By: Kristina Ackermann
By the end of the year, you’re going to have the blueprint for a successful newspaper business. That’s our goal anyway.
Going into 2012, our industry is one that is mired in uncertainty; the only constant is change. Some publishers have hung their hats on a digital first strategy, while others have doubled down on the quality of their print product. Meanwhile, ad revenue continues to decline, and readers increasingly rely on alternative sources for news and information.
In an effort to break this cycle, E&P is going to deconstruct the current newspaper business model and rebuild it from the ground up — highlighting the process of evolution that must occur if newspapers are to survive. In this recurring series, we’ll take an in-depth look at what’s working and, more importantly, what’s not working. Department by department, we’ll tear down the current assumptions of how a newspaper should be run and invent a new model for a prosperous business.
Newspapers in their current form have reached a critical threshold: remain as they are and fade away into the sunset, or reinvent themselves and claim their spot in the media landscape of the future.
In an analysis of data compiled by the Newspaper Association of America, E&P columnist and industry consultant Alan Mutter predicted that 2011 would mark the lowest point yet for newspaper ad revenue — a mere $24 billion in comparison to the record high of $49.4 billion in 2005. Though Mutter has drawn negative comments from our readers for his critique of the industry, the numbers from the NAA can’t be ignored. In the first nine months of 2011, classified advertising fell 12.9 percent, retail dropped 8.8 percent, and national advertising fell 11 percent.
Sure, digital advertising climbed 8.3 percent, but digital still contributes only 14.3 percent to overall publisher revenue, even in the era of “digital first.”
These numbers are a clear signal that something has to change. This trend is not cyclical, and it is not one that will just reverse itself without outside interference. The world is changing too rapidly for newspapers to stand around arguing about whether or not it’s the right time to try something new.
So what’s the big idea?
The key to forging a successful business model lies in not just accepting change, but embracing it. The sooner publishers let go of the good ol’ days and start thinking in the now, the quicker they can recover from their current state of decline.
This means pointing a critical eye at every aspect of the newspaper: content creation, distribution, corporate structure, technology, budget allocation, and more. Even job titles will need to be reinvented as the old methods of producing a newspaper get shown the door.
In our recurring series dedicated to the evolution of newspapers, we’ll reinvent present practices with an eye toward securing profitability in a digital future.
Beginning next month with our February issue, we’ll be looking ahead to the year 2020 to predict how successful newspaper businesses will be operating. Yes, we do believe that there will be such a thing as newspapers in 2020 — admittedly with more news and less paper than the current product calls for.
2020 is not as distant as it sounds, so you as a publisher need to start thinking now about what tools you will need to operate your business and outfit your employees, not to mention how you’ll integrate education and training into the annual calendar so your company will continue to perform at its peak capabilities. How will you convince readers that your product is worth paying for, and how will you sell those readers to advertisers in your local market?
These nagging questions won’t just go away. They will be just as real in 2020 as they are in 2012. But the future doesn’t have to be scary. With the right strategy, preparation, and execution, newspapers can finally move beyond the doom and gloom.
Coming next month
Content will always be the bread and butter of the newspaper’s business model, so content is where we will start our journey into the future. The February issue of E&P will explore the changes in content that will be necessary to appeal to the market in 2020. In rethinking newspaper content, our focus is not only on what readers are looking for and willing to pay for, but what will appeal to advertisers to help them reach their target markets.
What we’re witnessing right now is not the death of the newspaper industry, but a rebirth. By adapting successfully to a technology-driven environment, publishers can develop all-new revenue models across multiple platforms while simultaneously streamlining operations. Right now, a new generation of newspapers is emerging, will yours be among them?