BEYOND THE PAGE
With the life expectancy of print newspapers dwindling, publishers are hastening their push into digital.
In the 1941, Orson Welles film Citizen Kane about the rise and fall of newspaper magnate Charles Foster Kane, Kane flippantly remarks to his angered former guardian: “I don't know how to run a newspaper, Mr. Thatcher; I just try everything I can think of.”
Once, in the not-too-distant past, running a paper with a successful advertising model was a straightforward process that had been ticking along quite nicely for well over a century. A large number of people bought and read papers and therefore, a large number of businesses would advertise in them. And pay quite handsomely to do so.
Then, of course, digital disruption came along and publishers were turned on their heads, having to rethink how to keep newspapers alive while evolving to an ever-advancing digital world.
And, like Kane, they’ve been trying everything they can think of. There have been attempted mergers, talk of paywalls, new and unexpected business ventures and competing publishers have banded together in ways that would have previously been thought impossible (see Follow The Money on page 17).
Crunching the numbers
According to the most recent data from Nielsen, the number of people reading newspapers in New Zealand has grown, but only marginally.
National average issue readership for 2017 sits at 3.77 million (15-plus) compared to last year’s 3.68 million.
The most-read daily metropolitan newspaper is
NZ Herald, which has seen its readership dip a little from the year previous, from 423,000 to 415,000.
The Dominion Post and the
Otago Daily Times managed to grow their readership slightly (with the ODT seeing the largest growth), while The Waikato
Times and The Press both lost readers, with the latter losing the most, slipping quite significantly from 63,000 to 44,000.
Circulation figures are down for all of the above titles, though only marginally, with The
Dominion Post seeing the biggest dip, from 52,115 at the end of 2016, to 46,719 to the same period in 2017 (10.35 percent).
This drop in circulation is reflected in the most recent ASA annual ad revenue report, which shows newspapers brought in $353 million in 2017, while their digital properties brought in $82 million. This was quite a big drop for newspapers, from $417 million in 2016. However, digital properties did increase from $61 million for 2016.
Stuff's and NZ Herald's websites are both popular in New Zealand, sitting among the top 10 most popular websites and have both grown. Stuff drew in 2.2 million New Zealanders last April, while NZ Herald saw 1.9 million visit.
To compare, in January 2016 Stuff had 1.6 million visitors, while NZ Herald had 1.38 million.
But, despite this growth in newspapers’ digital assets, print revenue is falling faster than digital revenue is climbing and it’s difficult to see how publishers can grow their digital channels fast enough to offset the loss.
Internationally, even digital-first news sites are suffering. According to The
Washington Post, both Buzzfeed and Vice recently missed revenue targets. And Mashable, valued in
March 2016 at around $250 million, recently sold for less than $50 million.
Playing catch up
Publishers in New Zealand have been experimenting with all kinds of tactics to make up for the losses in print revenue.
Stuff has made some of the biggest of these changes, announcing the closure of 28 mastheads (making up 35 percent of its print publications) earlier this year in order to pour more money into digital and its other business ventures.
Further, it switched all of its Monday to Friday metropolitan and regional newspapers from broadsheet to compact format, as well as two Sunday papers.
Stuff chief revenue officer Robert Hutchinson says the decision to go compact was made with both advertisers and readers in mind.
“The move standardises advertising therefore saving customers time and effort with resizing and booking,” he says. “We all know newspapers are financially challenged so this was, and is, a big change.”
But, he says the change was necessary. “The physical change gave us a fantastic opportunity to enhance and sharpen up our products. It was based on listening to our readers and delivering them what they want.”
Stuff has also thrown a focus on new business ventures to grow its revenue like Neighbourly, Stuff Fibre, Stuff Pix and Energyclubnz.
“Stuff is focused on building new businesses so that we can continue to fund high quality local journalism and develop a wide range of diverse and new revenue streams,” Hutchinson says.
