Long-term Business Models Pay Off For Publishers

By: Gretchen A. Peck

There’s a scene in the film adaptation of Tom Clancy’s “The Hunt for Red October,” in which a Russian submarine commander deftly maneuvers his nearly silent vessel through a maze of ocean-bed formations and out of the path of torpedo. Through it all, the crew nervously awaits his signal to navigate a tight turn they know to be upcoming in their path. But Captain Ramius withholds his command to turn, and sits calculating and calm until just the precise moment when they need to change course and successfully make their getaway for a torpedo on their heels.

Think of it as a metaphor for what’s happening in newspapers today. Take for instance: data. There’s a new fascination with data; it can reveal a lot and send publishers chasing new opportunity, but it can also be fickle, faddish and cause them to go off course in abrupt and reactionary ways. Perhaps calm and stay-the-course strategies will serve newspapers better in the long run than any amount of experimentation and whim.

The Mobile Experiment

Collecting data on customers is a practice as old as newspapers themselves; today, it’s just done digitally. Publishers of newspapers have always wanted to know what readers want and need to read. They want to know what they think of what they read, and whether the way in which that information was delivered was useful and accessible to the reader.

Behavioral trends aren’t always consistent or have longevity. It wasn’t long ago that readers’ appetites for video led publishers down that path. Video was especially promising for social media sites—the more viral worthy, the better. Video is still popular but maybe not as much as we expected back then. Perhaps that’s simply a naturally leveling off as encountering video either online or on a mobile device becomes less novel and more ubiquitous.

When the iPad hit the scene—and other brands followed in Apple’s footsteps with models of their own—tablets seemed a saving grace for newspapers. We felt certain that this is how readers would want to read electronic versions of their favorite newspapers. They were bigger than smartphones. That was a plus. Digital editions fit nicely in spreads across their screens.

In 2011, the Philadelphia Media Network—then publisher of The Inquirer, Daily News, and Philly.com—began selling discounted Android tablets as part of program to boost digital app subscriptions.

Eduardo Delfin, vice president of circulation, recalled the roll out of that campaign. “On the positive side, it did help move the needle on circulation,” he said.

The tablet push was plagued, however, by something unforeseen: Poor technology. The tablets were problematic. Calls began to come in from readers who needed technical support. Many of the tablets were returned, Delfin said.

Still, the program was somewhat successful in that it did boost subscriptions.

Eduardo Delfin, Philadelphia Media Network vice president of circulation (Photo by Jessica Griffin/Philadelphia Inquirer)
Eduardo Delfin, Philadelphia Media Network vice president of circulation (Photo by Jessica Griffin/Philadelphia Inquirer)

Delfin provided some perspective: “Of the original 2,500 tablet-based subscriptions, we still have 631 paying subscribers. Many of the remaining 1,700 or so have opted for our replica product, and in turn we’ve made several discount offers to keep them as subscribers with our print product.

“Mobile, in general, continues to be a work in progress,” he added. “We have had upgrades to Philly.com, and we are continuing to learn, tweak and adjust to the ever-changing market.”

When it appeared that the tablet market wasn’t going to be as healthy as they’d hoped, Delfin recalled that they offered all tablet subscribers the opportunity to receive a print subscription with a digital e-edition that was delivered via an email.

“As of now, we have 629 subscriptions left from tablet, of which 16 percent also get the print product,” he said.

The Philadelphia papers weren’t the only organizations that were betting big on tablets. Just a little more than one year ago, Montreal’s La Press was reportedly aggressively going after a tablet-loving readership.

Today, La Press can still be read on iPad 2s, iPad minis and Android tablets. These apps are known as Press+. The publisher also produces La Press Mobile for iPhones and Android phones and phablets.

Phablets came on the scene as tablets got smaller and phones got bigger. Today, phones and phablets are the preferred method for mobile reading. And that makes sense, if you think of how accustomed people have become to relying on their phones for any kind of information.

