How the numbers (don’t) add up for newspapers if they axe print October 26, 2008
Posted by Jonathan Hewett in : Journalism, Newspapers, Online, USA , add a commentAlan Mutter (aka Newsosaur) picks up on a point from the ‘New Business Models for News’ summit at City University of New York, arguing that scrapping print isn’t a solution, given that 90% of US papers’ revenue comes from ads sold in the print product.
Assuming it would cut costs by 60%, scrapping the print paper would mean the following, he suggests, for a $100m-revenue publishing company with a 15% operating profit:
If the company abandoned print but were able to double its online sales to $20 million, it would lose $14 million in a year, for an operating margin of a negative 70%. To break even, the prototypical publication would have to more than triple its sales from the current levels. To make a profit of 15%, the company would have to quadruple it sales.
A particularly tough target, Mutter adds, because around two-thirds of online revenues typically come from add-on sales to advertisers who are buying space in the print edition.
But this kind of online-only operation is not a pipe-dream, maintains Tim Windsor. Responding in comments on Cory Bergman’s post, he says making it work would need a much smaller newsroom with one or two community managers to make the most of user-generated content, plus linked/licensed content. A core staff of 20 multimedia reporters, he suggests. (Those comments via Mark Hamilton.)
How will newspapers make money in future? Shopping? Travel? Sponsored editorial? October 24, 2008
Posted by Jonathan Hewett in : delicious links , add a commentMartin Moore catalogues some of the ways The Times is trying:
"Many of them [newspapers] are, and have been for some time, looking for ways to 'monetize' their reading public (i.e. milk readers for more cash).
You can get a pretty good idea of what this means by reading todays Times. I counted 21 ads for ways in which the paper could make additional revenue (not including encouraging people to buy the paper tomorrow or Saturday or one just promoting the brand). […]
And, one of the strangest, an ad for a weekly Times online 'streamlined' series with Tony Hawks – sponsored by VW Passat C (see 'A Life More Streamlined'). The remarkable thing about this is the deliberate melding of editorial and advertising – the tagline for the VW Passat is 'See the new streamlined coupe'. "
WAN: Traditional media has five years growth left – Press Gazette October 20, 2008
Posted by Jonathan Hewett in : delicious links , add a commentHave predictions of the death of traditional media been exaggerated? From the World Association of Newspapers conference:
"…Marcel Fenez [of PWC] said that although digital advertising will continue to soar over the next five years it will still only globally represent 10 per cent of total advertising for newspapers by 2012.
He forecast that global print advertising will grow 1.8 percent to $123.3 billion in 2012, while global digital advertising will grow 19.3 percent to $13.4 billion.
He said: "One of the things we need to get into context here is that traditional media isn't dead yet and won't be for the next five years."
"It's very important to think why. The over-50s are helping to sustain traditional media, and also in many of the emerging markets there is still plenty of room for traditional media. The death of traditional media is exaggerated, at least in a five-year context." "
Martin Moore Blog: Newspaper closures October 20, 2008
Posted by Jonathan Hewett in : delicious links , add a commentMartin Moore offers some historical context to Emily Bell's scenario of potential newspaper closures:
"The last major period of contraction occurred between the two World Wars when, as the first Royal Commission on the Press found, just under 25% of daily and Sunday papers closed:
‘Between 31st December 1921, and 31st December 1948, the number of general daily and Sunday newspapers published in England, Wales, and Scotland fell from 169 to 128’ (1st Royal Commission on the Press, p.73).
The Commission decided this was not a serious cause for concern, nor was the 25% reduction in the national daily press. Only if it was part of a long term trend did they feel we should be worried:
‘We do not therefore see cause for alarm in the decrease of the number of national morning newspapers from 12 in 1921 to 9 in 1948 – [although any further decrease could be worrying]' (Royal Commission, p.88)."
Local newspapers must be 'information provider of choice' online, says industry panel — Journalism.co.uk October 17, 2008
Posted by Jonathan Hewett in : delicious links , add a commentLaura Oliver on the Journalism Leaders Forum at UCLAN:
"becoming an information hub could also help address the problem of advertising, as the 'revenue base [of newspapers] is eroding along with the newspaper's grip on its audience'.
