THE MEDIA YEARBOOK: Larry Kilman, secretary general of the World Association of Newspapers and News Publishers, looks at the future of newspapers.
Making predictions in the fast-changing media world can easily lead to ridicule. All predictions prior to 2010 failed to take into account the advent of the iPad, which changed everything. Even someone with as much foresight as Bill Gates can get it wrong. In 1997, he famously said, “Newspapers in print will be dead by the year 2000.”
But while forecasts about the future can be dangerous, short-term predictions are less likely to go wrong.
Here are some emerging trends that will likely have an impact in 2015:
Journalism follows the iTunes model. As with music and video on demand, will news content be sold successfully on a piecemeal basis? Two of the world’s most noted newspaper companies – the New York Times and Axel Springer – are betting on it.
The two publishers are investing €3-million in the Dutch news start-up, Blendle, an online platform launched in 2014 that allows readers to browse and read content on a per-article basis. It already has contracts with big newspaper publishers in the Netherlands and Belgium. The investment will be used to expand Blendle’s presence elsewhere.
With newspaper companies looking for new sources of revenue, the Blendle experiment will be watched closely in 2015.
Advertising decline continues. Advertising is the lifeblood of newspaper companies, but a long-term decline in ad revenues, at least in mature markets, is expected to continue, increasing the impetus to seek revenue from new sources. According to Zenith Optimedia, internet advertising is rising at the expense of print: between 2003 and 2013 the internet’s share of global advertising rose by 18%, while newspapers’ share fell 14% and magazines’ share fell 5%. Internet advertising is expected to increase its share of the ad market from 21% in 2013 to 28% in 2016, while newspapers and magazines are expected to shrink at an average of 2% to 3% a year.
Although newspapers and magazines also benefit from the rise in internet advertising, the revenue does not replace that lost to print. Google alone receives 43% of all online advertising. And it is important to remember that, globally, 93% of newspaper company revenue is still derived from print.
The Holy Grail: the search for new revenue. As the traditional newspaper revenue model of circulation sales and advertising revenue continues to erode, the search for new sources of revenue accelerates. Thankfully, paid-for digital news content is growing, having risen 60% from 2012 to 2013.
This is a clear indication of the growing acceptance of paying for credible online content. With all the gossip being offered out there, people are increasingly willing to pay for professionally written and edited news that is independent, entertaining and engaging. In short, this is what newspapers have offered for 400 years, and continue to offer, on emerging and existing platforms.
But ‘new revenue streams’ take a myriad of forms from product sales unrelated to journalism – the Danish daily Politiken has long been the country’s leading seller of bicycle helmets through its loyalty programme for subscribers – to more traditional marketing initiatives that leverage brand strength and unique journalism. There is no single business model to replace advertisements and circulation sales.
The rise of video. Newspapers are becoming more like broadcasters as they develop online video offerings, with a good deal of digital innovation occurring in a medium that was previously outside of newspaper competence. With online display advertising providing disappointing returns, video advertising appears to be newspapers’ best bet for generating online ad revenue.
The latest forecasts from PricewaterhouseCoopers (PwC) show both internet search and video advertising trending significantly upward. But Google has a clear market dominance in internet search, taking more than three-quarters of all search advertising globally. Video is therefore the most promising online medium for generating advertising revenue for those companies that are not Google.
Data journalism. It is geeky and wonky, but it generates deep insights and compelling news stories, and is redefining journalism. Coders, statisticians and database experts to mine and analyse the data all around us, are joining journalists to provide fresh and unexpected views of life in the modern world. Training in data journalism is occurring at a rapid pace.
Lessons from the pure digital players. Non-traditional news sites such as Vine and Quartz have no analogue history and are engaging young readers with new storytelling techniques that provide great inspiration to traditional news media. Citizen-fed news sites like Buzzfeed and the Huffington Post, as well as the search engines, are influencing attitudes toward the aggregation of news. Newspapers rightly object when news stories created by their staff are taken and presented elsewhere without remuneration; yet in the collaborative culture, some are finding value in sharing at least some of their news. Finding a way to monetise this added reach will continue to be the goal of newspaper companies in future.
This post was first published in 2015 The Media Yearbook. A digital version of the full magazine can be downloaded here.
