Category Archives: newspapers

Investigating the economics of local newspapers

Deutsch: Karte der Verwaltungsgliederung des V...

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There is a grim certainty that the existence of local and regional newspapers are under threat in the UK and other developed economies. There are no shortage of articles from commentators saying this is generally a bad thing. Northcliffe’s East Kent Gazette is the latest in a long line of closures.

But what are the realities of this situation? Are papers really all doomed? What’s the minimum overheads and revenue you’d need to keep a title going, whether online or in print? Are papers better off in large PLC ownership or should they,  as many have argued recently, return to local, independent ownership? Can’t they exist as online-only titles?

I’m putting together an article (possibly a series) for TheMediaBriefing.com that asks all these questions – but I need some evidence and in the spirit of open, networked investigations, I’m asking for your help:

– If anyone has any information, data or figures on how their local newspaper is run as a business, please get in touch. I’m interested in costs and income. Anonymity and discretion are assured – I won’t necessarily mention the title nor the company. (For the time being I’m just looking at the UK situation).

– Views, opinions and ideas on how to make local and regional papers into viable businesses are very welcome. Think about business models – aside from paper ad sales and coverprice, what could business managers do to build genuine, renewable and reliable revenue streams?

I’ve been gathering some figures so far on this and the results are very revealing – some titles are making healthy profits and have small costs, for example. I don’t think the world needs another “isn’t it sad” style blog post from anyone on this – I’m more interested in data, evidence and what might happen next.

Email me on patrick dot smith at briefingmedia.com or call on 07904587050.

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Hats off to Nick Davies

News of the World

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There’s so much coverage of the shutting down of the News of the World, including mine, but I’m not seeing anyone talking about the journalist at the heart of this story – but who comes out with his reputation and morals intact.

Nick Davies has for four years kept this story alive, ignoring every threat and denial from News International, and always trusting his sources and instincts.

News of the World editor told staff yesterday: “The Guardian was out to get us, and they got us,” almost inferring a personal vendetta. But this is business: Davies uncovers wrong-doing for a living. NOTW may have hacked as many as 4,000 phones, including missing schoolchildren and war heroes’ families.

This video chat with him is worth watching. Here’s an excerpt:

 It’s about power and the power elite and the way that the power elite tend to look after each other. I think it’s reasonable to observe that the Murdoch corporation has too much power and its’ evident in the way that the police, the Press Complaints Commission and some politicians automatically backed off and said ‘let’s not cause trouble, they might hurt us’, that they already had too much power when all this was going on on.

It seems to me highly unlikely that it’s in the interests of society as a whole to give that too powerful group yet more power.

I rather think the threat from Murdoch owning more stuff is slightly over-stated but it’s hard to argue with his analysis of the forces that were holding back the reporting of tabloid journalism’s excesses during the last few decades. Much like with MPs’ expenses, the rules or transparency have now been re-written.

Davies is scathing about the Met police, whose fear of “causing trouble with this newspaper empire” saw multiple investigations dropped, despite live evidence. “There are senior officers who must be seriously considering whether they should resign,” he says.

Oh and Davies also casually says that he’s spoken to NOTW hacks (pun intended) who in 2005 asked Glenn Mulcaire to hack the voicemails of David Cameron and George Osbourne. If Davies’s reporting on this so far is any guide, you’d be foolish to question him.

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Newspapers are dying, but don’t turn off the presses yet

Yesterday's news?

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….

Online gains

Ever the optimist, Matt Roper, digital news editor at STV and an experienced newspaperman, said this to me via Twitter:

@psmith how many daily UK readers did they gain online in the same period?less than a minute ago via Twitter for Mac

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.

Merry Christmas from your local paper. Sort of…

It’s always nice to receive Christmas cards. Somewhat less nice to receive automated mailing list Christmas spam from companies you have nothing to do with.

Even worse is when the message is so generic and faceless it makes you laugh into your eggnog until you can laugh no more.

Ping, an email arrives (see right). The subject: “Season’s Greetings from your local newspaper.” “Great,” I thought. It’s a note from Malcolm Starbrook, who runs Archant’s Hackney Gazette and East London Advertiser, the two local papers I read. Or, perhaps, it’s someone from MEN Media (now under Trinity Mirror’s auspices) who publisher the Tameside Advertiser, the paper covering where I grew up and where my parents still live.

But no, it’s from “editor” (non-specific) at a unspecified Johnston Press title, who says:

The editor and staff of your local paper thank you for your custom and support in 2010 and wish you a happy 2011. Johnston Press are the publishers of your local newspaper… We apologise if you have received this email in error.

In fairness, I did live in Leeds for some years – where JP publish a whole bunch of titles – five years ago. I also joined a Yorkshire Evening Post Facebook Group (but didn’t give an email). It’s safe to say JP doesn’t run a paper within many miles of where I live.

And won’t most people receiving this – especially in an area with more than one paper – think who the hell is this from? The man on the street does not know or care who JP is.

Thanks all the same JP. But with database management and email marketing this good, just imagine the task ahead of local publishers as they move towards convincing modern consumers and advertisers to take them seriously.

