What’s in store for newsmedia companies in 2010-2012
October 23, 2009 by marek.miller
What to expect from the news industry in the next three years was the focus of the presentation of Lauren Rich Fine, drawing on her experience as a former Merrill Lynch analyst looking at transformational change in the news and financial services industries.
As a research director for Content Next Media, publisher of PaidContent, and author of the recent report “Playing a New Tune: The Music Industry’s D-I-Y Era,” this presentation brought unique perspective on the challenges ahead for newsmedia companies.
Is it possible there is too much news? By looking at media industry in the US, it is mostly funded by advertising. Till some time ago, ad rates were raising faster than inflation. We live in interesting times, where all well known business models have fallen apart.
With the rise of internet, the advertisers have direct competition. Before, they varied between platforms. Advertisers differed between print, tv or radio. In internet the advertising competition is very well seen.
In the US advertising is under the tremendous pressure. US advertising probably will drop 13-15% this year. In 2011 1-2% growth may be noticed in all advertising in US. In terms of media industry in the US, it is expected to drop 7% down next year, and next 5% down in 2011. There is only one reason for these hard situation – classifieds online. The classifieds sum up for 40-45% in newspapers revenue in US press.
In 2008, the profit margin for US newspapers was 13%. If the situation with classifieds does not change, newspapers may even have to operate with no margin at all.
The advertising in american newspaper industry has been really hurt. But it may be also because of the fact that editorial staff did not let the advertising departments be creative. What really needs to change is that news publishers should find effective ad selling people.
The consumer has evolved. He gets his news wherever and whenever he wants it. He enjoys pieces of opinion in his newspaper, so this might be idea of a place where newspapers could make money.
News publishers should not be afraid to fail and try things differently. If everybody chooses the same business model, if everybody has the same opinion, there has to be somebody who is wrong. Experiment. What would be wrong with a local newspaper highlighting from time to time content from a local blogger? If news publishers have to lower the costs and cannot afford the army of journalists, what would be wrong in cooperating with people who write not for money but for passion. If news publishers do not take care of them, the passion may die, and their content will die along. Nothing sells paper better than somebody’s name in it. In comments, articles, opinions.
Market needs to see more cooperation between tv, radio and press, as this consolidates the market.
According to Lauren Rich Fine, there is a space for paid content, but it’s not going to save the industry. There is a lot of valuable content that people are willing to pay for. The scarcity and uniquity of the content makes it premium. It has a role, but it will end up playing a minor role.
People on the other hand will pay for mobile. Mobile gives new possibilities, people don’t have to sit with a paper or by the computer. They can have it anywhere. So it is just the reason why news publisher should consider introducing a pay wall there, maybe not for every content, but there is a place for such paywall.
Hyperlocal is another matter. This type of content can be charged for. Newsmedia companies should not compete on hyperlocal level when they don’t have experience there. People definitely want news to survive, so the role of journalism has not changed.
Newsmedia companies should try more, experiment, try faster, don’t be afraid to fail, have more fun with the content, and with the advertising. It is an industry that’s going to continue. It’s not going to make much money, but it’s going to survive.
Most of the companies that thrive, have the same problem, they thrive because of debts. But at the same time they don’t change their attitude – they still sell the advertisements in a horrible way.
Journalists should also learn how to promote themselves. They can do it by using social networks such as Twitter, Facebook. Lauren Rich Fine believes people do follow others, that have something important to say.
Lauren Rich Fine, Until recently, was the research director for ContentNext Media, publisher of paidContent, where she produced reports on Online News, Mobile Content, Digital Music, and Social Networking, which gives her a unique perspective in her presentation on the challenges ahead for newsmedia companies, United States.
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