(Subscriber Report) The Future of Newspapers and New Business Models for Growth - By Jack Myers

The intensive debate about the future of newspapers and print media is focused almost exclusively on news reporting and journalism My focus is on commerce and the primary importance of establishing local newspaper sites first and foremost as the primary source for their communities39 commerce needs and interests The ongoing debates often miss the key point that consumers once relied on newspapers as their exclusive source for information on everything local for sale to find houses cars jobs restaurants events entertainment products and services As much as business concerns and issues may appear to be at the forefront in the corner offices at most major newspaper companies it is the editorial product that management perceives as the core deliverable to consumers Ads are the quotfillquot packaged to fit into and around the editorial content But it should not be lost on the newspaper industry that those papers that continue to do well amp8211 pennysavers and local weeklies amp8211 design their content with advertising at the forefront and editorial content packaged around it The debate today should revolve around the shifting relationship between editorial and advertising amp8211 and where the industry39s priorities should beIn today39s full report available to subscribers I share my recommendations for rebuilding the newspaper business and why I believe many newspaper and magazine publishers should be replaced in their jobs I share an innovative new model for incorporating advertising into Kindle content and smart phone applications I suggest that universities develop a new business curriculum focused on newspaper and media management and argue for refocusing the fundamental discussions taking place in the corporate offices of leading newspaper and magazine publishers I also include a new recommendation for generating 100 million in incremental subscription revenues for The Wall Street JournalIf newspapers reengineer their business models as I outline in this week39s report they will have an opportunity to regain their economic footing enabling them to once again invest in journalism that is unfettered by economic concerns In the long run foundations are also likely to step up to underwrite journalistic enterprise National news and investigative units will be underwritten by multiple newspaper organizations Once local newspaper sites reestablish themselves as the primary source for their communities39 commerce needs and interests their news reporting and journalistic components will once again be allowed to thriveYou are receiving this email as a corporate subscriber to Jack Myers Media Business Report Redistribution in any form except among approved individuals within your company is prohibitedJob 1 for the newspaper community should be to reach out to universities and underwrite the creation of new graduate and undergraduate level course that explore business models and organizational structures that assure the continued viability of the newspaper and media business and to assure not only that jobs will continue to be available for graduates but that graduates will continue to be interested in newspaper jobsThroughout the second half of the 20th century universities became important centers for journalism education Syracuse University39s Newhouse School Columbia University Ball State Maryland UNC Indiana Northwestern UCBerkeley UNC Missouri University of Florida and many other universities built expansive departments to advance journalistic learning all with a curriculum that was pretty much exclusively dedicated to editorial and production The business of media remained for most universities an afterthought relegated to a course or two Advertising curricula also focused on the creative processes ethics and role of advertising in American life with little if any emphasis on business models returnoninvestment metrics or organizational roles This reality remains the case with few university programs today addressing the destructive forces that are at large in the media worldOne of the most critical of these destructive forces is the deterioration of subscription revenue models which is being addressed by myriad proposed solutions such as the Journalism Online venture formed by L Gordon Crovetz and Steven Brill Alternative revenue models being explored and debated include different systems of metering micropayments subscriptions etc Paywalls in my opinion can only work if the content is exclusive compelling and truly valuable I believe the Wall Street Journal would find it easier to make 100 million selling 100 1 million quotBloomberglikequot corporate subscriptions to Wall Street firms for special content and investigative insights than they would selling 667000 150 subscriptions For the average local newspaper paywalls will be counterproductive in the long term causing further deterioration of their local brand and relevance Unless a media company has content that customers truly value as differentiated and economically worthwhile they will seek it elsewhere for free The Washington Post could reasonably extract thousands if not hundreds of thousands of dollars each from Washington lobbyists and power brokers as well as corporations and foreign governments if they provided true insider insights and knowledge as their core subscriber business It is unlikely that The New York Times has an endemic constituency that offers it a comparable opportunity and it is questionable if The Grey Lady can sustain a viable payperread modelAs content distributed across multiple platforms becomes the norm all media companies must focus on understanding consumer needs and economic value points The Amazon Kindle has become my favorite medium for accessing