Merry Christmas!

i Spy: can the Indie’s little brother change the habits of a generation?

The first issue of iIt’s here: i, the Son of The Independent, hit the streets this morning. Touted as the first “quality” newspaper launch in 25 years, it’s a slimmed down version of the Indie designed for busy, younger readers who may have never got the paper-reading habit.

It’s a colourful read with none of the polemic, tub-thumping, liberal campaign-led journalism that loyal readers of the Indie so enjoy. In many ways it fills the gap (in the capital at least) left by the demise of both News International’s thelondonpaper and Associated’s London Lite.

This is a launch issue, but I counted 27 adverts on its 56 pages – a very healthy ratio, including five full-page ads.

Check out Sky News’s report on the launch here:

And here is i and Independent editor-in-chief Simon Kelner on the Today programme (not embeddable, for some reason).

As Evan Davies asked Kelner, is Lebedev working out whether the Indie should become a freesheet too? “He believes in the printed press, he believes that newspapers are a fundamental tool of democracy and he’s one of the very few people investing in newspapers,” he replied.

Behavioural problems

This is a clever strategy: repackaging The Independents content for a showbiz, “how-about-that”, 18-30 audience. It’s clear that no amount of marketing will see the Indie become a favourite of city-based commuters, not with the rising tide of iPhones, smartphones and tablets on the nation’s trains and buses, not with web-browsing at work and copious free, compelling content online.

But as ever, the question is will people pay? It’s “only 20p“, say the publishers, how could anyone not buy this quality newspaper at such a good price? they say (before, adding my least favourite news industry slogan, “it’s much cheaper than a cappuccino!“).

As my former colleague Robert Andrews once put it: people buy coffee because it isn’t available for free across the street. If the choice is between the perfectly readable and utterly free Metro on your 30-minute commute, will you buy a copy of i? Some people would:

@psmith I paid happily. As @garymarshall described it: “Metro for grown-ups”. I’d rather have quality for 20p than tat for nowt. #ipaperless than a minute ago via TweetDeck

But while it’s fantastic to see a national newspaper brand – one that blazed a new trail for quality papers when in launched 1986 – reconfiguring itself for a 2010 audience, I worry this product could fall between the gaping hole between paid and free and I wouldn’t be surprised to see this go head-to-head with the Metro in a free morning commuter battle some time next year. In the words of Chris Anderson, the gap between 0p and 1p is far bigger than the gap between 1p and £1

But the last word goes to the good Prof Greenslade, who surmises:

I would be surprised if it can locate that mysterious young audience that, for a variety of reasons – mainly cultural and technological – have turned their backs on print.

Update: I agree with this analysis from George Brock, now of City University and formerly an exec at The Times:

Is there really a market space between the convenience of free Metro and the younger reader who might pay more for the full version of the Independent? The publishers say that a circulation of 200,000 will do, but is this new seam of potential new buyers even that large?

Smoke and Mirrors: Why the Daily Mirror will not build a paywall

Daily Mirror front page, 2 December 1976
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The headline on Marketing’s website reads: “Daily Mirror’s plans online paywall“. The Twittersphere alights with it-won’t-workisms. The article says:

Executives at parent group Trinity Mirror are finalising which content to charge for on Mirror.co.uk and Sundaymirror.co.uk. Final details of the strategy are expected to be confirmed later this year.

Daily Mirror columnists, including political writer Paul Routledge and sports columnist Oliver Holt, will provide the foundation for the title’s premium content strategy. However, the Daily Mirror’s general news will remain free.

But wait: the headline on Wednesday morning now reads: “Daily Mirror’s plans for online content charges revealed (The old version is handily immortalised on TheMediaBriefing plus still appears in the article’s URL).

Leaving aside the fact that the headline promises the revelation of “plans” but then reveals that said plans are yet to be revealed, this talk of paywalls doesn’t add up. Here’s the problem with stories like this: There is no one-size-fits-all solution; to charge for content is not to erect a paywall.

The Times, Sunday Times and News of the World have genuinely built paywalls: three (mostly) impenetrable barriers to all their content.

The FT and Wall Street Journal have something similar, but offer some content for free: more of a pay-picket fence, or a members’ club with very restricted opening hours for non-members. The wall comes down at certain points, but it’s still a wall. Countless B2B titles and other content producers have different models still.

Editors’ Weblog has it that these plans are being finalised, but I’ve spoken to more than one person at Trinity Mirror and right now, while nothing is ruled out, not much has been finally agreed. But it’s safe to say Trinity is not keen on the idea of all-encompassing walls. In fact, it’s not all about monetising content through a simple fee for news and comment – but about making the most of relationships with readers through games and niche products. NMA’s article spells it out:

The publisher, which has traditionally been opposed to paywalls, said that while it won’t charge for ‘ubiquitous news’ which sites like the BBC provide for free, it is looking into a range of options for growth, including testing the appetite for paid-for content around its sport and entertainment verticals, 3am and Mirror Football.

