December’s ABC figures show nothing, but nothing but newspaper sales decline. Only one national title, buoyed by advertising campaign spend, managed a positive growth rate in the last four weeks of 2010.
Here is the headline data in case you haven’t seen it (taken from Press Gazette’s table) but seeing as no one else seems to have calculated this, here are the figures that I think really matter:
– Daily newspapers lost just under 800,000 sales compared to December 2009, an 8.15 percent decline.
– Sunday papers lost almost 690,000 year on year, a 7.15 percent decline.
Yes, you can blame the snow and cold weather and I’m sure that had an effect. But most people did find their way to work and most of them will have passed a newsagents. The industry always seems to have an excuse up its sleeve to explain big sales falls, whether its summer holidays, Easter holidays, Christmas, credit crunch, wrong kind of leaves on the track… you name it.
In newspapers’ never-ending soul-searching, these numbers matter. Professional pride is at stake and arguments about the medium’s existence have to be made….
Ever the optimist, Matt Roper, digital news editor at STV and an experienced newspaperman, said this to me via Twitter:
The answer to that is loads and loads: Mail Online commands 50 million unique users a month, for what it’s worth, and is investing in its US-based commercial and editorial operations to capitalise on an audience it had no idea it would attract three years ago. Its model of celebs, controversy, bikinis and – to be fair to some very good journalists – a full range of home news and sport, is a winner.
But for most, the mass reach, ad-supported model can only go so far. And if the aim is replace revenue lost to pure online classified and display business models, it’s not far enough.
Not over yet…
No one, least of all me, is talking about the “death of print”. Yet. The print optimists, the Murdochs and Newhouses are stalking invisible monsters by taking every opportunity to put right the “death of print” brigade. If I owned a print business today, I’d be doing what they’re doing: running it better, smarter and more efficiently (translation: with fewer staff, less debt and a more fluid structure where staff perform multiple tasks previously reserved for specific, narrow and jealously guarded job roles).
Roy Greenslade puts the daily (national and local) sales at more than 12 million and it would be utterly wrong to discount the power of this medium, culturally or commercially.
The two Mail titles made £80 million from retail advertising in 2009, half of it from supermarket brands, and it may have made in the region of £100 million from the same people in 2010, as TheMediaBriefing contributor Peter Kirwan pointed out. And that’s not all of it: Associated Newspapers made £850 million in 2010, with ad revenue up 7 percent at £374 million. These are Big Numbers.
But Kirwan is on the money here:
Look further ahead, and a bigger challenge looms. Most retail advertising is tactical, price-based, stuff designed to pull shoppers through the doors. When it comes to this kind of advertising, the web hasn’t dealt a death blow to newspapers. Quite the opposite, in fact.
But mobile advertising could be a very different proposition. Geolocation-based offers that appear on shoppers’ handsets as they wander down the High Street, or in advance of a planned shopping trip, won’t spell the end of newsprint. But they will hit newspapers where it hurts.
Innovation needs investment
One of the ironies of newspaper/magazine publishing these days is its innovation is dependent on old media doing well. Whether it’s changing the business model and/or publishing model – something has to happen. But companies can’t afford the costs without cashflow and room to employ people and experiment where it matters.
Simon Waldman (whom I interview here) makes this point very well in his book Creative Disruption. Unless they transform their core revenue model with some intelligent stakes in early stage businesses or better-placed competitors, or organically grow their own digital solutions, how will newspapers make it through the next ten years. Look at those circulation figures at the top of this story and ask yourself: what will those numbers be in 2016?
Failure is an option
Speaking of DMGT, this is a company that arguably has a brighter future than any other UK news(paper) group. Manageable debt (down £187 million in 2010 to £862 million), two profitable national titles, a B2B division over-flowing with growth and 30 percent of all DMGT revenue is digital (see their shareholder-impressing corporate prospectus here, though don’t believe that company doesn’t also have its problems – it does).
The one thing DMGT won’t do any time soon is shut down or cut back on its national newspapers – and it will even keep on giving some resuscitation to its regional newspaper empire, Northcliffe Media. But the thing is: DMGT could afford to scale back in print if it needed to or if it became uneconomic.
There is obviously an emotional attachment to print in Derry Street – Paul Dacre called it “a very sad day for the paper, it’s a very sad day for the Rothermeres” when the London Evening Standard was sold to Alexander Lebedev for less than the price of a vodka in 2009.
But CEO Martin Morgan puts his shareholders first and he’s building a business that can walk away from print if it needs to. How many other businesses could say the same?
Utterly shame-free plug alert
We’ll be talking about the paid vs free news economics question and what you should do about it at Paywall Strategies 2011 on February 24 in London. Hope to see some of you there.
*Newspapers image from Ben Sutherland on flickr, via a Creative Commons licence, some rights reserved.