print content I actually pay for Kindle subscriptions to The Huffington Post PaidContent ValleyWag and other blogs that are free online I also subscribe to The New York Times having cancelled my home delivery of the print version I believe there is a compatible opportunity to include advertising in Kindle versions of magazines and newspapers that would be acceptable to both Amazon and publishers This applies to all eReaders In my Kindle download of The New Yorker magazine for example cartoons are packaged together in a separate dedicated section and indexed by cartoonist Why not create a separate dedicated quotAdvertisingquot section as part of the Times and The New Yorker downloads and provide an index by advertiser category ie Fashion Automotive Cosmetics Entertainment etc Only select display advertisers who purchase ads of a certain size would be includedAfter all newspaper advertising is valuable content to many many readers and to exclude this content is contradictory to the fundamental value newspapers and magazines have always offered their readers If newspaper and magazine publishers do not believe this and most recent decisions suggest they do not and if they do not become vocal advocates for incorporating full display advertising in new and creative ways into online eReader and smart phone apps they shouldn39t be in their jobs As technology permits advertisers will be encouraged to add coupons especially when they can be directly scanned at check out counters incentives special offers unique creativity and other components that will attract consumers The total advertising business model amp8211 including the agency business will be elevated when advertising becomes optional and requires proactive consumer involvement I39m willing to wager that advertising could become one of the most popular content sections of the online mobile and eReader versions of many newspapers and targeted magazines Publishers must inherently believe this and build their business models and organizational structures accordingly If they do not I believe they should be replaced by executives who doIf advertising cannot support a free online distribution model then in the long term I39m convinced the economics of most local newspapers just won39t work Consumers are becoming progressively more sophisticated in seeking and finding free resources that meet their information needs Traditional news content has become overly commoditized and when editorial content is put it behind a paywall online competitors will emerge and offer comparable content for free Home and newsstand distribution will eventually be almost totally disintermediated by online mobile and ereader availability and trying to impose traditional home and newsstand payforcontent economics to a techenabled society is just not a sustainable modelIf a local paper invests in highly valuable journalistic capabilities and believes it is appropriate to limit access to that content then they will need to offer true differentiation and generate sufficient subscription revenues to be profitable without dependence on advertising I39m also willing to bet readers would pay more online for access to daily comic strips and quotDear Abbyquot advice than they would for local news sports entertainment and other information After all think back to when you were a kid and you picked up the daily paper If you39re like me you opened it from the back and read the comics first sports or Dear AnnDear Abby next and then progressed forward to the front page That39s why the auto ads were in the back of the paper Department store and supermarket ads were stand alone destinations and coupon dropins remain the most widely read section of Sunday papers Yet comics coupons and advertising are an afterthought at best in online mobile and eReader newspaper versionsI believe it is completely appropriate for newspapers to assure that editorial environments are advertiser friendly Advertising and commerce empowers and underwrites the very existence and survival of editorial content A recalibration of the business based on that hierarchical reality is fundamental to the industry39s survival The real key for newspapers is to monetize their brand by rebuilding relationships with local businesses through technologybased enhanced commerce offerings I39m an advisor to Live Technology which has developed an automated solution for local newspapers that enables them to provide consumers with easy online access to all local retail and commercial resources and offers simple online access and tools for advertisers to create and place their messages across all local media channels simply and costeffectively through the newspaper39s commerce website Live Technology39s service enables local papers to become the central hub for retailers39 total local advertising needs and rebuilds newspapers39 consumer value by enabling them to recapture dominance in local classified advertising A few newspaper groups are currently exploring this model with Live TechnologyAll newspapers that have a loyal core audience and a strong and relevant brand identity still have the opportunity to regain market influence dominance and a valid longterm business model The solution is not to generate pennies nickels and dimes from readers it is to serve consumers and advertisers by developing and implementing creative new advertising and organizational models Once local newspaper sites reestablish themselves as the primary source for their communities39 commerce needs and interests their news reporting and journalistic leadership will once again be allowed to thrive

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(Subscriber Report) The Future of Newspapers and New Business Models for Growth - By Jack Myers

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