Newspapers and the difficult paradigm change

I was not surprised to read this story online today (note, I read this excerpt online):

James Murdoch says apps cannibalize newspapers

MONACO (Reuters) – Sales of newspaper apps for devices like the Apple iPad are cannibalizing sales of physical newspapers, James Murdoch, head of News Corp’s operations in Europe and Asia, said on Friday.

News Corp in June closed its free Times of London website. The Times, the Sunday Times and Britain’s best-selling Sunday tabloid the News of the World — also owned by News Corp — are now available online only to paying subscribers. News Corp’s British newspaper arm News International said this month the titles had lost up to 90 percent of their online readership and now had 105,000 paying customers, including those who had bought the iPad and Amazon Kindle apps.

The exercise is being closely watched by the newspaper industry, which has lost readers and advertising revenues to free alternative news sources online and is seeking new business models for the digital age.

Here’s what I’ve observed when I was working in the local newspaper industry.

  • Editors/journalists are not businessmen.
  • Ad sales people are not journalists.
  • Corporate development people are not media-savvy.
  • And many of them have their own conflicting ideas of how to be successful online, based on how success was defined in the past

With the mix of the above types of people, it’s not surprising that in the entire Southeast-Asian region, there’s not one newspaper or traditional media outlet that has successfully created an online business model that can comfortably replace its current operations. It’s rare to have the right mix of people who can bring the business forward into the digital space.

(At the same time, you’ll have a few media professors here and there who keep writing theses on what old media should do to become new media, but they were probably never very good journos or business-minded people themselves. Still, they get quoted aplenty by old media to reaffirm the latter’s beliefs and status quo.)

I write this blog entry not because I know the solution (gosh, if I did, I’d quit my job right now). FYI, I’m no longer focused on journalism and PR, and have moved to a more business-oriented job role, but I’m still a media junkie and I know newspapers are the gold standard in journalistic standards that the online world desperately needs.

I want better content online and I want better access to it. And here’s why I think the newspapers and other print media are not getting it right.

I believe there are viable business models, just that the old media often refuses to entertain them because of their mindsets, assumptions and habits.

Thankfully, one thing continues to hold true from papyrus scrolls to today – Content is king, and I’ll add that Talent is queen.

FILL THE MIND, NOT PAGES

Most readers never suspect that the number of news stories they read in the newspaper, is often a direct result of the number of ads that are placed by advertisers. Not the other way around.

This is what we call ad pagination in the industry – the more ads that come in, the more pages must be printed. And because pages cannot be all completely filled with ads (it’ll be a catalogue then and readers will revolt), space must be made in certain ratios for news and feature stories. There’s a specific amount of space set aside for top stories, Gahmen stories, features, crime stories and so on, but more filler stories are needed if pagination shoots up.

That’s why editors and journos sweat every week over the Friday or Saturday papers – that’s when they have to find loads of stories to fill the pages. And in sedate Singapore, there aren’t that many scandalous stories out in the open, yet we have one of the thickest newspapers in the region!

Interns come in especially handy here.

And you’d realize by now that a lot of filler stories are foreign wire stories, which are already available free online, but perhaps repackaged and re-edited for a local context. That’s why I rarely read the world news pages in any local newspaper these days. I’ve already read it on my phone or PC the day before.

Another net effect is that the more pages are printed, the more people that are needed in the newsroom. There are natural limits on what each media employee can do and newsrooms struggle to improve the efficiency of each headcount to drive down costs. In the past decade, newsrooms around the world have tried to get many reporters to do both photography and writing (platypus concept). But I’ve gone through it, and I can tell you multitasking is not feasible when you need to go hunt for quality stories or shoot award-winning photos. Newsrooms still trying to pursue this concept have not learnt anything.

In the online world, space for stories and ads is infinite. In the same banner space, a dozen or several dozen ads can appear in the same space thousands of times within the same hour. You simply don’t need the same number of people to write, edit, layout, proof-print, and deliver the same 100 stories + 400 ads to a digital audience.

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Take for example Flipboard on the iPad (above), which automatically lays out online stories and blog posts according to an algorithm. Images, headlines, and text are quickly pulled in from Twitter and other sources and re-laid out no matter how you hold the iPad.

Sure, it’s predictable after a while, but this sort of pagination technology will get better over time, and it proves that you won’t need a whole room full of layout people in the future. After all, everyone knows there are only so many ways you can lay out a page, it’s just how you can get it automated.

When traditional newsroom processes are fully automated, there is little choice but to fully focus on the content.

SCALABILITY ON A MASSIVE SCALE

The scalability that is needed for a media outlet here, is thus not dependent on the number of pages or broadcast minutes or number of people you can hire, but the sheer size of the audience it can actually capture.

In Singapore, if you can get 500,000 readers, that’s truly impressive for a newspaper. And to continue serving these 500k readers, you need a sizable newsroom, printing operations, ad sales team, news vendor network and so on.

But if you look at Singapore and any other developed country, a newspaper or magazine often struggles to grow that readership once it has matured. Then the editorial folks start worrying and wonder:

  • How can we continue getting the same amount of ad dollars if we move online?
  • Can we migrate the 500k readers to the online space and expect them to pay the same price they now do for a print edition?
  • How can we maintain the same number and quality of stories that we do today?

