Hear yea, hear yea! Newspapers in Trouble in the Internet Age! Oh, the Irony!


It’s official: newspapers are in trouble.  The writing has been on the wall (if not in print) for a number of years, but the nails are finally being driven into the coffin of the newspaper industry.  Why, exactly?  One can point to a number of factors, including an aging readership (i.e., not the juicy 18 to 35-year-old demographic pursued by advertisers).  The fact that younger generations do not tend to buy newspapers is not so much a reflection of their disinterest in the events happening in their communities and around the world, as it is an indication of their technological literacy and environmental sensitivity.  The fact is many people are turning to other forms of media for their news, especially the internet.

My question to the newspaper industry is this: why do they not OWN the online news space?  The answer is simple, if not entirely obvious: they failed to embrace the new on-line medium on its own terms, clinging instead to an ill-fated approach whereby they would more-or-less replicate on line what they were doing in print for hundreds of years, and expect readers and advertisers to pay up as always.  Big mistake.  We can’t be too hard on newspapers, though.  They’re not the only media companies feeling the pinch these days.  Today’s announcement of 800 layoffs at the CBC are proof of that.  As for pure on-line companies, there are plenty of big players delivering lots of content on the worldwide web, but precious few of them who are profitable.  Still, the fundamentals are there for newspapers to take command and control of the on-line news media space in the 21st century, and in doing so, reap financial rewards unimaginable by any media business to-date. 

The answer to the question, why are newspapers best positioned to own the on-line news space, comes down to the evolution of news media and (for our purposes) the three basic factors of any particular news medium’s practicality:

  1. Accessibility –  Are there issues around accessing the medium (time, location, up-front/ongoing costs, etc.)?  How widespread is access among the population?  
  2. Literacy – Does the medium require literacy skills (i.e. reading, writing, computer)?
  3. Interactivity – Does the medium deliver value via the old Chinese adage: “Tell me and I may forget, show me and I may remember, involve me and I will understand”?

The following chart explores the evolution of the major types of news media, and tries to identify which traditional forms of media “best fit” with the new interactive reality of today. 

This chart shows the evolution of news media and highlights the similarities between newspapers and the internet.
This chart shows the evolution of news media and highlights the similarities between newspapers and the internet.

There is a clear match between newspapers and the internet, more-so than radio or television.  But if there are synergies to be exploited between newspapers and the internet, why are so many newspapers closing their doors?  The answer is not so much a question of business model, as it is a question of revenue model. 

In 1997 I began working with a client by the name of Planet Today, Inc. (and its U.S. subsidiary, Planet America).  They were in the business of creating “Smart Communities” via on-line technology (which was still pretty much in its infancy at the time).  IBM would later become Planet’s technology developer and strategic partner, and Planet launched 80 “Local Area Webs” (LAWs) across Canada and the U.S.  I remember preparing Planet’s pitch to form strategic partnerships with newspapers, local and national, complete with a revenue model that dramatically increased their upside potential by harnessing the synergies of on-line technologies and the tried-and-true bricks and mortar presence of the newspaper.  Rather than relying on traditional advertising revenues, working with Planet, a newspaper could start getting a piece of the business transactions taking place within the communities their papers serviced.  Both my client and I were blown away by the negative response we received.  Rather than seeing our overtures as a potential step into a whole new world of possibility, I think the newspaper barons saw it as an attack of some kind.  Who were we to lecture them about how to adapt their business to the Internet age?   

Twelve years later, I find myself reading about The Rocky Mountain News stopping its presses and newspaper chains in trouble.  Local communities throughout North America are in danger of losing their papers.  Perhaps it’s high-time for publishers to finally start thinking beyond the margins of the newsprint revenue model (advertising).  Instead, they should approach their business fresh with the new on-line reality in mind: harness their established position within communities in support of a platform that generates transactional revenues for them.  In fact, they could always consider the strategic partnership plan I developed for my client, Planet Today, who is still around, after all these years.  One thing is certain: in the evolution of news media, the trying economic times of today are threatening certain “species”.  Newspapers have a simple reality to face: adapt and prosper or go extinct.  

For the positive, some might say essential, services they provide to communities everywhere, I would hope they choose the former.

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