The battle for mature readers

Murdoch MacLennan, Managing Director, Associated Newspapers

Newspaper s should appeal to readers across the age spectrum rather than focusing on just winning young readers, says Murdoch MacLennan.

“Newspapers can and do attract younger readers,” says Mr MacLennan, whose company’s flagship title, the Daily Mail, sells more than 2.3 million copies a day.

"But it is becoming ever more difficult to retain them as they get older. All the research in the UK, and in other mature markets, suggests that youth is a peak time for newspaper reading.

“The problem is that the reading habit seems to decline with age.”

The Mail’s strategy of attracting readers - especially women - as they get older has been one of the keys to the paper’s success, he says.

A Local Newspaper with World-Wide Influence

Donald Graham, Chairlan & CEO, Washington Post Company

The Washington Post reaches a greater share of its local market than any other metropolitan newspaper in the United States. Since that market happens to be the American capital, its influence is enormous.

But unlike it’s great rival the New York Times, which has embarked on a national and international distribution strategy, the Washington Post does not distribute the paper far from home.

"We see ourselves as a local newspaper with a national and international reach and reputation" says Mr Graham. "We do not distribute our physical newspaper any further north than New York or any further south than Richmond, Virginia, about 100 miles from our headquarters building."

Yet readership of the paper -- and its influence -- reaches far beyond the distribution area of the paper, thanks to non-traditional news channels.

"Our online washingtonpost.com website has been gaining readers in Washington and around the world at a very rapid pace. Today more than 1.3 million Washingtonians visit washingtonpost.com on a regular basis. Another five million Americans outside the Washington region - and more than a million international readers -- come regularly to our site, for a total online readership of 7.5 million.

"By this measure - to say nothing of the 50 million people in 64 countries whom we reach through the Los Angeles Times - Washington Post News Service -- far more people are reading the journalism of The Washington Post than ever before."

The need to diversify

Fred Arp, Director, Telegraaf Holding, The Netherlands

Faced with declining circulation and legal curbs on cross-media expansion, one newspaper group in The Netherlands has embarked on a strategy of diversification to maintain growth.

“Our core print business is under pressure,” says Fred Arp, a director of Telegraaf Holding.

“The Telegraaf group government has limited growth opportunities in The Netherlands. Diversification is the key in our strategy for growth,” Mr Arp says.

De Telegraaf, which sells more than 770,000 copies a day, is the flagship newspaper of the group, which includes national and regional newspapers, the country’s largest Internet portal, consumer magazines and partnerships with broadcasters.

Telegraaf Holding has invested in content syndication, consumer and media research, digital publishing and cross-media partnerships, events and exhibitions to extend its core products and assets, says Mr Arp.

Only content keeps readers

Hanzade Dogan, CEO, Milliyet, Turkey

Promotions boost circulation in the short term but they don’t bring loyal readers, warns Hanzade Dogan.

She says the Turkish experience in the early 1990s of fighting a circulation war using promotional campaigns left the three major newspapers - including her own - nursing an unmistakable hangover.

They engaged in “encyclopaedia wars” - promoting reference books by the million. But their effect on sales was temporary.

“In the long run, promotions do not bring loyal readers,” Miss Dogan says.

“Promotions do not bring long-term happiness. The only way to increase circulation is through the product - that is the newspaper itself - and through the editorial team,” Miss Dogan says.

She believes that pressure of getting loyal readers should remain on the newsroom.

“Ten per cent of our revenue goes on promoting our content,” she says, citing improving relations between the marketing and the editorial department as essential.

Big Strategies from Small Markets

Tony Whiting, CEO, Border Morning Mail, Australia

The Border Morning Mail is a small regional newspapers in Australia, which Mr Whiting calls "one of the most oversupplied media markets in the world."

He doesn’t have his small patch to himself. The newspaper -- -- winner of the Pacific area’s newspaper of the year award in the 20,000-50,000 sales category -- must compete with two national dailies, four state dailies, five television channels, one satellite service and five radio stations.

"The Border Morning Mail competes successfully with the big boys of the industry," he says. "We are capable of winning in our market because we have the financial strength and the publishing experience to truly invest in business and product development strategies that may have a long-term payback."

