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Future of the Newspaper Industry?
How long will the newspaper business continue as it is today? Circulation has been decreasing in every major metro area within the U.S. (at least) for the last 15 years. When does the circulation drop below a point where the editorial, classifieds, and advertising models collapse and our vehicle news needs radical innovation? Perhaps this innovation already exists with RSS, blogging, and online news search and alerts – but it seems to me just the beginning. I think it more likely that trends in citizen journalism, multi-user editorial, effective content targetting will need to grow to create sufficient online news capabilities.
Good Answers (13)
Chris C
Vice President, Product Development at PlatformQ
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Newspapers of the future will look more like magazines (niche focused, colorful, with feature stories rather than news), be more community and commerce driven (as opposed to content-driven), and have more user generated content (uploaded audio, video, comments, from ordinary citizens). They will also be much fewer in number, as consolidation continues. Newspapers face 5 big problems:
1) Declining newspaper usage, especially among millenials (those born between 1980 and 2000). Young people say they spend only 1.5 hours per week with newspapers, as compared to 5.3 hours per week for those over 62. This 1.5 hours also is a far cry than the 23 hours Gen Yers spend on TV and Internet (Forrester survey, recall-based data).
2) Few consumers will pay for news – in digital or physical form. News is available everywhere (phones, TV, PC, on a wide variety of sites). Digital news also offers much more richness (i.e. audio, video, depth of analysis, timeliness) than can be found in a once-a-day published, black-and-white physical format.
3) News is not a great context for advertising. Non-interactive, impression-based ads around stories about Iraq or the weather are not great contexts for advertisers. The proliferation of better advertising options (online, interactive TV, search) that are performance-based and more contextual will make ad sales tough for some time.
4) The classifieds business is going elsewhere. Category-killer job, car, auto and real estate sites (monster, ladders, cars.com, etc.) have been peeling away newspapers most profitable revenue stream for 10 years now.
5) Newspapers are really expensive to operate. Printing, distribution, content creation, ad sales, unions – all make it difficult to lower operating costs to compete effectively or invest in new areas.
What does all this mean? We will continue to see consolidation, efforts to lower operating costs (union renegotiations, layoffs, or competing newspapers in a local area sharing printing and distribution), and general decline over time. National newspapers (WSJ, NY Times) will thrive given their scale, albeit by building out or acquiring community features and user generated content to lower their cost structure (like blogs, social networks, wikis). They will also need to tier their services.
The local newspapers will have a tougher time. They will have to alter their value proposition to be less about news and civic events – and more about local sports, entertainment, restaurants, and other commerce oriented areas. They will have to incorporate user generated content to lower costs. Finally, they will have to continue to push the media ownership laws, allowing them to build out multi-channel presences in a local market (TV, radio, newspaper, Web) more freely – allowing them to spread costs and reach consumers over more channels.
You make a lot of very good points. Circulation has been dropping slowly, but steadily for two decades. The real issue is the age when people start regulary reading newspapers seems to be getting later, as well...it is a habit that is best picked up when young.
That said, the drop is likely to continue to be slow, and newspapers companies, like all traditional media companies, now take the internet very, very seriously. I certainly hope they succeed at leveraging their high quality, local newsrooms to be the "experts" people turn to when they are on-line so that newspaper companies can continue to fund the reporter at city hall. If not, the "citizen journalism community" will have to become more and more professional - or we citizens won't really know what is going on.
My bet is that newspaper companies figure a lot of this out, through partnerships with internet and other media companies so that we can continue to rely on a true profession to cover the news...along side the growing user-generated voices who will provide great story ideas.
Ellen L
Vice President Corporate Development & Strategy at LinkedIn
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I think the "industry" will exist for a long while... but the news*paper* business will continue to dwindle (just look at the advances eInk and others are making). Like most of big media, I think that the newspaper industry will have to recognize that they can provide a channel, a voice, and a higher-than-otherwise-to-be-expected quality assurance. While that will continue to involve creating their own unique content it will absolutely involve embracing content from "others" (call it citizen journalism or an extreme form of freelance journalism or whatever you like). Keep an eye on the "eBook industry" since I think one of the first types of content to naturally migrate to an eBook is the newspaper-type content, and there is a resurgence of (good, promising) efforts in the eBook arena these days.
