The pay model seems to be the most workable method of transferring print subscribers to digital.
New York, NY (PRWEB) January 04, 2013
Interview with Ken Doctor, media analyst, as part of a webinar titled, "The future and promise of print media," hosted by Medialife magazine.
With media changing, it seems almost week-by-week, charting the shifts in media behavior these days is not easy for publishers. Newspapers and magazines still do a strong, if declining business, and their transition to digital forms marks several trends. In the end, the question may not be "will print survive?," but how fast and what kind of transformation will occur as more "print" is consumed online.
Doctor, the former Vice President of Knight-Ridder Digital, began his presentation by noting that print publishers must come up with new business models that shift revenue from advertisers to readers. By the end of this decade, Doctor says, "We will be a mainly digital marketplace. Clearly this is a one-way transition." While he notes that in the 2000s, print and digital began to equalize, in the 2010s "we see a substantial crossover happening." He points to the new realities of print media going forward.
INEVITABLE DECLINE OF PRINT
First, print will continue to decline in availability and use. Doctor points to the closing of the Borders' book-store chain, and Barnes & Noble placing a big investment in its Nook e-reader. Record stores have closed as music moved online, and Blockbuster video chain is also defunct, both indicators of a world moving to all-digital. For Amazon, he says, spending for e- books now surpasses that of traditional books. Also, many newspapers are cutting back on their frequency; this past September, the New Orleans Times-Picayune began to run three days per week, after having been a daily since 1847. He says the Cleveland Plain Dealer is preparing to do the same, sometime in 2013.
GAME CHANGER: READER REVENUE
A second change for the industry is what Doctor calls the "reader revenue revolution." Doctor says this is the biggest game changer out there." He cites the Charleston Post & Courier of South Carolina as an example. For the last five months, ad revenue was down between two and four percent; circulation, however was up 10%. Similarly, at The New York Times, advertising revenue is down 5.7%, but circulation revenue is up 11.7%. He notes that The Times also posted 30 million unique visitors a month to their site, and has an average of 900,000 digital subscriptions; it has surpassed their print circulation of approximately 700,000 average. These figures translate to overall revenue growth. In fact, he says, The New York Times is in a better cash position than it was two years ago.
It's the pay model developed by The Times in the last few years that seems to be the most workable method of transferring print subscribers to digital. Times' online readers can access 20 free articles per month, but then must buy a subscription to continue accessing the site (other than the front page). Also, some publications have encouraged the transition to digital in other ways --- recently a Times' digital-only subscription was actually more expensive than a digital + Sunday paper edition, giving print enthusiasts the opportunity to have both. Doctor says going forward, the newspapers' Sunday editions will likely have the most staying power.
But with print newspaper advertising revenue declining, the Post & Courier and others may have to look to other means of creating revenue -- such as event and sponsorship advertising in their local markets. Newspapers could see these kind of opportunities -- partnering with small and medium-sized businesses -- as their "third leg" of revenue in the near future. With newspaper advertising sales declining in "the high single digits," Doctor says there are 27 million small & medium-sized businesses that will be faced with media choices -- and one of those choices will be partnership with media to promote events or sponsorships.
WILD CARDS IN THE MIX
There are several wild cards in this equation, as advertisers and publishers figure out what will work in the coming months and years. There are new ways to pay, as some newspapers break apart content to sell it. Also, "GAFA," the behemoths of Google, Apple, Facebook and Amazon, which touch nearly everything that happens online, have to be figured into media decisions. These companies also sell ads, mediate ads, and maintain audience data. Amazon has also reshaped the retail marketplace, which means advertisers who sell their products on Amazon will likely link to the site in the ads.
Where do magazines stand in this mix? Doctor says it may lie in the all-access model -- offering one price to access both print and digital versions of a publication. The example of the merger between editorial websites and print magazines -- such as the creation of The Newsweek Daily Beast Company in 2010 -- is one that may be seen more often in the future. And while websites don't offer a good solution for magazines, the creation of the tablet a few years ago does, and this may be where magazines find a home in coming years. Tablet ad spending is also catching up to smartphones -- although advertising on tablet is still just 30% of what is spent on smartphone currently.
Finally, Doctor asks: do entrepreneurs have the right stuff to negotiate what is clearly a difficult landscape in the coming months and years? In the end, he says, continuing experimentation will have to take place to get a crossover formula that works.
- Rob Garver
Ken Doctor is a news industry analyst and the author of "Newsonomics: Twelve New Trends That Will Shape the News You Get" (St. Martin's Press). He also runs the book's companion website, http://www.newsonomics.com, is an analyst for the research firm Outsell and a regular consultant and speaker. He spent 21 years with Knight Ridder in a variety of roles, including as managing editor of the St. Paul Pioneer Press and as a vice president of Knight Ridder Digital.
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