Pew Research Center’s “U.S. Smartphone Use in 2015” cited 68 percent of smartphone owners rely on their phones for breaking news; 67 percent like to share pictures, videos or commentary about what’s happening in their communities, and 56 percent rely on their phones to find out about community events or activities.

And of course it’s not just news that smartphone users seek. Their devices deliver the weather, maps and directions, the name of the actor they can’t remember in the movie they’re watching, the lyrics and dance moves to the big summer hit, and even something called a Pokémon egg.

Mobile is probably a very safe bet moving forward. Virtual reality? Tough to say whether it’s a novelty that will be sated, or even whether it can be sustainable and profitable for news organizations to produce. The New York Times certainly believes in its novel impact and long-term appeal.

Social media? Tough to say how that can be monetized or whether investing in social will have a significant influence on bottom lines.

None of it should be at the expense of print, though, or become a substitute for the less sexy but effective marketing and distribution strategies—like single-copy sales—that have served newspapers well for decades, if not centuries.

The Philadelphia Media Network recently launched a new promotional campaign called the “OMG Giveaway!” Readers clip and send in a coupon that appears in The Philadelphia Inquirer and Philadelphia Daily News editions for a chance to win vacations and dining experiences. The first round inspired approximately 60,000 entries, according to Amy Buckman, manager of public relations and special events.
The Philadelphia Media Network recently launched a new promotional campaign called the “OMG Giveaway!” Readers clip and send in a coupon that appears in The Philadelphia Inquirer and Philadelphia Daily News editions for a chance to win vacations and dining experiences. The first round inspired approximately 60,000 entries, according to Amy Buckman, manager of public relations and special events.

Paying for News

The good news for publishers is that the consumer culture has quickly adapted to the idea that there’s a cost associated with delivering news and information. They may not always open their wallets to pay for it, but they’re no longer shocked when they come up against paywalls and subscription offers.

A study conducted by American Press Institute called “Paying for Digital News: The rapid adoption and current landscape of digital subscriptions at U.S. newspapers” looked at 98 U.S. newspapers with circulation of more than 50,000, and 78 percent of them have digital subscription models in place. What the industry seems to understand from this new era of digital content monetization is that paywalls need not be rigid and impenetrable.

That same American Press Institute study cited examples of when and why paywalls are “taken down.” A publisher might suspend a paywall for a period of time as part of a promotion, giving readers some time to see just how valuable and indispensible the newspaper’s content is. Perhaps there’s a special event happening in the community; that might prove a good time to allow free access to the digital product, for a period of time. Then, promote it. Get the message to the people that you’re welcoming them in this way.

Paywalls may also come down when there’s less cause for celebrating—in the case of natural disaster or emergencies about which the public must know.

Blending and bundling offers that include unlimited, anytime digital access and print editions, too, have proven popular. Readers understand the value of immediate digital information. Now, they can have that without having to forego the ritual of sitting with a newspaper and flipping through its pages—more than mere information, it’s an event. Plus, it mimics how people interact with news and information at different stages of their days, sometimes in print, sometimes on their phones, sometimes at their desktops.

The New York Times has had great results in appealing to readers with its digital publications. It recently reported a total digital subscription base of 1.424 million.

It seems that the days of fully advertising supported news publishing has gone the way of the dinosaurs. Today, advertising is so fickle that fewer can entrust their livelihoods to the whims of other businesses. Publishers have to rely, too, on subscribers, new and loyal. There’s no more dilemma about whether to monetize content; it’s only a matter of determining its worth.

As the U.K.’s Guardian Media Group adapts its business model from advertising driven to a membership model, the company announced layoffs and buyouts during the mid-summer. Poynter and MediaPost reported 250 employees lost their jobs, though the news shouldn’t have taken anyone by surprise. Jane Martinson affirmed in a Guardian article what publishing pundits had surmised—ads revenues were hemorrhaging. Without a serious rethinking of the long-term revenue model, it was going to bleed out.