If you really want to know the future of newspapers ask a 20, 25, 30, and 35 year-old how often they buy the newspaper. Younger folks have little need for print because it is so far behind blogs, social news sites, and other web sites.
If I was running a newspaper I would crash the circulation down to people who were willing to overpay for the product. The WSJ should be $5 a day--like a cup of Starbucks. The NYT on Sunday should be $10.
Crash the circ down and drive everyone else online where the high CPMs are. That's the model.
In short: a mix between the traditional print method combined with user generated content. Local newspapers will have local articles by citizen journalists/ blogging content with national content from the AP and traditional journalists. A digg like system will be used to decide, which blog articles make it to the print edition. The online edition will be an extension of the print edition, allowing the conversation to continue.
Lance W
Management Consultant
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1: Newspapers on newsprint are just a delivery mechanism for the content and advertising. The eventual endgame is clear - it's clearly more efficient to deliver content electronically than through a process involving trees, big industrial plants to make and print on paper, and transportation/distribution to shift the same.
2: Several niches will survive for longer, and even prosper. These include newspapers aimed at: older people, commuters, niche content markets (economist, WSJ), papers of record (NYTimes, WSJ), communities and poorer regions and economies. I'm unsure of the reaction of highbrow (Times) versus lowbrow (Sun), but there is bound to be one.
3: Newspaper companies will scramble to retain their customers online, and most will probably make it. Incumbents need to be already invested online, and not just in the content game if they can. The big newspapers (NYTimes etc.) will capture an increasing share of the general news, so other's will need to focus on local news (and advertising) and syndicate the rest - perhaps through more direct partnerships.
The big online disrupters, such as eBay and Google, have been working from the back of the newspaper to the front, and newspapers risk losing it all if they do not get their online revenue models working.
The endgame is a combination of the best features on on and offline - e.g. I should expect to read excerpts from my favorite and relevant blogs in my newspaper today, so that the experience between on and offline is seamless. Eventually I expect my newsprint newspaper to be some sort of robust automatically updating product that I can carry around with with me, yet still read at the size of my choice - from full size newspaper on the kitchen table to a paperback novel size while standing in the train. How long will this take? Technology-wise I'd say within 5 years, but society will take perhaps another 5 for the complete shift.
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I think the industry is approaching a fork in the road with two possible outcomes: a stabilisation if not increase in the current model, or a complete and rapid collapse. The drivers include technology (other contributors have already made the point about eInk admirably) and social/personal behaviour.
If eInk etc come on stream quickly to bring a large format look-alike for a newspaper, with a wireless connection to keep the content up to date, then the way is clear to stop cutting down trees and shipping print on paper round the country.
However I think there may also be a reaction against (or lack of takeup for) the do-it-yourself news that the current RSS etc technology enables. At the moment we are all playing with different technologies and capabilities and have yet to settle on whether it is desirable; the trade-off between the time we must invest to select and edit against the improved content we then get - compared with sitting back and getting our overview written and delivered to us.
Vidar H
Director of Technology at Aardvark Media
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First and foremost: The US is a _very_ bad indicator of the overall state of the newspaper industry. The largest US newspapers are midgets on the international market. The US' top newspaper - USA Today - only barely scrapes in at a 13th place worldwide, and of the worlds 100 largest newspapers, only 8 are US (USA Today, Wall Street Journal, NY Times, Los Angeles Times, New York Daily News, Washington Post, New York Post, Chicago Tribune).
So this is not just a technological challenge, but a cultural challenge. Japan, a country with only about 40% or so of the population size of the US, on the other hand, have 7 of the worlds top 10 newspapers, and all five top spots. The top two alone - Yomiuri Shimbun and The Asahi Shimbun - have a combined circulation more than 10 times that of USA Today. Other countries like the UK, Germany, China and Taiwan also have a far higher number of copies sold per capita than the US.
While newspapers in most countries _are_ seeing a decline, the actual rate varies a lot, and there are still many newspapers that manage to generate growth.
