The Zukunft

Jonas Huckestein's blog about technology, entrepreneurship and stuff like that

The Future Of Newspaper Publishers (Embrace The Working-Time Activity)

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[tweetmeme source=”jonashuckestein” only_single=false]Since some people have been complaining that this has become a nerd’s blog, I thought I’d also share something else I think about from time to time.

There seems to be a discussion going on about how newspapers can maintain their business model in the connected world we live in. They are suddenly competing in a global market in which the consumers spend little more than one minute reading news and expect that to be free. A couple of weeks ago Google Chief Economist Hal Varian held an interesting presentation at UC Berkeley. According to him, the decline in newspaper revenue is caused primarily because reading news has shifted from a leisure-time activity to a working-time activity. Thus, the goal must be to reinstate news as a leisure time activity. (Let’s call that the “iPad-approach”)

I disagree. The internet enabled news to become a working-time activity, but it is not responsible for the decline in leisure-time newspaper reading. In fact, according to Varian, the number of per capita newspaper subscriptions has seen a steady decline since the 50s that has only ever so slightly accelerated in the last couple of years.

So here’s a (difficult) question: How can newspaper publishers embrace their working-time-ness?

The iPad Approach Cannot Save An Entire Industry

Before we tackle the big question, let’s look at the industry’s plan to move reading news back to the living room. (Facts as-remembered from Varian’s presentation).

Apparently newspaper subscribers used to spend an average of 25 minutes per day reading their paper. Working-time online news readers spend 38 minutes a month reading online news. The largest proportion of newspaper ad revenue used to come from specialized sections such as finance or cars. These sections  receive the fewest online clicks because dedicated car- or finance-related sites have higher search engine ratings. Conversely, the sections that wouldn’t have a lot of ads in a real paper receive the most online visitors (disasters, war, politics).

Since advertising dollars are paid according to click-through rates and exposure (in time and quantity), it is obvious that simply putting articles up online supported by ads isn’t sustainable at all… If only people were to read news online as much as they used to read it offline, the publishers might be able to break even. This is why they try to make news a leisure time activity again.

Apple has shown their intention to do so by developing the iPad, which is ideal for leisure-time news consumption. Unfortunately, there are several issues that are not addressed by those plans:

  • The main reasons why people don’t read newspapers in their free-time are TV and videogames (not a lack of leisure-time news-reading devices).
  • There are a number of things people can’t do with electronic devices:
    • Put their cereal bowl on it
    • Throw it in a trashcan
    • Find it in a subway car and read it (and then throw it in a trashcan)
    • You get the point.
  • Publishers will still be in a global market. In other words: Every single publisher has to compete with the NY Times and other giants. The internet does not need 1000 editors rephrasing the exact same press release and there will definitely be casualties.
  • Only because they are reading news in the living room, people will not be more willing to pay for it. You can read Gawker publications or The Huffington Post on your iPad in the living room for free.

Anyhow, if you want to be one of the lucky publishers being saved by the iPad approach, you should do the following:

  1. Get rid of your print copies (according to Varian that cuts the total cost by 50%).
  2. Leverage the power of the internet and multimedia (or: make reading news more like interviewing a group of experts)
  3. Specialize and use your resources. A company that has world famous columnists, Pulitzer Prize winning editors and an international network of reports does not need a “Dining and Wine” or “Easy does it for Zippy: Greyhound finds a home” section. (Found on the Sun-Times homepage) Maybe hey should even get rid of Reviews of any kind because there are dedicated websites for this, as well.
  4. Don’t assume people spend more than one or two minutes a day reading your site. Make it easy. Give the masses what they need to know in order to have a rough understanding of current events.

IMHO, regarding the iPad approach, some publishers will get very rich and all others will struggle and maybe die. Let’s see what they can do about it …

How Can Newspaper Publishers Embrace Their Working-Time-ness?

Honestly, I don’t even know if it is feasible, but here are some ideas on the topic:

  • Tailoring the advertisements for instant gratification (due to time constraints at work) or business related needs would be a good first step.
  • If people have only 70 seconds to read their news, it has to be presented accordingly. That is barely enough time to read a whole article! How about a news feed with extended headlines that is tailored to you, your company and some crowd-sourced rating mechanism?
  • I know of Germany companies that provide “education” services to large corporations by e.g. showing employees possibly relevant encyclopedic entries. Corporations are willing to pay for that sort of thing.
  • Reading the newspaper broadens your horizon and educated employees with a broad horizon are of interest to all companies, IMOH (even the employees that do routine work).

I wanted to publish this post already, but I’ll keep adding thoughts as they come ;)

This Is What’s Going To Happen (Very IMHO)

In conclusion, I think this is what’s going to happen:

  • People will read news in their living room more. (but not 20 times more than now)
  • It will be free, ad-supported and running on devices similar to the iPad.
  • A lot of newspapers will die or be bought by larger players. There will be layoffs throughout the entire industry. (As evidenced by the existence of the NewspaperDeathWatch)
  • The decline in print newspaper subscriptions will accelerate.
  • Some newspapers may transition into a more specialized magazine format.
  • Whoever figures out how to leverage the working-time-ness will win big.

Whatever happens, this is bad for the newspaper publishers, but not for the consumers. Bright writers will still have employment and the access to news will be easier than ever.

P.S.: Google will almost certainly release a gPad at some point.



Written by Jonas Huckestein

2010/02/19 at 3:55 pm

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