead of an editor depending on 50 journalists for his content he and his team will have to learn how to interpret and represent the contributions and opinions of perhaps 5,000 of 50,000 of his readers, each of whom will be want to say something at some time. In turn these masses will be broken down into sub-interest groups, who become new interactive communities through the newspaper.
Of course as people want to contribute so they want to be noticed. Such a trend can be turned into a marketing device, by ensuring that the newspaper provides the most respected, and followed listening point in the community. Readers can be encouraged to participate in story generation, opinion forming, and local decision taking. But of course they can only do that as subscribers, or at least registered members of the newspaper club.
Tomorrow’s news media are not going to be measured simply by their ability to break and communicate events, but by the way they filter, reflect and act on the opinions of the masses.
Surely this is one area in which Google and Yahoo are currently unable to compete.
The final question of course is where is the revenue? The glib answer is that without retention of audience, there will be no revenue, but this comment fails to reflect the opportunities for revenue generation that will emerge. The growth of online advertising revenues are one sign of encouragement, and newspapers both in Europe and North America, are clawing in more than their share of this. Mobile is also positive evidence of consumers’ willingness to pay, providing the payment system is convenient, and easily exploited.
Readers will continue to pay for high value content both in print, and digitally.
However two virtues of this participative model are that not only are readers encouraged to interact, but also they can more clearly be defined into sub-groups. Advertisers continue to split their audience demands into both mass and niche segments, and here is a perfect vehicle for providing both.
Content that is of high value will attract small numbers of paying consumers. Those of low value may attract larger volumes of consumers that can be segmented for advertising revenue generation.
The latest figures from Veronis Suhler Stevenson show that - contrary to the perceptions of many in the media industry, the proportion of revenues from content, rather than advertising, continue to grow (in the USA), from 37% in 1999 to 45% in 2009.
I am enthusiastic believer in the future of newspapers. My major ongoing worries about our industry are firstly our chronic aversion to managed risk, and secondly our failure to encourage transformation if it means we have to alter, change or damage, our traditional ways of doing business.
The rate at which our industry shows willingness to change remains very slow but I believe that newspaper companies can look forward to a robust and prosperous future providing they move quickly to respond to the threats around them, and redirect their huge range of competencies, and market advantages to exploit, rather than succumb to these new media phenomenon.
