Monday, 30 November 2015

The trouble with Newspapers.

Online newspapers seem to grow and grow, yet paywalls seem to fail and this is all spelling out a really difficult future for traditional daily newspapers.

This week's 'Economist' outlines the points very clearly (as they always do).

Axel Springer bought BusinessInsider in September for 442 million usd and NBC invested 200m usd in BuzzFeed, in what's perceived as an attempt by traditional publishers to bring more online inventory into traditional media ownership.

Largely because their traditional Ad revenues continue to fall. 

Between 2005 and 2014, traditional print Ad spending in US newspaper dailies has dropped -60%. As it dropped, staff and newsrooms were cut. A bleak future response then, delivering a self-fulfilling prophecy. Ad revenue falls, staff are made redundant, product suffers, ad revenue falls.

Indeed, there may come a day when print advertising per se, drops to Zero and indeed, online Ad prices are falling too, as media options (where to place them) increases widely. Increased supply drives prices down and with Social Media options (Facebook, Twitter) developing a pace, they'll suck in more and more Ad dollars from newspapers.

Getting readers to pay for news has not been a success either - marked recently by the UK 'Sun' dropping their subscriber paywall. Metered or Limited paywalls have worked for some (notably The UK FT) but with so much free content, it's not going to work well. And certainly, will not compensate for the losses in Ad revenue in any real way.

Boosting online Newspaper Ad revenue is one way, but Newspaper online Ad revenue is only up +11% since 2007 - not enough. Not nearly. 

Although while Advertisers do look for more 'native content' (sponsored content) and online video, Newspapers just do not have the skills to produce video to an acceptable standard either - nor, in some ways, should they.

Sponsored content will also have a poor knock-on affect to readers who will realise that what they're reading as "news" is in fact Advertising - and they won't like it. It's breaking brand trust.

The real super threat is Programmatic buying, now becoming standard, where an advertiser buys the reader and not the Title and so that's a real threat to publishers. They should not embrace it but difficult to see how not to either. Turkeys and Christmas.

So Media buying by Title, is coming to an end. Ad Blocking proliferation is another threat too (and notably, video is not ad blocked).

One way suggest The Economist, is for publishers to branch out into areas such as Music, Sport, Health or Religion and they note, The Boston Globe developing a health site called 'Stat' this very month. Gardening and Wine Clubs too, possibly ideal for the Sunday reader (as in The Telegraph typically), may bring in some money.

It signifies a shift away too from 'Breaking News' which of course, given the print deadlines, traditional newspapers can no longer do. They still can of course, give insights into stories that have already broken, or special investigations. But it's limited.

There's no joy in saying it, but the traditional daily Newspaper days are numbered. They're facing an onslaught through online programmatic media buying; through ad blocking; through increased digital media supply bringing lower prices; by paywalls not delivering because of free news; through lower ad revenues; and a possibility of breaking reader trust with Native Stories.

Difficult to see a way out of this.

But it is clear that Newspapermen have to consider that their biggest asset is online and not what's being printed. If they stopped printing the Newspaper and focused on their online property, they'd save a lot. And that's considered heresy.