The digitalisation of the world has posed serious threats to our business and we’re fighting back. But what we are doing might not be enough.
Back in antediluvian 1995, with the first thrust of the World Wide Web, the newspaper business was somehow caught up in the strange idea that ‘information wants to be free’. The business concept was a bit more sophisticated than that, and it went a little like this: if we give our content for free, people will come to our websites and those huge numbers of people visiting us will translate into lots of advertising money.
Actually that was not such a bad idea. After all, advertising money was what fuelled the newspaper industry through its golden years. As Richard J. Tofel tells us in his brilliant book ‘Why Americans Gave Away the Future’: “Advertising was the engine of newspaper profitability, the largest source of newspaper revenue and the key determinant of whether years were good or less good. Circulation revenue was not as important, in many cases only half as large as advertising.”
It made perfect sense to expect the same business model to work online, since there were no real expenses with print and the physical distribution of the newspaper. And for some time it kind of worked. With the help of Tofel we learn that “Wired reported that standard advertising rates in April 1996 were $15 per thousand impressions [occasions when a particular ad is downloaded] between four and 10 times prevailing rates today in constant dollars”.
So what happened here? We were doing fine.
Starting in 2000, the launch of free, easy to use tools to publish online, the growth of faster internet connections and the ease of web searching combined to disrupt what looked like a nice (and comfortable) business choice for traditional news media publishers. More than the proliferation of blog pages, these changes opened the door for a new breed of publishers without the high costs associated with running a traditional newsroom. The distribution side of our business, our unique access to the community, the one that really made the difference for so long, was forever broken.
Now everybody could be a publisher and some very clever entrepreneurs went on to start news media houses. Some of those new businesses are still here today – The Huffington Post comes to mind, as so do Gawker Media, Mashable and others. With these new publishers posting thousands of articles per day, articles written with full understanding of search engine optimisation and online audiences, the revenue from digital advertising fell off the cliff.
As if this were not enough, the digital ‘revolution’ brought with it the loss of some of the most important content our newspapers provided for our readers: consumer services. Craiglist captured the classified ad market and people started using the internet to look for restaurants, cinema schedules and TV programming. Then Groupon took a slice out of the coupon business. End of story.
As with any narrative, we like to think that we’ve learned our lessons from the past. We’re building paywalls, launching applications, no longer giving away our content for free. We’re back on the horse and we’ll make a business of digital. I’m sure we will unless…
The digital disruption of our business is bigger than we might – or like – to think. What we need is not only to rethink the way we do business in digitally distributing our content. We need to reinvent, from the bottom up, how news is produced in the 21st century, for 21st century readers.
For all the business rethinking we’ve learned and made so far, the news we’re producing hasn’t changed that much. As we’re finding out, sadly, most of the kind of news being published doesn’t have a real value for our readers anymore. Now that we’ve lost the keys to the publishing gate, telling people what just happened, a day or a minute ago, will not work as a business model anymore.
Today, breaking news happens on Twitter, and a great deal of coverage is done through social networks. By the time one gets the newspaper, most of the news printed on it has reached its readers through other means. People still go to their trusted brands for confirmation of news, only to get frustrated, much of the time, by the lack of needed contextualisation and depth. There are ‘civilians’ doing communication work (I try to avoid calling it journalism, even if I feel I’m not being very fair in doing so), with new and better digital tools, where in traditional media the ‘almighty article’ still rules.
When everybody is a reporter and publisher, what can make us stand out from the cacophony of digital media? How can we put back the perceived value in what we do?
We need to step up innovation. We need bolder, brighter ideas. We need to redesign our newsrooms, making sure everyone is ready for the new journalism that our readers are eager to pay for. The pace at which technology is evolving will just keep on getting faster and we must be the testers of all new things. We need to embrace the best things digital has to offer to our long tradition of telling non-fiction stories.
If we don’t do it, someone else will. Already we can see new digital businesses producing, publishing and selling long-form, investigative journalism. Companies like Atavist, Auto de Fe and TRVL are stepping into the business of publishing real-value content and selling it. Again, these companies are thriving through innovation, without the high costs of traditional news media companies.
I say they’re all welcome. But let us learn from their examples and fight to raise, even more, the quality of our work in order to be able to compete head to head with these new players. Let’s not repeat the mistakes of the past. In the end, truly valued journalism is worth paying for and we will win this competition and, with it, our readers, readers to come, communities and markets will all be in a better place.
Pedro Monteiro is a consultant for INNOVATION International Media Consulting Group and this article is an excerpt from ‘Innovation in Newspapers 2012 World Report’.
This story was first published in a special Newspaper supplement published with the March issue of The Media magazine.