Well, I keep hearing the same questions being asked over the past decade because people just cannot accept the loss of the scale of manpower operations that will happen. Or perhaps everyone assumes that a crime news team needs X number of people, and cannot possibly exist if there’s nobody to cover all the small crime stories (eg. lift robberies, petty office thefts etc) that currently are really nothing more than page fillers. Seriously, I don’t need to read yet another story of how some employee forged invoices to go on a shopping spree.

The obvious step to take is to stop thinking about how to maintain the state of today’s newsroom operations and advertising practices, but how to increase readership exponentially.

Not by a mere 10% or 30%, but by multiples of 5, 10, or more. You have 500k readers today? How about 5 million unique readers in 5 years? I’ll explain this in a while.

At this point, proponents of “news must be hyper-local to be relevant” will come forth and say that the small SG market cannot possibly support such an approach. Then, I’m sorry, you will be condemned to serving the same 500k people forever, assuming they don’t look elsewhere for content (and they will).

I like reading hyper-local stories, and they provide the local character of any publication. However, here’s the situation – do you really expect people to pay to read hyper-local stories in the online space? Why should I bother to pay to read what the Environment Minister has to say about flooding woes in Singapore? Or an interview with a local celebrity?

The question that needs to be asked here is “WHAT stories are people willing to pay for to read online?”. And “WHO is willing to pay?” To assume that all content must be free online is self-defeating. IMO, journalism and writing standards need to stop pandering to the lowest denominator if a premium is to be paid.

We don’t need the entire contents of today’s newspaper edition to be transplanted online – kill the fillers, filter out the gold, and you suddenly realize a lot of writers in the newsroom need to rethink what they’ve been writing all this while. Or look at another career.

THE TIME AND TECH IS RIGHT

Now I’ve been saying the above for nearly 5 years now, but I believe this is really the time when the publishing market is ready to go forward in big leaps, thanks to the new tablets and smartphones that are incredible in the way they allow one to consume media anywhere and anytime. I can’t believe we used to put up with clunky slow “smartphones” that didn’t have touchscreens and took ages to load any webpage.

Even more critical, is the fact that there has been standardization in the mobile platforms like iOS and Android (and of course, Windows Phone 7 which powers my current phone), where people can expect to have similar online experiences on generous data plans. One friend complained that everyone’s using the same phone models these days, but the net benefit is that everyone can access the same apps with minimal fuss.

So why should a newspaper seek to increase its readership tenfold? Simple – because whether it decides to go for a advertising-based revenue (eg. most SPH papers), or circulation-based revenue, surviving the current online landscape demands a huge audience that many editors have never dared to dream about before.

If a newspaper can get 5 million customers paying a mere $0.50 a month to read all its content and archives, that’s $2.5m in revenue a month. Who is offering a newspaper subscription of 50cts a month today? Nobody.

Because newspapers prefer to drive away 90% of customers if they can keep the 10% who are willing to pay a few bucks more. Understand that you’re not competing with 40 or 50 other newspapers…you’re competing with the idea of FREE CONTENT with millions of content creators online. That’s why people are buying 99ct songs in droves, it’s sure a better deal than buying a $20 CD or risk getting caught downloading on Bittorrent.

Often I hear a lot of BS about how many million hits a website gets a month – I’m not interested in those figures. I’m interested in just sheer unique visitors, and how they stick to a website’s content. Everything else is probably marketing fluff.

To explain online scalability, just look at Facebook’s ability to scale just by leveraging on other people’s comments, links and photographs  – for the past few years, I’ve actively run our Xbox ad campaigns on Facebook because its ability to mine demographics are unparalleled. Today, most big companies still aren’t advertising on Facebook even though it’s become the BIGGEST display ad network in the world with over 500m users.

Honestly, it’s faintly ridiculous the number of impressions and click-thrus any advertiser can achieve with just USD1000 on Facebook. Any individual today, even a non-corporate blogger, can begin advertising his services on FB at minimal cost, and reach any combination of global audiences with just his FB account and his credit card. There’s no media agency to go through, no ad agency to chase for proofs. Just create a small thumbnail visual in Photoshop Elements, and let’s go.

Many marketers make excuses NOT to advertise or engage with customers on Facebook, because they think old media with its “traditional” ad rates are still the best way to reach the audience. Or maybe they just fear the unknown.

Well, I love print ads and I do look at them daily, but Facebook content and ads appear more frequently to me throughout the day than a full-page print ad that I glance at briefly before it ends up being thrown away the next day. The same applies to many other people across the world.

I’m basically hinting that 3rd party advertisements for a newspaper may not even need to reside in the newspaper’s website itself, but perhaps be embedded in the paper’s FB fan page, or even drive FB traffic back to the news website. Print companies keep assuming that the ads need to be contained within the newspaper’s website itself, but that’s because they treat a webpage like a printed page with traditional ad pagination.

