Outlook 2010: last moments of danger, and opportunity
October 25, 2009 by marek.miller
The opportunity for newsmedia companies today is to accelerate cultural change before the economic rebound begins. This rebound is only months away, so the clock is ticking. In this closing presentation of INMA/OPA Outlook 2010 conference, Earl J. Wilkinson, Executive Director and Chief Executive Officer of INMA, talked about the health of the newspaper post-recession, emerging business models, the fast-evolving value of content in various media platforms, and how newsmedia companies must prepare for the post-2011 revolutions ahead.All newsmedia companies face economic downturn nowadays. There is a lot of hysteria with journalists writing about other journalists, creating a vicious circle. Mos debt-ridden newspapers are concentrated in the US and in the UK, therefore the most common question asked today is whether what is happening in the US/UK media industry the tip of iceberg? It depends on the country, and many characteristics of its market. Earl J. Wilkinson does not believe in the death of newspapers.
What was unique to US/UK economy were:
- debt
- broadband
- advertising
- profitability
- public perceptions
On the other hand things like capital budgets, strange international cultures, vertical organisations and collapse of classifieds are the features that are wider and not unique only in case of those two economics.
Today’s newspaper is not universally dying. It depends on the buisness model circumstances, environments. The newsmedia publishers are asking themselves questions like:
- How to change what we do to match our audiences across platforms with the new needs of advertisers?
- How to determine the value of content and price of content?
- How to prepare for the real revolutions ahead?
It’s going to be all about advertising. There is too much emphasis nowadys put on what is happening with print circulation: the issue is advertising and business models. Print advertising in the US is down 45% since 2005. The growing role of alternative interactive channels (27% in 2012) are expected, whereas traditional marketing will account to 42% and traditional advertising to 32% in advertising budgets.
There are 5 questions for the upcoming year 2010 that need to be asked:
- What are consumers willing to pay for?
- How to integrate from newsroom to board room while still expecting USPs of each medium?
- How to leverage the synergies of multi-media to generate incremental revenue?
- How to position the idea of newspapers as a hybrid medium?
- What are we marketing? A cross platform, a brand? or do we drive interaction on specific platforms?
There are features of the printed medium, that give hope it’s never going to disappear totally. Those are deep engagement, deep loyalty and passion, canvass of emotion, and tangible influencer of society.
Earl J. Wilkinson used a very interesting metaphore. While in the age of classical mass media (which is behind us) such as press, tv, zines, radio, outdoor we could say we talked to the forest. Now, in the age of micromedia, we are talking to the leaves, and wat makes it even more complicated for – those leaves are talking each other. Newspapers are now trying to adapt to this age of micromedia. And how to evolve from audiences of geography (international, national, regional, local, hyperlocal) to audiences of niches? What is the best medium to reach these audiences? How should the tools to engage with microaudiences be acquired? These are few of many challenges newsmedia companies have to face in this new age for them.
Media must become more and more audience focused, audience obsessed. Multimedia solutions must be provided to reach new audiences. The audience has to be high-quality, engaged, and loyal between different platforms. Then, next step will be to build audiences into communities.
The future is blurred for those newsmedia companies that don’t integrate print and online sales. And the reasons for it are as follows:
- advertisers and agencies are re-organizing for cross-media conversations
- to enable advertisers to optimize their performance across channels
- having only one person visit the same client
- more customer contacts
- integrated cross media products make more money
- package selling at key accounts
- cutting expenses
This will not be easy, but such integration is necessary. In the US, in one of the major companies, 50% of online sales representatives quitted their jobs when were forced to sell print. It’s because of the internal sales culture in many companies – print representatives often don’t know online and online representatives don’t know print. It is necessary though, because integration of print and online ad sales makes sales process more efficient, and impactful.
Except for advertisers, according to the speaker, there are also consumers who will be paying for content. Not whole content though. Consumers are willing to pay but will not absorb the whole cost of journalism for newsmedia companies. More should be prepared for audiences that will pay, and less for those who don’t pay. When talking about it, Earl Wilkinson used the following example. He asked the listeners, who, from the conference, would pay for news that would say about a small house in China burning down. Then, on the other hand, who wouldn’t pay for a service that would provide a text message informing their house is on fire. This is just an example, but narrative journalism will be at core of what path newsmedia companies will take. It may not necessarily be the key to audience development though.
Today, the true value of content is in the decline. One of the reasons for it are long conversations among newsmedia executives and experts about how to get readers to pay for digital content. Not all content is of equal value. And not all platforms experience the same in those terms. The key is to understand how readers perceive the content on different platforms (context). This is what newsmedia companies must learn and understand in the future.
Earl Wilkinson said, what can be expected in the nearest 3 months. That is:
- How big pay wall will Rupert Murdoch erect and what business model will that be.
- New York Times will make a decision whether to erect a pay wall or go for memberships model
- The Guardian will show its form of membership club.
- Finally important thing will be clear: is it about building audiences or protecting print in the US?
Next two years will be about cleaning inefficiencies by newsmedia companies. Recession and crisis makes actually the changes for companies easier. Unprofittable newspapers on certain days of the week will be cut. Second-tier newspapers will die, and so will under-performing ones. Many synergies will be noticeable on the market – fewer people will be covering same stories. And also new ideas of improving economic performance of those companies will be seen, such as outsourcing, offshoring or centralising the operations. Those will be the most important changes in media landscape in the next 15 months:
- Web 3.0: Semantic web will anticipate users needs
- Semi structured data: primary product over narrative storytelling
- Open source: technology changes so quickly that proprietary systems will not be able to keep pace with the rate of change
- Mobile: rapid advancements in mobile technology, wireless networks, user interfaces
- Journalism explanation and memory: intelligent ways of curating old information could play a big role
Among changes beyond 2011, this is what should be expected:
- Information scalability – new tools for information architecture, findability structures
- Machine readability – from “writing for humans” to “writing for machines” (Semantic Web)
- Information products – selling datasets for GPS coordinates from every news story
- Mashups – combining data from two or more sources into single integrated application
- Predictive intelligence. Telling both sides of the story will be passe. New will be finding the signal in the noise of information.
In 2010 uneven recovery across advertising categories will be seen. By 2015 probably 100% of population will be wired with access to broadband, 100% of population will be using smartphones – this picture does not leave much space for print. There will be no pending “death of newspapers” but by 2020 clear trend will be seen with internet disruption. Noone will know the best business model to follow but most newsmedia companies will be filling the passionate niches. Different content will have different commercial value across different platforms, publishers should prepare for that.
Earl Wilkinson concluded his presentation with such summary of the years ahead. 2008 is all about why newsmedia has to change. 2009 will show what changes to newsmedia will look like. 2010 actually will show what newsmedia really need to look like. Less than 12 months of danger (and opportunity) remain!
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