Competing publisher NZME has focussed strongly on its
digital assets, which can be seen in its launch of video news show NZ Herald Focus and sponsored content series The Economy Hub, in 2016.
It also announced in February that it plans to put up a paywall on its premium content, which NZME chief executive Michael Boggs says is supposed to launch by the end of this year.
“The implementation of The
Washington Post’s arc content management platform as part of the nzherald.co.nz relaunch last year provides enhanced data and audience analytics which will enable us to curate and charge for the premium and in-depth content that is unique to NZME.”
However, Boggs says NZME will continue to focus on its print products, which contribute over 50 percent of NZME’S overall revenue streams.
NZME and Stuff have also announced their intention to appeal the High Court's declining of a merger between the two companies, with the publishers hoping to pull their resources together to better compete against media giants like Facebook and Google.
Boggs says he believes the merger will improve the New Zealand publishing industry’s ability to compete with other channels and also extend the longevity of the print industry.
“We need to be able to improve our cost structure to meet the competition from other channels. We will need to find a way to do this with or without the merger.”
Richard Pook, general manager of Amplifi at Dentsu Aegis Network told Stoppress his concerns with New Zealand’s media landscape lie in the lack of scale to support two large ad-funded news websites.
“As an outsider who moved to New Zealand in February last year, I don’t think that the merger would have had a huge impact on the diversity of comment and thought,” he said.
“Most of the political discourse seems to be located around the centre already, and news comes from so many other sources. I think the risk of them disappearing altogether would have a much greater impact on New Zealand’s media landscape and wider society.”
A trusting audience
One thing newspapers still have going for them is a trusting, loyal audience.
A News Works study released by Colmar Brunton late last year found only 38 percent of consumers trust Facebook. This figure dropped further to 24 percent when respondents were asked whether they trusted advertising on the channel.
Trust was comparatively higher in traditional media, with 87 percent of respondents trusting print newspapers and radio.
Boggs says NZ Herald provides a safe place for advertisers to reach their audience.
“A lot of advertisers are rightly very concerned about how uncontrolled digital distribution of their brand through some of the leading global social platforms could lead to brand damage.”
Hutchinson agrees, saying relevance and trust are built up through years of local content and delivery.
“Because our brands have heritage, they’ve earned the respect of our readers and therefore our readers trust them,” he says. “When an advertiser’s brand is aligned with our papers, consumers are more likely to trust what you’re saying.”
What’s the appeal?
While some brands have shifted their ad spend away from newspapers (Countdown, for example) others maintain its appeal and relevance as an advertising medium.
Westpac is one brand that advertises in newspapers consistently, and drew attention for a campaign last year when it teamed up with FCB and NZME to tackle the issue of gender equality in business leadership roles.
Westpac brand and sponsorship director Graham Wright says Westpac continues to advertise in newspapers as it’s a channel where there is an audience who tend to have longer dwell times where Westpac can communicate targeted and relevant messages.
“Print plays a pivotal role for Westpac New Zealand to still reach and communicate depending on the customer insight and strategy we are delivering to.”
Wright says one pro of newspapers is it’s an established channel. “[And] you can target to quite a granular level the type of content you communicate.”
However he says there are also a few cons. “It can take longer to understand the impact and value, [it] tends to be more expensive to create and deliver content and more difficult to ascertain performance and optimise.”
Despite this, Wright says he’s seen first-hand newspapers deliver strong brand and communication results. “Success has been measured looking at awareness, engagement and sales metrics attributed to a specific piece of newspaper communications.”
Though readership and circulation figures have been dropping for years now, it’s surprising and encouraging to see a slight growth in overall readership in 2017 and circulation relatively stable among the bigger metropolitan titles.
But, with a swift decline in print revenue, will publishers be able to make up for the shortfall? Though our biggest publishers have planted seeds in digital and other ventures, time will only tell if the fruits of their labour prove bountiful.