News­pa­pers strug­gle to find path in dig­i­tal age

The China Post - - ARTS & LEISURE - BY ROB LEVER

The news re­mains mostly bleak for the Amer­i­can news­pa­per in­dus­try, strug­gling over the past decade to adapt to the new dig­i­tal land­scape.

The sale of the San Diego Union-Tri­bune in early May for US$85 mil­lion un­der­scored the hor­rific slump in the value of “old me­dia” com­pa­nies in re­cent years.

Although the sum paid by Tri­bune Pub­lish­ing was only marginally be­low the US$110 mil­lion in a 2011 sale of the San Diego group and ex­cluded some valu­able real es­tate, the news­pa­per was be­lieved to be worth as much as US$1 bil­lion as late as 2004.

The story is the same at other on­ce­proud U.S. metropoli­tan dailies: ac­cord­ing to the Pew Re­search Cen­ter, val­u­a­tions are down by more than 90 per­cent from their peaks at the Bos­ton Globe, Philadel­phia Inquirer, Chicago Sun-Times and Min­neapo­lis Star-Tri­bune.

While news­pa­pers are try­ing to get read­ers with dig­i­tal sub­scrip­tions and mo­bile apps, they are swim­ming against a pow­er­ful tide.

For the U.S. daily news­pa­per sec­tor over the past decade, week­day cir­cu­la­tion has fallen 17 per­cent and ad rev­enue more than 50 per­cent, ac­cord­ing to Pew.

And in 2014, three big me­dia com­pa­nies de­cided to spin off news­pa­pers to fo­cus on more prof­itable broad­cast or dig­i­tal prop­er­ties.

“Ev­ery news­pa­per chain talks about get­ting dig­i­tal faster. The plain truth is that de­spite al­most two decades of ef­fort, most aren’t close to where they need to be,” says Ken Doc­tor, an in­dus­try an­a­lyst who writes the New­so­nomics blog and is a con­sul­tant for the re­search firm Out­sell.

Soon, said Doc­tor, news­pa­pers will have few op­tions aside from cut­ting the fre­quency of the print edi­tion, as sev­eral dailies have done, to save ex­penses.

Can’t Find a Bot­tom

Doc­tor said the in­dus­try has failed to in­crease rev­enue since 2008, mak­ing it harder to in­vest in dig­i­tal.

In the first quar­ter of 2015, seven of the largest news­pa­per groups made a com­bined profit of US$21 mil­lion. In 2005, the large Gan­nett group alone earned US$1.8 bil­lion.

“Th­ese com­pa­nies have lit­tle to in­vest,” Doc­tor said.

“They’re still pay­ing off debt, is­su­ing div­i­dends, keep­ing up with pen­sion obligations, and an­tic­i­pat­ing print ad re­sults that can’t find a bot­tom.”

Even the New York Times, among the most ag­gres­sive in shift­ing to dig­i­tal news, ac­knowl­edged re­cently that 70 per­cent of its rev­enues come from print.

But news­pa­per or­ga­ni­za­tions need to re­think their strat­egy to act more like star­tups, says Alan Mut­ter, a for­mer Chicago news­pa­per edi­tor who is now a con­sul­tant on dig­i­tal news.

“Peo­ple in the me­dia busi­ness have to rec­og­nize they’re not in the print or broad­cast­ing busi­ness, they are in the busi­ness of at­tract­ing au­di­ences” to sell ad­ver­tis­ing, he said.

Mut­ter said many me­dia or­ga­ni­za­tions are un­der pres­sure to de­liver quar­terly earn­ings, which pre­vent a long-term strat­egy.

One ex­cep­tion is the Wash­ing­ton Post, which un­der new owner and Ama­zon founder Jeff Be­zos has been ex­pand­ing in news gath­er­ing as it re­fines its dig­i­tal strat­egy.

This has paid off with a 65 per­cent jump in dig­i­tal vis­i­tors in the year through April, ac­cord­ing to comS­core fig­ures.

Un­der Be­zos, “the Post has in­vested in re­port­ing and de­sign, they have em­bed­ded tech­nol­ogy and de­sign peo­ple, they’ve done a lot of things right,” Mut­ter said.

Although this has prob­a­bly not trans­lated into prof­its, Mut­ter said that “Be­zos takes a long view and it’s his own money.”

Some news­pa­pers have part­nered with Face­book, which will host the con­tent and de­liver ar­ti­cles to users of the so­cial net­work, po­ten­tially help­ing boost ad rev­enues.

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