If you are at all interested in the economics of online newspaper efforts, by all means read Martin Langeveld’s detailed look at how the numbers stack up. Really good stuff.
Daily print is not a long-term sustainable model, and forward-looking newspapers, rather than exploring an online paywall, should explore transitioning to a once- or twice-weekly frequency, focusing their print efforts on a weekend edition distributed Friday. (Explore my prior musings about this for more.)
There is a core tension that exists between print and digital newspaper operations. The print guys say “hey we should be charging a subscription for digital just like we do for print” and the digital folks say “hey if we stay free we will continue our impressive traffic growth and make up what we are losing by not charging a subscription with advertising.”
Both are wrong.
Let’s start with the print side. It is self evident that conversion rates for print to digital subscription are nowhere near where they need to be to grow a sustainable digital newspaper off subscriptions that mirror the print side. As Langevald’s analysis points out with crystal clarity, it’s a money loser from day one there is no data to suggest a remarkable and unforeseen turn of events.
Now for the digital argument. In a post I wrote last year, I laid out why display advertising on newspaper websites was failing when viewed through the lens provided by print advertising products. It’s simply not scaling only a handful of newspapers have national brands that translate into the ads that networks deliver and even then the unit economics suck.
I don’t have an answer and anyone who lays out a neat 3 point plan for saving newspapers simply doesn’t understand the complexity or cost structure of this industry. This is why I am so pessimistic about the prospects for newspapers, but I do believe that going hyperlocal, everything from news coverage to local business resources, is a reasonable strategy for online newspapers to pursue. I also have a view that simply delivering the product of journalism online as it is done in print is outdated and untenable. Newspapers should therefore evolve to being more like information services than newspapers but what that means is subject to a lot of interpretation and the underlying revenue model is not something I have clarity on. One thing at a time!
Contrary to conventional wisdom, now is a great time to be developing solutions for the media vertical but only if your business model is built on a performance based revenue model. Newspapers in particular, but certainly not newspapers alone, are desperate for solutions that deliver better monetization of digital products and while they are in no position to pay heavily upfront, they do have an audience that they are willing to expose in order to find something new that works for them.
While I am pessimistic about transforming newspapers I am not pessimistic about the opportunity presented. We will see more newspapers bankruptcies and shutdowns over the course of the next couple of years and in their place new community portals and news services will rise. It’s important to recognize that there are newspapers, a mechanism for delivering news, and journalism, the former is in the throws of transformative disruption at the hands of technology while the latter has survived through countless technology disruptions.
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- Mansfield News Journal: Why can’t newspapers go offline, asks reader (blogs.journalism.co.uk)
- Newspaper groups look to online subscriptions at their own risk (telegraph.co.uk)
- Why the debate about financing journalism misses the point. (slate.com)
- What will happen to newspapers: 10 predictions (betatales.com)
- Is Mainstream Media Capitalizing on Citizen Journalism? (mizzinformation.com)
- Run An Online Newspaper Like a Startup. Please? (newscred.com)