Digital threat can actually be harbinger of greener pastures

BY IMPACT Staff

Tomorrow’s newspaper may not look like something that is flung to our front doors or onto our balconies or something that our dog brings to us from our porch; rather, it could look more like the world famous American web newspaper, the Huffington Post.

Learning from the American experience, more and more Indian newspapers will become a mix of part-Print and part-Internet and may be eventually, as has happened to several American newspapers, on Internet only. So the role of the “paper” in a newspaper has already begun to decline and eventually may totally go away. But, as we know, the “news” will remain forever, with pixels taking over the paper in getting news to the consumer. But one thing is for sure, the transition from the printed page to whatever comes next will be fraught with new challenges, both for the newspaper industry and for its consumers. The newspapers, in order to remain vital, will have to mould the changes in technology to work for them rather than against them. This is crucial because otherwise they will become a proverbial “roadkill” on the “information highway”. And if they don’t become the “roadkill”, the newspapers of the future may become more dynamic, timely and topical.

In India, some of the major newspapers have already gone online to provide the latest and most updated news and among them are the Times of India, Hindustan Times, The Hindu, Indian Express and The New Indian Express, to name just a few. Some newspapers even provide an e-paper, the digital replica of the newspaper.

Going online has created more opportunities for these newspapers, such as competing with broadcasters in presenting breaking news in real time. Their credibility and strong brand recognition, and their close relationships with advertisers, assure them their survival. In the US, news reporters for the Print media are being taught “multi-tasking” -- to shoot video and to write short and succinct news stories for the Internet. Some newspapers have attempted to integrate the Internet into every aspect of their operations. In Pakistan and India, for example, reporters are learning how to write stories for both Print and online, and classified advertisements are appearing in both media. Some newspapers are even operating websites that are very different from the printed newspaper.

And during this risky transition, the latest situation report from the USA is very encouraging. According to a recent report by the Newspaper Association of America (NAA), revenue for newspapers in the United States fell only 2% in 2012. However, “The American Newspaper Media Industry Financial Profile of 2012” showed positive signs for newspaper owners. The profile says the industry has found new ways to make money in what was a $38.6 billion industry last year.

“America’s newspaper media are transforming themselves,” said Caroline Little, NAA president and chief executive. The report presents three very interesting conclusions. Firstly it concludes that revenue mix is changing, offering a reason for optimism. Secondly, although advertising revenues fell 6%, other sources of income were growing.

This includes circulation revenue, which rose 5%. And thirdly, new revenue sources such as digital consulting for local business and e-commerce transactions grew by 8%. The report covers US newspaper operations excluding international operations or non-media enterprises. It says last year almost $19 billion of revenue came from Print advertising and $3.4 billion from digital advertising. Another $10.4 billion came from circulation, $3 billion from new revenue sources and $2.9 billion from advertising from direct marketing. According to NAA, Digital revenues - which include circulation, advertising, e-commerce, digital marketing and other sources - made up 11% of total revenue in 2012 for the 13 companies that provided this information for the NAA survey. The 5% overall growth in circulation revenue was the first gain in this category in nine years. The Printonly subscription fell by 14%, but it was more than offset by the gains from Digital only or bundled subscriptions.

The NAA report estimates that “Digital only” revenue grew 275% in 2012. But it is a very small part of the business and made up just 1% of the gross income for the newspaper industry.

NAA also says that American newspapers have been trying to develop creative new ways of augmenting revenues. Some newspapers are now consulting local businesses about ways to take better advantage of the Internet and social media. Revenue in this space almost doubled in 2012. Newspaper companies are also using their existing delivery routes to deliver other products for other companies.

To quote the NAA report “in virtually every community they serve, newspapers have the biggest newsrooms, the best-known brands and significant audience market-share. Now they are building on those to find new ways to serve audiences and local businesses.”

The NAA conclusions have also been confirmed by another recent study done by the US-based Pew Research Center, which says that newspapers “have started to experiment in a big way with a variety of new revenue streams and major organizational changes”. So in India, where the newspaper readership is on the rise because of the rapidly rising literacy rate, the newspaper industry can be optimistic, but only if it learns from others and starts preparing right away. It may not see the Digital onslaught yet, but it must recognize that the train has already left the station.

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