That said, my current job is a bet on RSS, blogs and online media taking over the classified space over time. But I don't see that as the death of newspapers, but as the death of the "copy a few AP or Reuters releases and call it a day" newspapers.
Newspapers that want to survive in print form will need to provide in depth journalism and commentary that is less time sensitive. That's what made me buy newspapers in the past, and when I rarely do now it is exactly because the newspapers I used to read mostly turned into written versions of the TV news headlines.
Or they can go down the Rupert Murdoch route, and become clones of the UK tabloids that are more focused on whipping up hysteria and running competitions and giving away free DVDs than in journalism...
But it's worth noting that many "newspapers" are managing to successfully offset their reduced revenue from declining print editions with their online services. Most of the major Norwegian papers, for instance, are morphing into online media powerhouses and are leveraging blogging and user interaction as well as new (for them) opportunities such as video and audio to engage and build closer relationships with their readers.
Owen L
Editorial Director, web content, editor, writer, publisher, business applications of online media and publishing
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Second Vidar Hokstad's answer - you just have to look at what overseas newspapers are doing to have your answer. IF you have trouble with other languages just look at the UK. The worst of them is ahead of any in the US at penetrating and adapting online.
For example, a few US outlets (NOT newspapers) are starting to copy a UK innovation - covering sporting events live in blogs. The Guardian has been doing this for more than four years and its soccer/football coverage is excellent - the focus is on snarky and humorous commentary rather than analy reporting every detail of the action - and it is very very popular. ESPN started doing this for a few things this past year (NCAA basketball I think) and it was a huge success despite being a pathetic shadow of the UK versions.
This is one small example across a much braoder spectrum. For example the Guardian also has (in a clumsy way) engaged online bloggers and taken the best on board as online writers. Etc. etc.
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Newspapers will continue for longer than I would have predicted 5 years ago... Clearly, the notion of physically printing a read-once message on paper and then physically delivering it to the reader who is then responsible for dealing with the physical waste is unbelievably inefficient!
But the margins on print advertising are still awfully appealing.
More importantly, the current newspaper has a very intuitive user interface!
And even though the advertising is really in the form of spam (same message brodcast to everyone), users actually know how to efficiently filter through the noise to find the advertising messages they're looking for.
Lastly, newspapers have editors to define relevance and employ only skilled content producers to keep the signal to noise ratio as high as possible.
So, I think newspapers will be around until content generators have a method for targeting content readers as efficient as the attempts advertisers will soon have to target potential prospects.
The other hold back is the requirement for a user interface acceptable by someone over 45. An intuitive interface means you just hand it to someone and they know how to use it. The ipod is getting close to an intuitive interface, the smart phones are not!
Greg Mangan
Hi Reid,
Radio was thought to be the death of newspapers. The result, however, was simply that newspapers stopped putting out as many special editions. Next came television. This had even less of an effect due to its inabilty to narrowcast. In the early 90's came the Internet...and the newspapers are still here.
Why? Here's a quick story: In 1986 I was playing with the idea of a 'paperless' office. It never happened. As I *arithmetically* added more IT capability to my business, the volume of information under management scaled geometrically - and my need for paper went up. When I started up an online recruiting platform in '92 (On a bulletin board! Remember them?) and then progressively moved services to a Compuserve backbone and then onto the web, my need for paper went up. And all through this process I was reading about how newspapers were dying and/or dead. To paraphrase Twain, 'The rumors of the death of newspapers have been greatly exaggerated.'
I like paper. It's a very stable technology. Portable, too! And the newspaper folk in my network know this. They'll continue to be late movers to the new technologies, but when they move they'll likely move well. Example: www.YourHub.com, which originated here in Denver. (See www.NightWithAFuturist.com - Jan 8 event for more details.)