"The general concept of ad-supported news isn't broken… it's the fact that we’re not building the audiences that the advertising community wants us to provide," said [Steve] Yelvington. […]
Offering a UK perspective, Simon Reynolds, editorial director at the Lancashire Evening Post, said the notion of a local newspaper as an information portal was 'nothing new', but that the delivery mechanisms for this information had changed.
"I do believe we have to extend our reach away from news and become a more sophisticated portal," he said.
"The press need to understand where the new revenues are going to come from and build a business model on that. We must make ourselves invaluable."
Web 2.0: Chronicle of a death foretold | Media Money October 12, 2008
Posted by Jonathan Hewett in : delicious links , add a commentCrunch time is coming for Web2.0 companies, says Peter Kirwan:
"The business models underpinning social media and user-generated content are in big, big trouble.
Funding is drying up. The space available for experimentation in media planning is closing down rapidly. The cult of free looks decidedly vulnerable. […]
Suddenly, and rather miraculously, ad-funded web sites are becoming unfashionable. Paid content? It’s the new black. As one VC puts it: “Free is over; I am only interested in investing in services that customers pay for.”[…]
Welcome to the future. The breaking of web 2.0 will look a bit like the dot com crash of 2000 — only this time, everyone will be scared."
Why UK Blog Networks Are Really Failing October 9, 2008
Posted by Jonathan Hewett in : delicious links , add a commentFailing to break stories are among the weaknesses of (professional/commercial) blog networks in the UK — Shiny Media and others — according to SEO and online marketing exec Patrick Altoft:
"For years I’ve wondered why the people running UK blog networks just don’t seem to “get it” when it comes to online publishing.[…] UK bloggers need to ask themselves when was the last time they broke a news story that was a world exclusive? […]
UK blogs need to break exclusive stories and create a social media culture so ensure that the stories are spread around the world as fast as possible."
Roy Greenslade: Journalists cannot be blamed for newspaper industry's decline | Media | guardian.co.uk October 3, 2008
Posted by Jonathan Hewett in : delicious links , add a comment"We British journalists do tend to believe that American journalism is boring and unreadable. But the interesting fact – FACT – is that the declining sales and declining profits of US and UK newspapers are roughly similar in scale despite the differences between their journalism and our journalism. Here's Farhi again:
"The problem has little to do with the reporting, packaging and selling of information. It's much bigger than that. The gravest threats include the flight of classified advertisers, the deterioration of retail advertising and the indebtedness of newspaper owners.And then he moves on to the digital revolution's major effect on the business:
"The real revelation of the internet is not what it has done to newspaper readership – it has in fact expanded it – but how it has sapped newspapers' economic lifeblood. The most serious erosion has occurred in classified advertising, which once made up more than 40% of a newspaper's revenues and more than half its profits."
The economics of moving from print to online: lose one hundred, get back eight | Monday Note October 2, 2008
Posted by Jonathan Hewett in : delicious links , add a commentFrédéric Filloux, an editor with Norwegian group Schibsted, on how the numbers don't (yet?) add up for online newspapers: "In the world’s biggest market (the US), if the goal is the online equivalent of a daily newspaper, no independent, pure player, general news website is able to achieve even half of the break-even revenue required to just stay afloat. Only big news brands, powered by (still) immense newsrooms are able to pull in decent audiences (remember, we are talking of audience goals able to support a newsroom set at a fifth of big newspaper’s)."
Time for journalism academics to get real (Tim Luckhurst) | Comment is free | guardian.co.uk September 30, 2008
Posted by Jonathan Hewett in : delicious links , add a commentMight reflect lack of funding for such debates/research; low level of cross-over between business and journalism within universities; and the focus primarily on teaching journalism and, for most research, on other aspects of journalism more likely to attract funding (for research). Perhaps Luckhurst will be asking Kent Messenger group to fund it…
"There is a real opportunity here for journalism academics to step beyond the stale and abstract and engage with harsh reality. Can we stimulate a plausible, productive debate about the media economics of the internet era? Can we devise a model in which good reporters can be employed and good journalism can thrive? It would be the best possible response to those who doubt whether journalism has a place in universities."