Today's news that the Tribune Company may file for bankruptcy and the New York Times is seeking debt financing for operating capital shouldn't come as a shock to anyone. Newspapers have been late to both modernize operations and figure out how to use the Internet effectively. Revenues are shrinking year on year, and their stocks are trading at rock-bottom multiples.
Is the entire local newspaper industry doomed? Probably not. Companies that either can't or won't adapt will fail. What will the winners look like? How will they behave? Here's my blueprint for making newspapers & local advertising work again.
1) Being open-minded re: advertising — the model of printing & placing advertisements in newsprint is dying, if not already dead. For instance, some newspapers are experimenting with a hybrid "print+online" offer. I'm not sure if that is the answer, but newspapers have to think beyond print as their only product offering and they have to get creative.
2) Understand that their place in a local community has changed — Internet technology has reduced the importance of newspapers significantly. Local television stations have created portals of their own to showcase their news offerings, effectively creating a proliferation of competition on the web. Personalized portals have brought upon competition from major tech players. This is the advertising environment available to local businesses. More options and fewer eyeballs everywhere, including the newspapers.
3) Experimentation — Local advertising is a tough nut to crack, but there are a lot of companies (like ours) that are trying different things to attract eyeballs. Effective local advertising will be more responsive and more targeted than ever before. Now embrace it and work with companies that understand how to capture companies on the Internet.
4) Costcutting — Publishing is a tough business, but it is even tougher in the current environment. Newspapers need to learn to get leaner and more efficient. That means investigating all operations for new efficiencies. It probably means getting rid of luxuries and making employees take on additional responsibilities that were once handled by "staff". Hey, I didn't say I wanted to work in the newspaper industry 😉
5) "Semi-user-generated" content — I know the concept of high-quality, unique content is a bit sacred in the news industry, but let's face it. Newspapers haven't cornered the market on it. If I were running a newspaper, I'd look at ways to collect hyperlocal content from all the talented soccer moms and Nascar dads around. It may make more sense for newspapers to become clearinghouses of sorts for good local content, as opposed to clearinghouses + generators of 100% of their content. Just a thought.
In the next few weeks, we'll launch our first hyperlocal advertising product/network. If you're a struggling local newspaper, I'd love to talk with you about how our product(s) fit into an effective strategy for harnessing the power of local advertising and saving your business in the process.
Couple of thoughts, in no special order:
1. Newspapers need to set aside the ink, newsprint, pixels and bits (i.e., the discussion around format), and remember what they’re selling to whom.
a. To subscribers, newspapers’ unique offering is content that is fresh, deep and local. To continue to meet this need, they’ve cut column inches and starved the newsroom of staff, salaries and resources, thereby commoditizing the editorial product, and destroying the paper’s value to advertisers and consumers. And the rise of the Internet and citizen journalists has redefined what “fresh” means.
b. To advertisers, the offering is exclusive access to an entire local market. But, as a result of going to market with an a ever-weakening product for readers, circulation is waning year-over-year, making their product a less compelling ad buy in an ad marketplace that has exploded with niche alternatives. And even without Craigslist and Google AdSense, newspapers’ value to advertisers was declining. That’s because advertisers have moved from a shotgun model to a niche model. Anybody remember the Saturday Evening Post?
A remedy:
1. Content is still king. Distinctive, quality content differentiates a media property. Invest here. Aggressively partner with aggregators who can deliver eyeballs.
2. Phase out print. In a generation, we’ll still want good content, but our kids will spend as much time going to the mailbox to get the paper as photojournalists now spend in the darkroom developing the day’s images. Wanna cut costs? Start here.
3. Rethink advertising. If you can’t compete with free (Craigslist), stop trying. You’ve got a contextually relevant platform by which to connect brands with their audience. Embrace it. Leverage UGC. User content is full of valuable, opt-in audience insights for which local and national advertisers will pay handsomely. You get what you pay for with free, and this is one thing Craigslist cannot deliver.
Great points. I would say that great *niche* content is the key for newspapers/periodicals. RSS feeds, which haven’t even gone mainstream yet, do a great job of passively scanning the world for great content. So instead of relying on one newspaper for unique content, I always get the world of great content at my fingertips every morning.
In that environment, it’s tough to create reader loyalty. It’s easier if your periodical has a specific voice that you can rely upon. Otherwise, run searches against your RSS feeds or Google News to read everything you need on a particular topic.