Best,
Kevin Johansen
Director of Business Development
The Entrepreneurial Standards Forum
www.ES2Forum.net
Kevin@ES2Forum.net
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Reid: Sounds like you are specifically asking about the *paper* part since I think we all agree that there is a *news* business with or without paper. And you specifically mean daily news as opposed to free weeklies or advertising circulars. So lets look at two different aspects of the paper distribution model for news -- the companies and the distribution model. While they are linked, it is worthwhile to look at them distinctly:
Companies -- Why do companies continue to define themselves as news*paper* companies and is there any future in doing so? The stock market doesn't think so - In the last two years newspaper stocks have lost $13.5 billion in value. So why can't these companies redefine themselves as news companies with paper as one (current) distribution vehicle? Part of it is human nature, an inability to change and to accept paradigm shifts (read Thomas Kuhn on this - great model for thinking about paradigm shifts) and part of it is the money -- even though market caps keep dropping, the business is still creating great cash flow and profits which makes it hard for managers to focus elsewhere...
But in the next 10 years (excluding a few outliers), every newspaper (in the world) will confront the underlying dynamic that is making it impossible to produce a profitable print product on newspaper and physically distribute those atoms. That dynamic? Advertising is moving away from print.
Which is a good point to transition to the topic of newspaper as a distribution model. A number of people posting on this forum have mentioned that neither radio nor television killed the newspaper. Why is this? Three things - (1) access; (2) convenience; (3) depth of coverage.
(1) What do I need to access TV or Radio? In the past it has been a fixed device in my home (or radio - in my car). I don't easily have access to that device wherever and whenever I am. Mobile Internet access devices change that (for sound and video as well as text)
(2) How convenient is it for me to find what I want to know? Not at all with traditional broadcast radio and TV - I have to wait to hear or see what I want. But mobile Internet access changes that as well - now I can get exactly what I want, when I want it.
(3) Newspapers have always provided more depth on the topics than radio and TV - and more importantly provide a medium which allows me to select the depth that I go to in finding out about a topic whereas with radio and TV I am stuck with the depth that a programming decision has selected for me. The mobile Internet improves over newspapers here as well, allowing me to research a topic to whatever depth I chose.
Newspapers are done. The over 40 crowd needs a device for reading online that they are comfortable with as a replacement for print. Once that device is here, the tipping point will come very quickly.
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Hopefulyl I'm not posting this too late for you...
There's really two separate but combined answers to your question. The first is tradition readership in terms of articles. As more people consume their news online newspaper subscriptions are dropping. However in some markets here in Australia we're seeing circulation increase. This is due to a number of factors such as public transport use and there's a very large increase in weekend paper circulation as you can't spend the morning reading the paper in the sun online the same way :)
What we have found is that people treat newspapers and online differently. Newspapers here tend to be more in-depth and broader in content where as online is for breaking news and for those who "skim". It' snot usual for someone to read a big news item online when it breaks for "instant" news but then buy the paper the next day for more in-depth analysis.
Having said that though the audience is limited. We're also seeing a lot more in-paper promotion of the papers website and so on. So on the whole I think this side of it has a strong future.
Unfortunately the above is underpinned by money - of course! The revenues of newspapers come from advertising, not from the cost of the paper itself to the reader. This is where I think the battle lines are being drawn. In some cases classified advertising can make up to 50% of a papers revenue. With things like ebay, craigslist and so on people are moving away from advertising in papers. Newspapers themselves are forced to move classified ads online in an effort to compete, further gutting their own papers. I think that unless papers can find new sources of revenue to offset these losses then the that will put the content aspects at risk.
More Answers (18)
Newspapers will exist for a long time. See them blend further into the background, but ultimately embrace more cultures, more media outlets, and to start using the net like the pros do, which doesn't take as much effort as what they're doing now.
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Ivo J
CTO at Ibuildings, consultant at Zend Technologies
Best Answers in: Software Development (2), Web Development (1)
I hope that the newspaper industry will change their course in time to be able to remain frontrunners in the current age. (compare to how the record industrie completely missed the boat in the mp3 revolution and are now swimming behind the boat to keep up).
To me, it's a bout the content, not about the medium; a newspaper that is lagging behind because less people are buying their paper versions, does not recognize this. In the Netherlands, we see a rise in free newspapers; income is gained from advertising. We have about 3 of those now.
Once a traditional newspaper is free, it is more comparable to an internet news site. Then, we'll see that the focus will be more on content, and whether it's on paper or online, will matter less.