Mr Whiting explained the investment and growth strategies that have been successful.

"Like every newspaper publisher world-wide we are endeavouring to balance the cost/product service equation," he says. "However, unlike many other regional newspapers, our major publishing objective is to provide a full cover of daily news, from international, national, business and of course local news -- that is, we aim to have readers buy The Border Mail for their daily hit of news. Everything we do is referenced to this objective."

Winning readers

Christiano Nygaard, executive director, and Marcelo Rech, editor, Zero Hora, Brazil

A Brazilian newspaper has kept it circulation on the increase through an innovative blend of service to readers and a commitment to editorial quality.

Zero Hora, a daily with almost 400,000 sales a day from its headquarters in Porto Alegre, southern Brazil, has seen its circulation rise by 5.2 per cent between 2001 and 2003.

And this is despite economic recession, low readership and overall circulation decline.

The country’s second largest paper, Zero Hora, uses a series of commercial innovations to ensure its climbing sales, including:
  Flexibility of delivery - to your home at the beach for the weekend, for instance;
  Flexibility of product - you can buy the heavy or the “lite” edition;
  Flexibility of subscriptions - have it delivered whichever days you choose; and
  A call centre to ensure customer satisfaction and promote the relationship between the subscriber and the paper.

The 75 staff at the call centre have helped to cut subscriber churn by almost half. They have been empowered to be flexible on price to keep subscriptions.

Raising Prices -- And Raising Circulation Too

Paul Cooke, Managing Director, Independent Star Limited, Ireland

Ireland has four million people -- and 14 daily newspapers. In such a market, it would seem to be suicide to consistently raise cover prices higher than the competition. But that is exactly what the Irish Star has done, and it has managed to consistently raise circulation as well.

"We have arrived at this rather unique position of recording circulation growth despite increasing cover price, and significant price premiums relative to our competitors, by adhering to some basic editorial and marketing principles," says Mr Cooke.

Here are some of those principles:
  "We are not a typical sensationalist tabloid but a news driven, sport focused, entertaining family newspaper. We side with the Irish people, pro-enterprise, pro-youth, pro-personal freedoms, anti-paramilitary, pro-accountability for institutions and government. A complete newspaper."
  "One of the key planks of our editorial policy has been a focus on sport in line with the Irish public’s obsession with all types of sport." On a typical Monday, more than half the newspaper is devoted to sport.
  "In The Star we view broadcast media not as a threat but as an ally as we cannot compete with their level of real time news and hence we use it as a promotional medium. Our journalists are regular contributors on all broadcast media covering news, politics, sports and entertainment."

Battle for online classifieds

Melinda Gipson, Electronic Media Director, Newspaper Association of America

Newspaper companies will have to learn to compete with search engines in the battled for classified advertising revenues, Melinda Gipson says.

Online, search is the killer application, she says. “We think we’ve created a habit forming connection between coffee and the morning paper, but search is even more pervasive. “Search is to the Web what turning on a light is to entering a room,” Miss Gipson says.

The fact that Google has been valued at up to US$24 billion shows how powerful that company’s business model is.

Keyword search led online U.S. advertising growth in 2003, accounting for more than a third of total revenue: US$2.6 billion.

Newspapers have to learn from competitors like Google, Miss Gipson says.

“Let’s learn to serve our local/small advertising customers with our own low-cost, highly automated, keyword-driven solutions, rather than ceding this territory to those competitors.

“Let’s reclaim the small-business market that we’ve lost to free-sheet print competitors and that we’re losing to the Internet search portals,” Miss Gipson says.

Local papers join forces

Alf Hildrum, CEO, A-pressen, Norway

Newspapers should join forces with their rivals if necessary to maintain classified advertising revenues, says Alf Hildrum.

Mr Hildrum’s company has 43 local newspapers, interests in local television and radio, as well as printing plants in Russia.

“Classified ads are vital to us,” he says. “The local newspaper is, in many ways, considered the institution that ties together a local society.”

But the migration online of classified advertising - especially real estate advertising - has served as a warning to A-pressen.

