“Traditional Media Isn’t Dead”
Marcel Fenez, Global Leader for the Entertainment & Media Practice, PricewaterhouseCoopers, Hong Kong
Global newspaper advertising will grow 2.9 percent to 136.8 billion dollars in 2012, with digital advertising accounting for 43 percent of the growth, according to the latest media and entertainment industry forecast from PricewaterhouseCoopers.
Print advertising will grow 1.8 percent to 123.3 billion dollars world-wide in 2012, while digital advertising will grow 19.3 percent to 13.4 billion dollars. While the growth rate for digital advertising will continue its impressive rise over the next five years, the total in 2012 will represent only 10 percent of total print and digital newspaper advertising. “I think we all agree that’s not enough,” says Mr Fenez.
“Some people say that traditional media is dead. Well, it isn’t. For the next five years, it ain’t gonna be,” he says, adding that the popularity of traditional media among people over 50 was helping to sustain it, as was growth in emerging markets. “The death of traditional media is exaggerated, at least in a 5-year context.”
Mr Fenez said the forecasts, based on consumer and industry sources, does not take into account the recent economic meltdown, which could have a negative impact on the figures.
Factors for the future
Eric Wilberg, Senior Management Consultant, Wilberg Management, Norway, and Sören Karlsson, Editor in Chief, HD.se, Sweden
On a scale of one to five, what are the most important factors for ensuring the long-term future of newspapers?
That was the question asked in a study of senior managers and editors in Norway, Sweden, Denmark and Finland that examined 27 criteria for future success.
Here are the top 10 areas for concern for newspapers in the next five years, according to the results:
Marketing and advertising product development.
Editorial product development.
Stable and reliable distribution.
Employee motivation.
Developing employee competences.
Improving integration between different media platforms in your company.
Top customer service.
Focus on profitability in all parts of the organisation.
Rapid implementation of changes.
Developing a good working environment.
“Most of these factors are filling a slow moving pattern. Some changes are taking place,” says Mr Wilberg. However, he believes “we have not been moving fast enough in changing the internal workings of the newspaper.”
From Newspaper to Media Brand
Ulrike Handel, General Manager, Welt Gruppe/Berliner Morgenpost
When the German national daily Die Welt launched Welt Kompakt in 2005, critics said the “light” version of the newspaper would cannibalise the main product.
It didn’t happen. In fact, Die Welt and its compact edition had their highest circulations ever in the second half of 2008.
Compact editions of existing titles are somewhat old news. Ms Handel described a new strategy that expands Die Welt’s brand across all media platforms - print, internet, mobile and television - a strategy that led to profit in 2007 after three years of losses.
The reason is simple: “Internet is gaining ground as primary news source,” says Ms Handel. “Sixty-five percent of internet users access news sites at least once a month, making news the most popular type of websites visited.”
Ms Handel described the changes at Die Welt as a result. Here are a few of them:
Chief Editors of all publications work at a single desk, as do journalists in the same department, no matter what the publication.
The workflow from web to print occurs on one newsroom, where 400 journalists create articles for all channels and media from 5 am to midnight.
There is one brand across all media.
The present and future of free newspapers
Karen Wall, Assistant Managing Director, London Metro, United Kingdom
Is the free newspaper model in danger in the current economic downturn?
“We’re learning to deal with the credit crunch. It’s a new challenge for us,” says Ms Wall, who presented an overview of the experiences of Associated Newspapers and its free sheets in London and Dubai. The next few years will determine the viability of the free newspaper market.
But the experience, up to now, has been overwhelmingly positive, says Ms Wall, who charted the rise-to-profit of the London Metro, the launch of the afternoon London Lite, and the experiences with Dubai’s first free newspaper, 7 Days.
Though she did no release revenue figures, she said Metro has been profitable since 2003. The newspaper, with 1.36 million daily distribution, and three million readers in 16 cities, has undergone a diversification that includes internet sites, product merchandising services, mobile, events, branded publicity, user generated content and databases.
London Lite, launched two-years ago, is a mirror image of Metro - an afternoon daily with editorial content aimed at entertainment and relaxation. And 7 Days is different from the two - home delivered, and awaiting the opening of the Dubai underground next year.
Here are a few of the lessons learned from the London Metro experience:
Quality is important. “If the product doesn’t cut it, readers won’t engage.”
Present a simple brand proposition. “If you can’t describe the product in a lift conversation, you have a problem.”
Targeting the right reader profile is really important - young, wealthy, time-starved urban commuters.
Will Google Dominate Everything?
Christian Ortner, Voralberger Medienhaus, Austria
When the Voralberger Nachrichten, an innovative regional newspaper in Austria, decided to become the “Yahoo!” for local search in their market, they found themselves facing off with Google.
“Today Google has taken over search,” says Mr Ortner. “Down to the small restaurant, Google is serving the local market.”
But, says Mr Ortner, “What happened in search need not happen for local news, services, parties, classifieds, restaurants, videos and other content.”
The Voralberger Nachrichten, chosen Newspaper of the Year in 2006 by the Innovation International Media Consulting Group, believes future growth is online. It is aggressively pursuing on-line opportunities, forecasting that half its revenue will come from its digital platforms by 2011.
Here are some of the areas that the VN is developing:
Creation of 17 Citizen Forums, which connect active citizens at the community level.
“MyVillage” hyperlocal websites, which deliver fresh and useful information to the users about their immediate neighborhoods.
Video, video, video, from a variety of sources - local reporters, news agencies and the users themselves. “What works for YouTube can also be successful locally,” Mr Ortner says.
A “mobile journalist” team covering breaking news, with videos and photos.
A multi-brand strategy that focuses on target groups.
“We believe the online upside is greater than the print downside,” says Mr Ortner. “Video and Community will open a new market for us.”
Five audience-building strategies
Martha Stone, Director, Shaping the Future of the Newspaper, World Association of Newspapers
Ms Stone presented these give “must do” strategies to build audience:
Long Tail. To understand the audience is the real “long tail” strategy because it is central to determining all the products, both core and niche, that readers and users want, and when and how they want it. Newspaper publishers have to focus more on learning about their audiences.
Web 2.0, which means blogs, video, social media, and anything interactive that is available on the web. Online video has an incredible growth - from 92 million users in 2000, through 155.2 million users in 2007, to 183,0 million users predicted in 2011.
News videos rank second in popularity after the number one video site, You Tube. That’s a great opportunity of publishers.
Network. "Build a network, not a destination", says Ms Stone, quoting Rich Gordon of Northwestern University. Newspapers can even partner with competitors. It is a win-win strategy, in terms of marketing, advertising and building reach for their services and products. Newspapers should think about how to build a national network. An example is the Yahoo Newspaper Consortium, which includes 775 newspapers in most of the top markets in the US. This networking brings them huge traffic to their websites.
Printcasting. This is still in the concept phase but has great potential. Newspapers could create as many niche products as they want, which can be distributed in many ways: electronically via email, in pdf format, printed at home, or distributed as an insert to a traditional newspaper. The idea is to build many ultra-niche products.
Mergers and acquisitions. This is another opportunity for newspapers, especially to expand web services and applications, as the global trend in mergers and acquisitions has grown enormously. She pointed to the example of News International, which buys all kinds of niche web products. Again, research is the key -- newspapers must first determine what kind of products and services would be useful to their specific audience.
More on the Shaping the Future of the Newspaper project at www.futureofthenewspaper.com.