Peter H
Manager, Instructional Support Center at Temple University and Student at Temple University
I think Ellen is on target here. I expect the news"paper" industry to maintain itself to some degree, but not necessarily using the same distribution mechanisms, medium or fiscal structures.
And that's really fine, since none of those things matter in the long run; what matters is the service provided by newspapers -- the organizing and reporting of news to the general public.
If you're asking in terms of investment I'd be wary of investing in a newspaper, and more interested in investing in a news organization.
The newspaper industry will continue to evolve as new sources of distribution come along. Media professionals now recognize that the core asset isn't the newspaper but rather the content the infrastructure it generates. They continue to identify and monetize new models based on the distribution and marketplace dynamics of the media. Wireless, broadcast, radio, print, magazine, web, regional publications, etc. New distribution forms like e-paper, mobile computing (car, phone, aircraft, etc) are all part of the new fragmented paradigm. In many respects this is a mixed blessing for media companies, because their revenue streams will be more diverse and less subject to volatile swings in newsprint and production costs.
Where newspapers must begin to pick up the pace is in branding their content and their editorial assets to promote differential value to the market. Sadly, in most markets, when you ask consumers to identify their sources of news, newspapers don't have nearly the thoughtshare they should. In part its due to local marketing cutbacks through years of revenue decline and partly they haven't promoted their writers, and editors into local market news stars like television does. Who is more promoted or recognized by the public?? CBS News or Katie Couric? How about the Chicago Sun Times or Roger Ebert? Before TV no one really knew who he was outside the paper. Now a symbiotic relationship exists where he drives readership both online and offline to the paper. Other papers need to make rockstars out of their best journalists to add value to the great content they provide and cut through the clutter of other news that exists in a continually fragmented marketplace.
I would ask Tom Mohr if his research project has come up with anything yet (see link)
Links:
I dropped my subscription to the NYT print daily not long ago (but kept the Sunday sub -- which gives me free access to TimesSelect). Now I find I don't even look at the website much anymore, which is a mess and cluttered with distractions.
One Sunday, I was reading a food piece in the print edition of the Magazine. When I went online to find it a day or two later, I noticed that the only hyperlink in the piece was to Al Gore (don't ask what he was doing in a piece on scallions!). The link took you to NYT news articles on Gore. Really dumb.
So here's my proposal: How about letting advertisers buy relevant text links in the articles (integrate with Google AdWords?). If the article is about scallions, let Gourmet Garage sponsor that link. And signal to the user that it's an ad link by using a different color (green, maybe) or a double underline like Vibrant Media uses.
I know the editorial side will scream bloody murder -- just like they did about the very profitable advertorials I produced for years at New York Magazine. So let's not use the "ad links" in the hardest news stories about war and famine. That leaves, like, 75% of the lighter content -- including auto, fashion, travel... big money ad categories.
We maintain the same ad/edit wall that exists in print (where even The New Yorker runs advertorials). We tell the reporters: "Ignore the ads; just keep doing the great impartial journalism you've been doing. We'll take care of the business."
How about it?
While the readership of traditional printed newspapers may be declining in some markets, that's a very misleading thing to look at. In Europe at least (and I suspect the USA as well), the actual tonnage of paper used by newspaper printers has INCREASED slightly over the last few years.
Now look at how that raw material is used though, and you'll see the story: today there are more regionalized editions of papers, morning and evening editions, weekly "free" newspapers, and other non-traditional news publications.
Furthermore, newspaper printers are branching out with both their markets and their services - quite often investing in commercial-quality heatset web presses so that they can both offer higher-quality advertising printing and inserts in their own publications, as well as produce commercial printing in their off-hours (newspaper presses at big papers are typically only used a couple hours a day for printing newspapers).
So, as they're also getting more serious about effictively using the Internet, they're also still growing in the printing segment - maybe not vertical growth for their traditional titles, but certainly growing on the horizontal axis.
Kevin Cazabon.
(hope this isn't a dupe - I had errors posting the first comment. Opions are my own, not those of my employer, etc.)
