Sunday, August 23, 2009...10:40 am

Why newspapers (and TV) are struggling in the internet age

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The news that Gap has scrapped TV ads for social media should come as no surprise. And it’s bad news for those who think that the media’s focus should be on getting readers to pay for online content.

The internet makes it easy for anyone to become a publisher of traditional-style media content at virtually no cost, which puts more pressure on media owners.

But it also makes it easy for brands to bypass traditional content vehicles altogether, and interact directly with consumers.

In the Gap’s case, this does mean still using existing channels – cinema, print and outdoor ads – to drive consumers to a Facebook page. But that ad spend will be shrinking. And even if brands still need to reach consumers via advertising – whether online or offline – that advertising won’t necessarily be going to newspapers or newspaper web sites.

Instead, brands can place ads into games, social media sites and Twitter streams, and reach their target audience through a whole range of niche interest web sites (some of which they might set up themselves).

And don’t forget the increasing importance of live events in this. The effect of digital reproduction of music on the music industry has been to reduce the importance of the music track and increase the importance of the live relationship between music act and audience.

This effect will also play out in newspapers and magazines. People will stop seeing printed magazines as being as culturally important as they have been. Instead, I predict, they will respond better to brands that interact with them in the real world.

So look for brands doing more live sponsorship and field marketing activity at the expense of plain old visual advertising.

A lot of the debate about whether or not newspapers will survive hinges on getting readers to pay for content – whether online or off.

But actually, single copy purchases and subscriptions have never been the core of newspaper revenues – that honour goes to advertising. And it’s the fact that advertisers are deserting newspapers in droves that has pushed the industry on to its knees.

Unless we can find a way to key advertisers paying for newspapers (and magazines, and television), there’s really no escape from the decline of printed news media. And it means that the traditional, resource-hungry newspaper web site is also in trouble.

10 Comments

  • This isn’t entirely true.

    When I was a young journalist, the Fleet Street tabloids carried next to no advertising. For example, all the ads in the Daily Mirror might have amounted to less than two tabloid pages in a paper or more than 40 pages.

    In those days papers probably did depend on copy sales for their income.

    But, in relative terms I think they were considerably more expensive than today (I’ve been out of the UK for 20-odd years so I could be wrong here). And circulations were much higher – The Sun used to sell over 4 million copies every day.

  • Bill raises a very interesting point. Much of the current debate assumes that the only model that works for any media is the one in which advertising subsidises production costs. But some titles have traditionally survived on the strength on volume sold and the income generated by cover price. This won’t work in every case, but another way of responding to the current changes in the industry could be to look at how changes in production and delivery costs affect the viability of running a publication which generates funds mainly through cover price. This involves having a greater confidence in the quality of what we produce, rather than seeing it simply as the stuff that goes in between the adverts.

  • I’d be interested to know which titles – and how expensive they are.

    There’s an interesting parallel with the world of US comic books, which I haven’t yet got around to posting on.

    In brief, they used to be full of ads and be printed on cheap and nasty paper and sell hundreds of thousands of copies – to a wide audience. Now they have no ads worth speaking about, are printed on much higher quality paper and sell only a fraction of what they did – perhaps to collectors, certainly to a more specialist, older and wealthier audience.

    It begs the question of whether any new, viable print channel would qualify as “mass media”…

  • One example from personal experience is Take a Break – not the darling of the mediaratti but a very successful mag which sold over 2 million copies a week in its heyday, and still sells around 1 million. Cheap and nasty paper, yes; but also a strong editorial character, a deep affinity with its target market and a capacity for reinvention which built a vibrant readership community long before we started talking about community solely as a online phenonemon.
    Other mass-market women’s magazines also rely quite heavily on cover price, but it’s a part of the market overlooked by commentators who rarely see past newspapers and top-selling glossies. Another interesting point is that these mags are still relatively well-resourced in terms of staff – although I’m sure the bean counters are working on that!
    You could also look at the TV listings titles, which still sell large volumes despite the fact that the info is available free in print form (newspaper listing mags) or on screen. That raises some interesting points about buying habits – people choose to pay for something they can get for free.

  • TV listings is an interesting example of how a usable format – day-at-a-glance TV listings – is worth up to £1 or so of someone’s money each week.

    Crucially, the web is very bad at this, as are the electronic listings you get on Sky+ or Freeview. Daily papers are also less convenient (in that they only offer a day at a time and not early enough to plan your viewing or recording). So the main competition is between Saturday newspaper supplements and the specialist listings mags.

    Very interesting about the mass market women’s sector though. I must find out more about this. I was under the impression that this sector was having problems with readership (aging readers, sales dropping etc).

    Anyone with any insight, please feel free to chip in…

  • There are problems with the women’s market, no one’s immune, but it does provide a different picture. I’ve always thought TV listings mags are a great example of why print is, in some circumstances, a far more useable and reader-friendly format than online.
    Although my biggest problem at the moment is working out why, despite being logged in, my name doesn’t link to my blog – martincloake.wordpress.com if you’ll forgive the blatant plug.

  • Interesting point about Take a Break… with which I once had a strong connection. Martin is absolutely correct, in that it built its success on an almost eerie understanding of its readers and a highly-targeted, utterly unique product for their consumption (oft-copied since, but never equalled. Sorry ‘Chat’).

    BUT notice that even the invincible TaB has had to watch its circulation fall steeply over the last decade (now 920,060, down from 1.2 million only four years ago). There are some UK national newspapers who’ve not lost as much as 25% of their circulation in the last four years.

    I don’t know what the lesson of this is. I’m not sure anyone does. But I do know that magazines aren’t immune from the internet, however folks try to convince themselves otherwise.

  • Soilman – I wonder if our paths crossed! Magazines certainly aren’t immune from the internet, but readership doesn’t just fall because of tinterweb. In the days of Nova, the early Marie Claire and even the traditional homely IPC women’s weeklies before Bauer came and shook things up magazines sold in greater numbers than people now could dream of. One reason titles don’t sell as many copies as they used to is that there are more titles. TaB’s readership fall reflects the market. Interestingly it still sells twice what Heat did when it was regarded as a publishing pnenomenon.
    Publishing has some issues, but it’s lazy to just point at the internet and ascribe every problem to it. The picture is, as always, more complex.

  • Yes – the advent of DTP and lower barriers to entry did hit magazines as there was a glut of supply. The same thing happened in the world of US comics, which I draw on for a recent post.

  • The Economist does have advertising. But the edition circulating here (New Zealand) only has around 10 percent advertising. On the other hand, the cover price is high at NZ$11 – that’s extremely high considering the relatively low number of pages.

    At a guess I’d say the Economist itself makes 80 percent or more of its revenue from copy sales. Then there are the spin offs like conferences, research etc.

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