“Print advertising fell sharply in the year by an estimated 25 (percent), and although the Guardian beat this market average, the decline was not offset by digital revenues,” Martinson wrote.

Marketing Service Supplier

Few would suggest that sponsored content is going to be the singular savior of newspapers. There are too many other factors at play. But sponsored content is an example of a long-term strategy that not only brings in revenue but also intrigues readers and solidifies their loyal to the newspaper brand. Done well, sponsored content at its core is about delivering information to the reader. It’s also a long-term strategy that is not at all dependent upon platform or digital devices of the day.

Earlier this year, E&P spoke to Idaho’s Coeur d’Alene Press editor Mike Patrick and director of sponsored content Marc Stewart. They were just a few months into a new sponsored content relationship with advertisers, and it was already showing great promise. Six months later, E&P asked Stewart about how the program was going.

“We would deem this a success,” he said. “It’s definitely opening doors to advertisers. It’s now part of the package of what we do. We’ve been able to reach both customers and also new customers that haven’t advertised.”

There have been some sponsored content partners that prefer to publish in digital only, but that hasn’t been a trend by any means, Stewart said. Rather, clients see value across the channels and media. Print is still very popular for sponsored content campaigns.

“Network buys” have become increasingly popular, too, Stewart noted. A recent sponsored content series on an Idaho theme park got local coverage in the newspaper, but also digital placement on the websites of the parent publisher’s (Hagadone Newspaper Group) other regional newspapers.

There have been some challenges along the way, Stewart said. For example, there’s been a learning curve about production—managing all this new content while also keeping pace with the news organization’s production schedules. “We’re refining those processes,” he said.

There’s also been a need to approach customer relations in a more nuanced way. It’s essential in the sponsored content relationship to establish goals and managed expectations right away. Stewart said he’s been fortunate in that very few clients with whom he’s worked have had misunderstandings about what the product goal was and how he planned on getting there.

Internally, they’ve set some goals, too. In time, they’d like to grow the sponsored content department, but nearly one year into the venture, Stewart remains a one-man operation, with the help of colleagues in other departments. When asked what he thinks is the ideal model for a sponsor content department, he said that it will likely depend on the market, the size of the news organization, and the goals. He suggested that some of the largest news organizations may one day have full-service creative firms within their structure, largely tasked with sponsored content projects.

Smaller, community and independent newspapers may find that they have to do those same types of projects but with very few resources or dedicated sponsored content professionals. Stewart firmly believes that a dedicated team is probably the best way to staff sponsored content.

The good news for those organizations, he suggested, is that the talent and expertise that’s required are already part of the news business. Publishers have great storytellers and graphic designers. They have innovative ad sales folks. The marketing and audience directors at newspapers today are sophisticated, analytical and even bold. A lot can be accomplished with that kind of talent.

Work All the Channels

Newspaper publishers should never stop reminding the public about the service they provide to the communities they serve. It’s not enough to just be indispensible; people have to be reminded that you are. Don’t be afraid of self-promotion—for all the channels and platforms, even print.

Distinguishing your print product is a must. Most publishers understand that by now, but have been at varying stages of experimenting just how to do that. At the New York Times, they’re adding value and hopefully intriguing readers by partnering with book publishers and authors to bring a new series of book excerpts to readers. The first excerpt will be from a novel called “The Underground Railroad” by Colson Whitehead.

Why print? According to the Pew Research Center’s “Newspaper: Fact Sheet,” which was just updated in June 2016, print is still the most endeared way to read news. “In 2015, print circulation makes up 78 percent of weekday circulation and 86 percent of all Sunday circulation,” the study revealed. That same report reminded the industry that only a quarter of advertising revenues come from digital products today, as of 2015.

Like Captain Ramius cautiously maneuvering in that undersea cavern in “The Hunt for Red October,” there isn’t much room for error today. A hasty wrong turn, a reactionary mistake, and there are real consequences. There may be something to be said for a more calm, measured, stay-the-course strategy.

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Published: September 6, 2016

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