The newspaper industry is, like many historic industries, going through a major change as its tries to remain relevant. Most people could come up with a narrative of why newspapers are a declining industry. Newspapers are, as the arguments would go, delivered each day in print, with yesterday’s news to a smaller and smaller population of readers in a world where the Internet is king.
Supporters of the printed newspaper increasingly appear nostalgic for a time when the world was different considering how ereaders have exploded in the past several months.
While the end is near hypothesis is easily understood, at a recent CMA event leaders of the newspaper industry in Ottawa were largely of the view that newspaper industry in Canada is healthy and not faced with the same doom and gloom as evident in the United States. While publishers are burdened by the debt they took on to purchase over-valued newspaper properties the actual papers are successful.
In fact, on some measures, such as the growth of the number of local papers, it seems that one could argue that there has been expansion rather than contraction. And, this may be one of the most important developments for a number of reasons that I will return to.
But what is a newspaper? The reality is that a newspaper has always been about two things.
- It is a channel for advertisers.
- It is an aggregator of what it is happening in the world.
Newspapers have effectively been part of the historical, implicit, contract between advertisers and the public which means that advertisers support content in return for access in the way of ads to the public. Subscription fees for newspapers are important to publishers but clearly do not pay the full-freight for the cost of producing the news.
Given the contract, the decline in the newspaper industry can be thought of in terms of both elements of the business; a change in the value of the channel as a mode for advertisers or a change in the value of the paper as an aggregator.
We need to rethink the role of newspapers as an aggregator of news content in a multi-channel universe. The best option for newspapers is to become hyper-local.
Radio and television fractured the print audience for news but both of these media have their own limitations – particularly the relative time available for content. The Internet, especially coupled with the proliferation of smart phones and now tablet devices, further fractured the market and put newspapers in an awkward position.
The newspapers have responded with an online presence but even this strategy is fraught with challenges. First, it has proven difficult to generate significant ad revenue or convince readers to pay to access online content. Second, a person can get most national and international news from multiple sites (either online aggregators, specific outlets, or social networking sites). Without unique content to offer both readers and advertisers, the value of a newspaper (in print or online) is marginal.
Local provides the source of unique content that can differentiate. It may, in many cases offer potential for new types of advertisers who aim to capture a local market. The proliferation of local newspapers is really reflecting this new reality since they have focused the news stories on what is happening at very small geographic levels.
It begs a number of questions? How do you learn about things in your community? How much of the newspaper that you read (print or online) is local versus national or international in scope?