Group head of digital Paul Hood tells NMA:

As we learn more about our player base, and as they give us more information about themselves, we can use our rich archive of content to hook them deeper into the Mirror Football site and convert them from casual readers to committed fans.

Doesn’t sound very wall-like to me. In fact it’s pretty much what Trinity Mirror CEO Sly Bailey has been saying for some time, such as during this earnings call in March (via paidContent:UK):

There will be some opportunities to charge for specific content but we don’t think a paywall around everything is the right strategy

The digital paid content debate cannot be reduced to a simple binary choice between “paywall” and “no paywall”. TheMediaBriefing’s forthcoming paywall report, written by Peter Kirwan (and available to order with an early bird discount right now), tackles this head-on and concludes that there are in fact six discernible online paid content models, not one.

Given that the Mirror has charged for its print edition for more than a century, executives don’t see charging for other products (note: plural) as particularly different. That doesn’t mean the Mirror can’t also sell advertising against its paid digital products, although convincing advertisers to do so is now a central challenge for the entire industry.

A wall with no Mirror

But what I don’t think will happen is that the Mirror sets up a universal, lock-down walled garden and take itself away from Google and the public stream of recommendations and personal networks.

And it’s also mistake to compare the challenges facing  Trinity Mirror’s three four national titles (Mirror, Sunday Mirror, Daily Record, the People) with News Corp’s predicament: all of News International’s decisions are being driven by owner Rupert Murdoch’s ideological scheme across all of his empire – it’s a war against Google, whom he accuses of leeching from his journalists’ hard work, and the devaluation of content by our copy-and-paste global digital culture.

There is more than one option when it comes to monetising content and relationships. I hope the conversation and coverage around this debate recognises that.

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What newspapers could learn from supermarkets

A Tesco Hypermarket in Prokocim, Poland
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Light blogging of late, with the day-to-day management of TheMediaBriefing.com. So here’s an excerpt of an article I wrote today for TMB about CRM and supermarkets, making the point that news organisations need to know much more about their customers, just like Tesco does…

Sir Terry Leahy turned around Tesco from a failing also-ran supermarket chain with a tainted brand and no hope to a global player. Tesco’s Clubcard played no small part in this. As a fascinating series in FT put it recently (paywalled, of course), the card was a marketing masterstroke: “…it gave it a mass of data to mine about how people shop. It could not only analyse consumer habits but spot gaps in what it offered. As a result, Tesco has come to know more about Britons than they do themselves.”

So when Tesco doesn’t serve the needs of its customers, it changes what it offers. The FT quotes Clive Humby, who devised the system that analyses the Clubcard data:

At Christmas, people wanted to buy ‘posh’ wine; those who usually bought cheap wine went from spending 2.99 a bottle to 5.99 a bottle – but where were the people who should have been trading up from 5.99 to 7.99? They were at Oddbins… because Tesco didn’t have a full enough range?

To stretch analogy out to news, what’s for sale on your shelves? The kind of thing you think consumers are after, or what you know they want to buy? In a print age there is only hope and focus grouping: the call is made by the editor and publisher each day what goes into the paper both editorially and commercially, largely based on flimsy research and an instinctive understanding of a title’s brand.

Read on here….

It’s not about selling news, it’s about keeping customers


The new-look, paid-for Times website

The paywall debate has focused on how consumers might consume the news industry’s end product: news. “Will readers pay for news online?” “Will the industry survive this change?” “Won’t people just get it for free someplace else?”

These are the news industry’s Frequently Asked Questions right now. Even people that don’t believe in Rupert Murd och‘s pile-’em-high subscription strategy – free content activist Guardian News & Media to name one – want to know whether TheTimes.co.uk will be a success.

But paywalls do not sprout overnight, they need real planning. Just look at my old colleague Martin Stabe’s presentation at SIPA on the nuts and bolts of implementing subscriptions at Emap’s Retail Week magazine. So here are some other questions it might be worth asking.
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After the news has gone: life without your local newspaper

(c) Patrick Smith 2010

What happens when your local newspaper leaves town? The people of Ashton-Under-Lyne in Greater Manchester found out 18 months ago when the Tameside Advertiser office (right) shut and its journalists were either sacked or moved seven miles west to Manchester city centre, home of the paper’s parent company MEN Media, now part of Trinity Mirror’s regional empire. Continue reading

Link to the past: why do some news sites STILL not link out in 2010?

Journalists now invariably have to take part in web journalism and an increasing number of them only write for the web.

But despite that, not all of them use hyperlinks - one of the main things that elevate digital journalism above and beyond its print counterpart by adding relevance, context, facts, proof and sometimes wit to an otherwise dry and mundane story or sentence.

I would challenge any non-digital platform to offer readers the amount of information that sites like paidContent (my former employer) crams into its “the story in links” posts, usually collated after the sale of a big company, like this one following Bebo’s recent sale for a pitiful sum.

Linking – sometimes referred to as “in-line linking” – has a fundamental role: it conveys information faster and more efficiently than writing it all out again from the original source. The ethos of sites like paidContent is: why waste time re-writing a press release when you can link to it and add value?

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