Who are the customers of newspapers?

I came across a tweet today that triggered an interesting series of thoughts.  Who are the customers of newspapers and will online pay walls keep them out or in?  Here is the tweet:

From  @boatload on Twitter “”newspapers, we talk about them being critical for informing the public; we never say they’re critical for informing their customers” #shirky”

Is there a difference between serving the public and serving paying customers from the newspaper’s perspective.  I do believe that a newspaper’s business model depends on serving the needs of it’s advertisers.  Does it serve the advertisers for a typical town/city newspaper to only “inform” their customers?  In print these days, newspapers actually talk about their readership rather than circulation.  Readership assumes that on average x number of people read each newspaper circulated.  So, for a newspapers with a circulation of 100,000, their readership number might be something like 280,000 (or 2.8 readers per paper).   That number is what newspapers promote to their advertisers.  What is more valuable to advertisers:  The 100,000 paid circulation customers or the other 180,000 people that chose to pick up and read someone else s copy?

What about the content created for a typical town newspaper? Is the content targeted to inform a paid audience? Or do editors find content that is relevant to the larger community audience.  Clearly, unless a newspaper is known for niche content only, it creates content for the larger community rather than only their paying customers.  Obviously, the best strategy to grow paying customers is to create a product that appeals the broadest possibly audience.

Now let’s talk about pay walls. To begin with pay walls, will force newspaper back to tracking their audience according to subscription numbers and not readership. Online pay walls don’t lend themselves to sharing content  as one can do with a printed copy of a newspaper. For local newspapers, can a pay walled online web-site generate sufficient value based on broad community based content?  If so, what prevents free online alternatives from within the the community taking advantage of the low cost of online publishing?  Even if the  start-up product was inferior to start, it could easily eat away valuable audience from  a pay walled newspaper site.

This leads to the final question.  Can a pay walled community newspaper ultimately survive?  If so, what conditions would need to be met in the face of a competitor based on free access?

What do you think?

Newspapers: Doom, Gloom, and Inspiration

I read another doom and gloom story for newspapers at the beginning of the day.  Later, I read a second story  that implies a path to redemption for newspapers.  I love when two stories come together to provide inspiration.

Sadly, the blog, Reflections of a Newsosaur, shows that print ad revenues have not re-bounded from the recession as has the ad revenues for Television, radio, and the Internet.  This is troubling new for newspapers and magazines.  For an industry besieged on many fronts, this just another day and another bad news story.  Read the story here:

Reflections of a Newsosaur: Make no mistake: Newspapers are still in trouble — http://mtn.bz/dgbcyH

On the other hand, the second story today  talks  about leadership and learning.  While not specifically related to the newspaper industry, it is very applicable.   Mike Myatt, of n2growth.com states that good CEOs (or publishers) must commit themselves to continuous learning.   He goes on to criticize leaders who are too busy, too important or already  too knowledgeable to commit  themselves to a pattern of continuous learning.

“Put simply, if you’re not learning you have no business leading.” —   The Learning CEO http://bit.ly/d965h4

The business world is becoming very complex and that is particularly true for the newspaper industry.  The newspaper industry is emerging from a 15 years of denial:  Classified revenues will bounce back…  Subscribers are down, but readership is up… that Internet will never last… we are  journalists – not like those bloggers.   The first article speaks to the current reality.  The second article suggest a way forward.  The newspaper will never return to the way things once were.  The time for denials is over,  but, for the publishers and employees who to learn the rules of  the new information reality and adapt to them, the glory days for newspapers can return.

Newspapers can be the voices for their communities and they can remain profitable.   But, newspaper leaders must learn how to run their businesses in a world of bloggers, citizen journalists, connected (elsewhere) communities, and the perception of a lot of  people that newspapers are dying dinosaurs.   Journalists will still create content.  But,  a modern journalist is going to need to reach out to vast new sources of community content,  embrace them, and be the filters of that enormous volume of content for their audience(s).  Know your audience and be part of their conversations.   Deliver the news, information, and commentary that they want as they are talking about it.  Satisfy your audience and advertisers will want to pay to be along side your content.  It’s a big commitment, but that is only part of the equation.

