By: Jennifer Saba
While every week brings fresh news of the demise of the newspaper industry — metro shutdowns, severe cuts, government curiosity — a new study suggests that newspapers do have a long-term future.
Pricewaterhouse Coopers (PWC), along with the World Association of Newspapers, released a new report on the global outlook of the newspaper industry. After surveying 4,900 consumers, 30 newspaper publishers and 10 advertisers and media agencies across the world, the research found that access to capital and a willingness to try many experiments is key to survival.
“I was pleasantly surprised with how well the senior executives we interviewed understood the problems and how well they could articulate them,” said David Moss, director of entertainment and media at PWC. “There is a universal understanding you have to have a successful digital play and still realize that print is where they are still making money.”
Moss noticed a change noting that in past surveys publishers were not as focused on digital treating it as secondary initiative. The dramatic decline in circulation and the brutal recession forced publishers to push digital to the front of their priorities, he said.
Those newspaper companies with the best long-term viability are those companies that can invest in several digital strategies at once. “What became apparent to me is those with money are trying to be agile in digital and mobile while those without money are making bets in one area — which is risky,” Moss said.
Surprisingly, Moss said that PWC did not find many executives who wanted to move toward a paid online content model. Moss, who spoke mainly to U.S newspaper publishers in the survey, conducted his interviews a few months ago. “I think where we found more interest was in moving toward niche content where there are higher CPMs (cost per thousand) paid for advertising,” he said. “Putting things behind the pay wall was not a trend in many publishers’ mind in their outlook.”
The report also took the pulse of consumers and their news habits. PWC found people have a willingness to pay for 62% for general online news content compared to 100% for general print news content. However PWC warns that does not mean that consumers would actually buy online content: When given the choice, consumers would choose free content when the quality was comparable or sufficient for their purpose.
New devices didn’t make the cut for pay either. “On average, respondents expressed no willingness to pay for general news and background information on e-paper or mobile devices, and they do not see them as alternatives for full newspapers,” according to research findings.
People are more likely to shell out for financial content — a maximum of 97% as much on average for high quality online newspapers with a focus on finance compared to general news on traditional paper. Likewise, consumers would be prepared to pay as much as 77% of what they would pay for a high quality traditional paper with general news for an online newspaper with a focus on sports, the study said.
With regards to advertisers, PWC said they still turn to major newspaper brands with loyal customer bases to reach mass markets. But the shift to digital will continue and advertisers are looking for innovative packages combining both print and online.
That said, according to some advertisers, “newspaper publishers have neither adapted to nor invested enough in new technologies,” the report said.
PWC forecasts that the global newspaper market will decline by 10.2% this year and average a 2% compound annual decrease to 2013. Publishers surveyed said they do not anticipate the recovery to begin before 2011.