Print declared dead — and digital is going with it
The Financial Times pronounced the newspaper business deader than a doornail. Its more advanced point was pronouncing the digital news business at the point of death, too.
In the past six years, according to the FT, the print newspaper business in the USA has shrunk by more than half, in the U. K. by one- third— precipitating the announcement last week of the closing after 30 years of the print edition of Fleet Street upstart the Independent. The effort to reinvent the business online— in the mantra of publishing, “digital is the future” — presents an even bleaker picture. Despite the online world’s crowing about advertising growth, and the belief of many publishers that online ad revenue would surely replace offline, the per- view price of a digital ad continues to drop, and ever more ad dollars are concentrated with Google and Facebook. To boot, there are ad blockers: Nobody ever has to see a digital ad.
Paywalls have produced scant revenue, as well as falling readership and a collapsing brand awareness for many newspapers.
What’s more, the effort to compete with native digital news outlets such as BuzzFeed means traditional news organizations must pay more for traffic than can ever hope to be made back from advertisers. In this model, the digital natives can hope to sell to deep- pocket buyers, whereas the traditionals can only go out of business.
The FT cites efforts by Rupert Murdoch’s Sun in Britain, one of the world’s most successful newspapers, to first erect a paywall, then to dismantle it and instead pursue the Daily Mail’s showbiz-heavy digital tabloid approach — except that MailOnline, one of the largest digital news sites, is unprofitable and has fallen short of its own revenue targets.
Though neither consumers nor advertisers will pay enough for news to cover its costs in print form, they won’t cover the costs in digital either. Immediacy and efficiency and searchability and connectedness have not proved to be any more valuable than the slow delivery of yesterday’s news.
Apps, once a promised land, got little traction with advertisers and demanded that publishers transcend their skill and financial limitations and turn into software developers.
Even Twitter seems to be a failed revolution.
The FT concludes there is no viable economic model for a written news product.
Hence, it’s back to the drawing board in search of one.
Some of the solutions seem worse than the crisis as publishers cede their businesses, and relationship to their readers, in new publishing and traffic partnerships with the same platforms — Facebook, Google and Snapchat — that compete with them.
Another approach is to somehow change the nature of what advertising is and who creates the advertising content, to become a new sort of advertising agency. Or to compete with advertising agencies ( another crumbling business). Or to be more like Vice, the digital media video darling that makes a significant part of its money from producing sponsored content. That means not only going into the advertising business but also the video business.
Indeed, almost every news organization has glimpsed its future in video, creating a fall in video ad rates in a glutted market. The most ambitious digital news organizations imagine themselves escaping from Web video into real television.
A curious recent proposal by Ray Chelstowski, a newspaper marketer, suggested the newspaper business should see itself as rather like IBM when it lost its dominance in personal computing, and, likewise, turn itself into a kind of consultancy. It should offer not just advertising but a full range of back office business- support services, such as accounting and health care management. What this might have to do with news gathering, Chelstowski didn’t say.
The FT’s solution was to sell its prestige to Japan’s Nikkei for $ 1.3 billion.
The challenge of the news business returns to what it has always been, the alpha and omega of how to boost circulation and ad revenue. It’s just that now, after so many wrong turns and hapless efforts to find new and easier ways to do it, it’s a lot harder.