Newspaper audiences are becoming more tech savvy, more connected, and more interconnected.  The notion of a printed newspaper is becoming nostalgic to many.   It is now up to publishers and their staff to learn how to give modern audiences what they need and want.  Audiences want content whenever and wherever they are.  They are looking for content in many places and on many devices.  They are building networks amongst friends, friends of friends, families, co-workers, associates, and even strangers. The newspapers audiences are now content creators and content distributors.  They are no longer passive content consumers.  Newspapers need to learn how to become trusted members of the communities of  their tech savvy audiences.

First thing for publishers to learn is… there is much to learn.

Can an Auction replace Newspaper Classifieds?

I was reading an article from MediaPost, today.  Several U.S. newspapers and Broadcast News sites have come together to create Boocoo.com, an auction and listing site.  Their goal is to take back (or at least stop further losses)  the revenues lost to Craig’s List and eBay.   Read the article for yourself here:

MediaPost: Newspapers Unveil Auction Site, Boocoo.com

My first thought on this is one of confusion.  Newspapers and Broadcast News sites are essentially getting into the Auction business.   They are planning to go outside of their core business to start a new business to compete with a business that does auctions as their primary function.  Huh?  Confused?  Me too, a little.  This can’t end well for the newspapers.  While they are using up valuable resources to create and operate this new business, are they turning their backs on better revenue opportunities?  But let’s come back to that point.

To me, there is an interesting paradox here.  The newspapers are trying to compete with the very companies that devalued their classified business to almost no value.  The real trick with Kujiji and Craig’s Lists (and other sites) is that they exploited the low costs of publishing online and created a better product than the newspapers high cost print classified ads.   The newspapers could have responded in kind and created their own free classifieds (some newspapers actually did) sites, but that would have meant immediately sacrificing millions of dollars in existing print classifieds revenue.  Most, however, didn’t and that has led to a fairly fast and painful decline in print classified revenues.   Conversely, the free online classified site gained a much larger new classified audience of buyers and sellers.  Partly, they gained because of the price (free!), but mostly,  believe they created a better product.  Buying and selling “stuff” is a generally great user experience.  The new classified companies innovated and created a better product and gained a sizable market share in a short period of time.

Now back to the plans of the Newspapers and broadcast news sites to create a new auction business to stem the loss of revenues to companies who do classifieds better.  I have read about their plans to introduce competitive pricing.  I have read that all the participating newspapers have agreed to promote the new site.  This is a very common newspaper strategy for bringing a new product to market.  What I am missing is:

  1. What makes this product better than what is already there?
  2. Where is the innovation?
  3. Why will clients want this new product instead of the products that already exist?
  4. And really, how does this stop, or even slow, the migration of classified ad dollars to the online classified companies.  Those sites  are still providing fundamentally better classifieds product that will still be attracting customers in droves.
  5. And finally, I will ask again.  If newspapers jump into the auction business with sufficient resources to compete with full-time auction businesses, what core opportunities will not get explored as a result?

To be clear, I have set-up and run event style auctions for newspapers in the past .  I understand their value proposition and their potential revenue.    But, I see BooCoo.com as a fundamentally different strategy for more obscure reasons.  As one of the commenters at the end of this story said:

Are you sure the name isn’t Boohoo ?”

I guess I’m not the only one still a little confused by this strategy.  How about  you?

Warning! blatant proud father moment….

My son’s band, Get Back, was featured in the London Free Press.  They are a Beatles tribute band with the youngest member being 12 years old and the oldest 16.  They are amazing… Okay.. I’m probably biased… You tell me.

Compelling content is key in print or online

I read 2 stories  today that I think illustrate an important lesson for newspapers to remember:

  1. Advertising Age: “AOL to Hire ‘Hundreds’ of Journalists, Reorganize Content Division” ( http://mtn.bz/cnrfTY)
  2. Mashable:  Google News and Why Human Editors Still Matter (http://bit.ly/b8sF0S )

In the first case, AOL has discovered that they can monetize content they create and control far better than content from outside their organization.  To that end, they are investing in new people to create content that people will read. With an audience,  AOL believes that advertisers will buy their sites.

“We have insights into our audience, and can produce content they want, which leads to engagement, which leads to what advertisers want,” said Jeff Levick, president of global advertising at AOL.

In the second case, Google has started an experiment to use human editors from select partners to select stories for their readers.  Previously, Google aggressively worked on “magical” algorithms to sort through the tidal wave of content coming from web-sites, media, twitter, blogs, and hundreds of other sources to identify what you, the reader, want.  Dozens of tools exist on the net to help filter the news feeds with varying degrees of success.  To quote the article”

Although social media and other web tools have enabled users to personalize their news streams, the ubiquity of content has created an echo chamber that some readers are trying to parse through to find not only what they want to know, but the news they “need” to know as well. This is where human “editors” and curators play a crucial role in helping readers filter through the noise.