I definitely agree with the posts that argue that while the industry will exist for a long while, the paper business will continue to decrease.
After the internet boom and thanks to the new technologies available, we the consumers, demanded media companies to publish their news in a variety of channels allowing us to personally choose what type of news to have on our screens.
As Reuters’ CEO Tom Glocer wrote on his blog, “if the 19th century was the age of the newspaper and the 20th century the age of radio and television, this century will be defined as the age of media personalisation. The news you want, when you want it. The concept is simple - forget the old media that decided what was news and when and how you would consume it. Personalisation is all about supplying news to the individual”
Personally, on an ordinary day, I check the news every 15-20 minutes on my pre-built screens (where I have chosen what will appear on my screen), but on Sunday morning, I love reading the newspaper in bed sipping a cup of coffee.
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Boris M suggests this expert on this topic:
Mark is the Actual News Guy at NowPublic.com, one of the leading citizen journalism enablers.
Margins are so tight in publishing I fully expect some newspapers and magazines to fold this year with their CEOs in total shock at the speed of their demise.
Nothing new about newspapers...they should be called oldspapers..and thats the key for me...I go to them for analysis and not news. I prefer to read analysis offline and news online. I buy a paper to accompany me on long dull trips without web access. Thats the key. Focus on what your brand has always been about: incisive and insightful editorial. And more of it please.
Newspapers dying and the news industry dying are two different things. Even if news on paper doesn't exist doesn't mean people still won't pay for (or watch ads for) authoritative news. The more information people put on the web for free, the harder (and thus more valuable) authoritative/well-presented sources will be.
Jomar R
Founder at Music Producers Forum
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Newspapers will always be around as long as society exists, never in the same position of power as before, but it will never be an extinct medium.
Advertising revenue is the life blood newspapers and magazines, and the "Free" newspaper models will continue cannibalize the traditional newspaper's revenue.
When television came, many said that this would be the end of radio.
Radio's purpose simply evolved, from episodic stories to music.
When the Telephone was invented, many said that this was the end of post.
I think that there will be some consolidation, and collapses of Newspapers and various print titles and publishers. Those that survive and grow, are those that see the changes, understand their audience, evolve and innovate.
The newspaper business is really divided into two worlds: the industrialized and the developed. In the developed world, print is growing due to the rise of a newly literate middle class and low broadband rates. As soon as broadband rises to over 15%, you see print readership go south.
In the industrialized world, newsprint will likely see the large national papers (NY Times, Wall Street Journal, etc.) survive but move to magazine pricing and move up market in combination with their web efforts. The freesheets will also survive at some level due to location sensitivities. The biggest loser is going to be the large local dailies...this is where the burial will start.
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Mathew I
I'm a technology writer and blogger at the Globe and Mail, a national newspaper in Toronto
As someone who works for a newspaper, I have a vested interest in this question :-) But I would agree with those -- including Jason Calacanis -- who have argued that the "paper" part of the newspaper business is by far the least important part of the equation. It's like being in the broadcasting business and worrying about whether people watch your content on LCD or tube TVs. In the end, the distribution format is largely irrelevant.
Admittedly, getting from where the industry is now to where it needs to be is going to be (and already has been) painful, but having news organizations that can act as filters and aggregators and community-builders isn't any less important now in the age of instant information -- if anything, it is more important.
Take a look at my blog posting ... you will find a link to the screencast, EPIC ... the history of the internet circa 2014 ... Googlezon rules the world!
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Daniel T
Social Media Marketing and Community Manager, Strategist and Addict
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Working within a specialised area of the media industry, the best chance of survival seems to come from those titles that can offer superior commentary and knowledge on a subject.
In the 25-30 age group my colleagues and I tend to get all our daily news from various websites, but a large proportion of us still buy weekend newsprint editions to be able to get away from our screens, and to enjoy a different tone and style from24/7 news updates.
User Generated Content is the current trend, but it remains to be seen how much of UGC can be obtained which is actually worth reading.
There is a collaborative blog written by some of my colleagues which explains some of the current feeling within a UK publisher
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Jessica M
Cross-functional Analyst and Manager
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