TALENT MATTERS MORE THAN EVER

Call me a cynical, bitter guy, but all current and former journalists are cynical and bitter anyway. I roll my eyes whenever any company says it truly believes in hiring the best talent. You and I know that’s hard to achieve, because great talent is really hard to hire, and it’s all about the headcount budget. If you only set aside a peanut budget, you will end up with monkeys.

More than ever, digital companies need to hire the absolute best talent they can find. Not just in being able to create the best editorial content, but also in creating the best technological tools/platforms/apps that can keep pace with consumer consumption habits.

Media has always been a mix of content + delivery, and it’s sad when many publications refuse to hire the right IT people or agencies to create an optimal publishing interface.

Wired.com has a great mix of both, and it shows in the quality and ease of use in their webpage.

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But today it’s not enough just to have a great looking website with great layout and stories.

Back to Facebook for a while. Now, how many newspapers have a dedicated Facebook fanpage that they take time and effort to cultivate and use it to engage closely with audiences?

Perhaps in a few years, Facebook will be overtaken by another social media site, but right now in 2010, it’s not happening anytime soon.

I spent a good year building up our Xbox Singapore fan page and learnt many important lessons along the way until I passed on the baton to my colleagues recently.

The most important thing is that it takes experienced professionals to manage a Facebook community. You can’t just get any agency or intern to run it for you for a fee – FB requires you to go direct with the audience, deal with emotions, legal issues and so on. And this person has to truly believe in what they say online and be able to facilitate conversations, not just start them. It’s a really tiring role to take up, but an immensely satisfying one when you see the community respond in kind.

I’m also fortunate that my journalism training has taught me how to deal with the worst readers and my media law training has enabled me to spot legal or PR issues right away before they blow up in your face on a FB thread.

If any publication wants to be serious about leveraging on social media to push its content, it needs to hire the right people with the passion and experience to build whole new audiences online. Not just be content with plonking stories on a page and hoping the audience will come on their own accord. No, you need to pull them in, and not using mere branding ads, but letting your employees have the ability to go communicate directly and professionally with your old and new customers.

CONTENT THAT LOVES THE AUDIENCE, NOT JUST THE OTHER WAY AROUND

Now I can understand why many companies feel they don’t need to reach a global audience, because they can’t possibly ship their physical products everywhere. That’s logical.

But for a newspaper, there are no physical goods and the world is your oyster – if your content is great (and I don’t mean the latest transcript of the Prime Minister’s rally speech), your writing is engaging, and your news triggers an intellectual discourse – there are millions of people who would like to be your reader.

They just don’t know you exist, because you haven’t reached out to them. Perhaps you know that today, more than ever, people hunger and hunt for content, because they’re on a subway train flipping through their phone screens, in front of a TV browsing their tablet or uberlight notebook, and they’re perhaps just a bit tired of playing Angry Birds.

Now why do I read Time magazine and its website, even though it is filled with plenty of US news and commentaries that don’t affect me directly? Because it’s written to engage, to excite and to let me learn things I know may not affect me today, but could do so tomorrow.

Because I love it when their writers respect their readers and treat them as intellectual equals, writing to them like a friend and loving how they craft their own words for simplicity and impact. That’s great journalism, and it reaches across the world to readers who can appreciate the content.

If every newspaper or magazine could think like, and aspire to be like Time, then there’s a definitely market for them. Editors and marketers spend too much time worrying about whether there’s a substantial online market. There is, but it’s how you commit to meeting their consumption needs, rather than you figuring out how to just create content, that truly matters.

My personal philosophy is this – if I don’t care and love my reader with the content that I create, then I don’t deserve to have any readers. Don’t get me wrong, I know many journalists love their newsmakers and their readers, it’s just that in print form, the love doesn’t go very far out of the country.

SO HOW TO BE SUCCESSFUL ONLINE?

Every publication faces its own personal challenges and each will have to find its own viable business model. Some consultants will probably charge you big money just to tell you the common sense things I’ve listed out here, but hey, knowledge is free.

Constant failures in the online space occur, not just because the business model wasn’t right, but also because publications did not find the right people and mindsets to drive the business forward. Or perhaps they did not invest enough in the right technologies and platforms that could scale accordingly.

The worst thing you could do is to try to create your own publishing platform and try to control all the profits. Scalability demands that you leverage on the popular platforms out there, and truly understand which devices are going to be used by your target market.

Today, so many tablets are being launched into the market, but only one or two will survive the orgy. ‘Nuff said.

Amazon has also proven that it may not be just about hardware, but having multiple apps across different platforms to drive the same premium content (seriously, I’ve spent more money on Kindle books this year than the past ten years with paperbacks).

Amazon’s strength is really in distribution of content as well as customer relationship management, and print media need to remember that if they want to scale.

If newspapers want to survive the digital transition, they have to stop being locked into the printed page in the way they think and operate.

One Reply to “Newspapers and the difficult paradigm change”

  1. Oh! How I love this piece of writing…

    You are really speaking the minds of so many of us that had left the line…

    “That’s why editors and journos sweat every week over the Friday or Saturday papers – that’s when they have to find loads of stories to fill the pages. And in sedate Singapore, there aren’t that many scandalous stories out in the open, yet we have one of the thickest newspapers in the region!”

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