For years, newspaper did a great job playing the role of “filter” in their communities.  As the Internet exploded, this job became more difficult.  With increased content choices,  people moved online to get their news and information and away from newspapers.  With shrinking circulations and ad dollars, newspapers laid off employees (many journalists) to reduce costs and invested in more “canned” nationalized content that is  no longer unique.  As newspapers become irrelevant, the web is looking to fill the primary role that newspapers once filled.

On one hand, newspapers should be investing in unique compelling content that their “community” wants.  On the other hand, they should invest in resources to  filter the content coming from blogs, twitter, and web-sites and package the best and most relevant content for their communities.  (This is probably another blog posting in itself.)  Suffice it to say, if newspapers ever serious want to consider paywalls (another post at some point) or increased advertising CPMs (yet another likely post), they will  only succeed with unique and compelling content.

That’s my thought…What’s yours?

Smartest man in the World has the solution to the problem of Newspapers!

Saul Colt, in his blog today, has done it!  He has the solved the problem of newspapers.  And the answer if 3D!  Hmmm… I’m having a “Hitchhikers Guide to the Galaxy” flashback. Wasn’t the answer  42, and not 3D… anyways…

Saul Colt’s Blog, the “Smartest Man in the World” wrote today in his blog that newspapers need to focus on 3D or 3 Discussions.  His posting is  http://saulcolt.blogspot.com/2010/06/solution-to-problems-of-newspapers-is.html .  The gist of his solution is that newspapers need to focus on balanced reporting.  As long as they are one-sided in their reporting, newspapers ” as a whole will not fulfill the unspoken promise of reporting a story.”  Certainly, most of the newspaper journalists I know are trying to write balanced stories.  However, I expect that many newspapers, tabloids and magazines are, in fact, not interested in the slightest in balanced reporting.  I imagine National Enquirer, Us, or the Globe would be strangely dull and boring, and worse, riddled with the truth.  While they might  “fulfill the unspoken truth”, they would likely lose their core readership or be out of business in no time flat.

As to being  the solution to the problem of Newspapers, it likely wouldn’t slow the slide in circulation, end the bleeding of classified revenues, balance the discrepancy between print and online ad revenues, reverse the trends of lower ROP ad  revenues, won’t make the Internet go away, or get back all of the  journalists who have lost their jobs to industry down-sizing over the past 15 years. But, it is the ideal that they teach in Journalism school, and maybe for those papers that have lost their way, it is a good place to begin. For most newspapers, it is probably a much more complex and varied set of solutions.

Huh? What do you think?

My blog has to begin somewhere….

I have had many reasons to think about the role new media is playing within and around Old Media — particularly newspapers — over the past 10 years. Newspapers were kind of “Social Media 0.5”. Until about 10 years ago, newspapers were pretty much the only voice in the average community.

Now, the cost of publishing has decreased to nearly zero. These days, virtually, anyone can step up to the digital soapbox and start speaking. And, what’s more astounding there a simple, but effective, ways to build an audience for just about any message.

Most newspapers spent quite a few years trying to avoid the impact this social media was having on their business model and their subscribers. In the coming years, newspapers will need to embrace completely new (to them) ways of listening and talking to their audiences.

As many have speculated, some newspaper may die off in the near future. But not all will go away. Some will embrace the new opportunities and will figure out how to adjust their business model accordingly. With growing examples, like the Huffington Post, showing how journalism, UGC, and news aggregation can co-exist and flourish.   Interesting times for the poor old newspapers.

I have an interest in exploring how the best and worst in newspapers make that transition (or don’t).

If you listen to some of the chatter on Twitter these days, one would think that there is no role for newspapers in the future world.   Clearly, classified sites like Kijiji and Craig’s List have taken a big chunk out of newspaper revenues.  Do you believe that citizen journalism will do likewise to traditional journalists?  What is, or should be,  the newspaper game plan (Newspaper 1.0) going forward ? And, what should the future newspaper (Newspaper 2.0) look like ?  Huh?!  Some many questions and so few answers.  This was a good idea for a blog.

What are your thoughts on the subject?  I look forward to our conversation.