A-pressen has tied up with Orkla Media, a competing regional Norwegian publisher, to create Zett, an Internet-based marketplace.

“In less than one year, Zett has grown from nothing to now being one of the market leaders of classified in the Norwegian market.

This could not have been done without the cooperation of strong local newspapers,” Mr Hildrum says.

Finding the right emerging market partner

Sasa Vucinic, Managing Director, Media Development Loan Fund

There are five golden rules for investing in independent media companies in emerging markets, according to Sasa Vucinic.

Since 1996 the MDLF, a not-for-profit organisation with a venture capital approach, has invested $39 million, of which half went to newspaper companies in emerging markets.

Mr Vucinic spelled out the golden rules. Only invest if:
  You have a medium- or long-term perspective and you can sustain losses for several years;
  Your investors understand that you only put your money into independent media companies with media heroes who want to run a business;
  The people you invest in have a military zeal to get things done;
  You can operate quickly since speed is a crucial element in success;
  You understand the art of modifying and bending general industry rules.

Siberian success story

Yury Purgin, Director General, Altapress, Russia

The first independent newspaper in southern Siberia has blossomed into a major publishing group in the Altai region.

Svobodny Nurs, started by three journalists in 1990, was the first publication in the Altapress group that now boasts glossy magazines, business and entertainment newspapers and a classified advertising paper that lead their markets.

It also runs its own journalism training school.

"Altapress is one of major regional companies in Russia,” says Yury Purgin. “We have nine titles, a distribution network, and employ over 1,000 people.”

The group controls 63 per cent of the printed media market in the region and has an annual revenue of US$10 million.

The main general interest competitor is Altaskaya Pravda, which is sponsored by the government.

“It has a grant from the local budget that is equal to our taxes. So our taxes subsidise our main competitor,” Mr Purgin says.

“No other people can compete with us. We are No. 1 general content newspaper. We have tripled our advertising revenue and we are also a social leader,” Mr Purgin said.

Now the company, which was helped by funding from the Media Development Loan Fund, is looking at expanding into other regions of the Russian Federation.

Independent through profit

Alexej Fulmek, Director General, SME, Slovakia

Newspapers have to be profitable if they wish to resist government interference, says Alexej Fulmek.

Mr Fulmek believes that only profitability saved his newspaper as advertisers blacklisted it, printers refused to print it, and secret service agents attacked its journalists.

SME was set up when 50 journalists in Bratislava walked out of a critical daily, Smena, after the government fired the top management in 1993 for political reasons.

Circulation rose to 50,000 a day in SME’s first years. Nevertheless, the government told state enterprises not to advertise in the paper.

In 1994 SME was able to take over Smena. But then SME’s printer refused to handle the newspaper.

It was then that the Media Development Loan Fund came to SME’s aid by backing the construction of a printing plant.

Eventually, as SME expanded, a German company took a stake in it.

Mr Fulmek says that if you want to publish an independent newspaper you will have to be able to resist the legal, tax political attacks.

“I believe we have chosen the right path,” Mr Fulmek says. “We believe in creating a free environment for the exchange of information, and our goal is to secure conditions for independent journalism.”

Struggle for survival

Jose Rubén Zamora, President and Editor, El Periódico, Guatemala

An independent daily in Guatemala faces closure if it cannot raise US$1 million by June 30.

The cash-strapped El Periódico - which now breaks even - is battling for survival after a campaign of intimidation against the investigative newspaper.

Editor Jose Rubén Zamora blames the country’s leaders, whom he accuses of being league with criminals.

“The powerful are wary of us,” says Mr Zamora, “because we cast light on their corruption.”

As he points out: 80 per cent of all illegal drugs that enter the United States have been stored in Guatemala beforehand.

He said a former president orchestrated a campaign for private advertisers to boycott El Periódico.

The Media Development Loan Fund has previously supported the newspaper in its mission.

Now El Periódico has to resolve a long-term debt of US$1 million to its printer.

Mr Zamora says: “We have had complications, market difficulties and mobs attacking our offices.

“We have dreamed and we will continue to dream.”