10 Comments

Revenue Rebirth for Newspapers?

Mar 5, 2009
by

The Rocky Mountain News (Denver) just shut down after 150 years, the Seattle Post-Intelligencer ceased print operations, and the Philadelphia Inquirer went bankrupt. Countless other printed newspapers, large and small, are on the skids.

All of them have been caught with their presses down. They missed or didn’t want to acknowledge the vast sea of change occurring around them. They took the punches from radio news, television network news, and CNN – but they couldn’t survive the Internet’s knockout blow.

Built on staffs of professional journalists working in news bureaus, newspapers have too much overhead. Publishing once each morning or evening used to be adequate, but news today is instant, via websites, email and mobile devices. The Internet encourages news sharing and informational socializing – the exact opposite of traditional one-way journalism.

The most serious blow dealt the newspapers is the Internet’s free information model. This makes it virtually impossible for a paid subscription print newspaper to successfully convert to a paid subscription online publication. Chances are only a small percentage of readers would be willing to pay to read a favorite columnist online or get news from a “trusted” source.

Can newspapers see a revenue rebirth online? A few early visionaries have done it. The Wall Street Journal reported that its online paid subscriptions increased 7.4 percent in 2008, and visitors to WSJ.com increased 137 percent (Editor & Publisher). At the same time, its print edition circulation was flat.

The Wall Street Journal is a specialized business newspaper, however; consumer papers have yet to make a go of paid online subscriptions. The New York Times tried paid subscriptions for premium content but dropped the service in September 2007.

Nowadays, there is a lot of buzz surrounding the “micropayment” concept: collecting small amounts of money for individual news stories, much like paying for an iTunes song. This model has more detractors than supporters. Critics don’t see it as a viable revenue-generator.

The only revenue alternative left for newspapers may be online ads. Newspapers used to think online help-wanted classifieds and real estate ads would pick up the slack, but that didn’t happen. There was too much online competition. Can newspapers attract enough eyeballs to their websites, and keep them there, to make for a worthwhile advertising investment?

If traditional newspapers are going to have a revenue rebirth, they will have to find a way to reinvent themselves online. More than that, they will have to prove there is still a place for newspapers in the new media world. Right now, no one seems to have come up with the magic bullet to keep them from extinction.

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Barry Silverstein is a freelance writer/marketing consultant and co-author of the McGraw-Hill book, The Breakaway Brand.

Filed under: Media + Offline Marketing + Online Marketing
  • http://silentinflames.blogspot.com Chris Nee

    It's a very tricky problem to solve. I've read and written quite a bit about newspapers recently (from a previously uninitiated standpoint) and, as a web-dweller, I can't imagine myself paying for news.

    Because I don't work in an environment which requires me to have specific news at a specific time, I have no need to pay for, say, stock market news. As a result, everything I want to read can be found online for free.

    Clearly this rules out micropayments and paywalled sites. Advertisers aren't pumping the money in that newspaper websites need, and all this leaves few options.

    I outlined The Jon Stewart Model on my blog a few days ago. Stewart interviewed Walter Isaacson about this in February and suggested a 'cable TV' model, where newspapers become content houses and license that content to aggregator sites (where the advertisers already want to be).

    Are the newspapers (and journalists) ready for such a change? I doubt it. So you're right: they'll have to find a way to reinvent themselves.

  • http://www.rhinofish.com Pat Grady

    Newspapers have several huge advantages in leveraging their local markets, often with little or no competition (relatively speaking). My heart doesn't bleed for those businesses that refuse to innovate and allow others who serve their customer base better to win over mind time slice.

    Newspapers have become political puppets focused on flexing their influence, not serving their customers.

    My question today for those melancholic yesteryear yearners… when the cable company goes out of business, will there be any tears welling up?

    ps – dinosaurs should have figured out how to survive too. they shoulda seen it coming.

    pss – my g-g-dad ran an equine drayage and construction service that used heavy tackle and work animals for timber barn raising… talk about raining obsolete. horsemen got schooled.

    psss – sheesh, not enough coffee this morning, running for a cup now, i think my heart's still asleep.

  • http://theridgewoodblog.blogspot.com/ James

    the problem is not the internet ,the problem is that news papers were so slow to adapt to the new technology. It should have been a layup ,and the WSJ proved it .The other problem is the mainstream medias drive to push agendas instead of reporting news ,in the internet age it is just to obvious to all the readers and I guess sepnding all your time telling you customers you know better than they is just another failed strategy

  • Ben

    Globalization baby, the world doesn't care as much about local and really that is a small part of daily life. When you turn on CNN do you hear about a small town in kentucky and who is doing meth? No because nobody cares. We want to hear about interntional news or national news. Anything else just is not a big deal.

    Newspapers need to look at it this and I think the NYTimes is positioning itself for that. Your paper is global, it can be bought in any city and its audience is the world. You keep 1 or 2 people to blog and write local articles in big areas. Similar to the Onion using the same big news stories and having a few local ones and tweaking their papers for big cities.

    In the end if you want local news you will go to a local person who provides it on a website or small publication that can survive because they love what they are doing and don't have as much staff or costs.

  • http://www.blogtogreat.com rob, BtG

    very good post on timely problem. it's said that most print media will be gone within 10 years. the New York Times has decided to comabt declining revenue and readership by testing new opportunities with "hyper-local" blogs. read more at-

    http://www.blogtogreat.com/2009/02/ny-times-to-op…

  • Tony Pantano

    How about an insider perspecitve. I worked for the online division of a national newspaper chain for 5 years.

    The three of the main problems I saw on the 'inside' were:

    1) They tried to manage the operation of Highly competative internet business the same way they managed their near monopoly on print production. And used profits from the online business to subsidize losses on Print rather than invest in the future of the online business.

    2) They also had a very protectionist mentality…protecting the print & circulation revenue to the detriment of building a true online business. They only would dip their toe into the world of the Internet.

    i.e. you could only buy an online ad if you also purchasd a print ad as well

    3) They maintain editorial staffs that were trained at tradtional J-Schools who tried to write for the intenet the same way they write for print. I once was in a meeting with an editor that was dealing out Blog Post assingments as if they were expose pieces.

    The problem with protecting the cash cow to such a large extent is that by the time you realize the cow is dying, you have nothing else. Then you are forced to scramble. Coming from behind is not something that this industry has had to do in the past. They may emerge from this, but I suspect that they will only be a shell of their former selves.

  • http://gypsybandito.com CT Moore

    I think that if they're going to attract enough eye-balls to rely on online ads, part of the way they're going to have to re-invent themselves is by offer comprehensive social media features. If subscribers/users could build profiles and engage in debate around stories on the site, page view would likely go up.

    Also, they should consider targeted their advertising better by localizing it down to the neighbourhood. If IP address could be used to render very local advertising, they would even make it possible for mom & pop businesses to avail themselves of advertising online.

  • http://www.get-in2.com Mike Hyland

    Oh where are the liberal Socialists who work and run these newspapers going to go to spread their propaganda on the advertisers dime?? I surprised that 100,000,000 BHO headines & bilines in the last 2 years didn't makes these papers billions.

  • http://www.rhinofish.com Pat Grady

    Seattle Post-Intelligencer newspaper goes Web-only

    http://tech.yahoo.com/news/ap/20090316/ap_on_hi_t…

  • http://www.andydickinson.net/2009/03/23/ireport-the-death-of-newspapers/   ireport the death of newspapers by andydickinson.net

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