Wednesday, October 14, 2015

Should newspapers abandon digital?

Newspapers are so bad at digital publishing that they should just give up and focus on print. 

That’s the bracing thesis of a recently published mini-book from journalism professor H. Iris Chyi of the University of Texas, who likens what she calls the “inferior quality” of online newspaper offerings to the desiccated ramen noodles that constitute the primary food group for many a starving student. 

Her publication is titled “Trial and Error: U.S. Newspapers’ Digital Struggles Toward Inferiority.” It is available here

Observing that newspapers have been experimenting with “new media” for the better part of two decades, Chyi marshals a raft of research to conclude “the performance of their digital products has fallen short of expectations.” 

She urges publishers to “acknowledge that digital is not your forte” and abandon the “digital first, print last” strategy that has been widely adopted in the business. 

“That is not to say that you don’t need to offer any digital product,” she adds, but “one may conclude that it is easier for newspapers to preserve the print edition than to sell digital products.”

Newspapers certainly have fallen short of expectations in the digital realm. Although interactive newspaper revenues have nearly tripled from $1.3 billion in 2003 (the first year the industry started reporting online ad sales), the over-all digital advertising market has soared by more than sixfold since then. 

But doubling down on print hardly seems to be a foresighted strategy when readers and advertisers increasingly are flocking to the digital media. We’ll get back to this in a moment. First, here’s Chyi’s take on where the industry went wrong: 

“In retrospect, most U.S. newspapers outsourced their homework to business consultants such as Clayton M. Christensen, whose disruptive technology thesis served as the theoretical foundation behind the newspaper industry’s technology-driven approach. The problem is that most assumptions on the all-digital future have no empirical support. As a result, during nearly 20 years of trial and error, bad decisions were made, unwise strategies adopted, audiences misunderstood and product quality deteriorated.”

Pointing to research showing that people who like to read newspaper-y kinds of articles will pay substantial sums to spend quality time with print, Chyi argues that the digital version of the typical newspaper is “outperformed by its print counterpart in terms of usage, preference and paying intent.”  

And she is right. Any publisher will tell you that print is more profitable than pixels. 

The problem with ditching digital, however, is that the number of readers and advertisers who value print has been steadily shrinking – and likely will continue to do so, owing to these seemingly irreversible market phenomena:

:: Tumbling print circulation. The print circulation of the nation’s newspapers has dropped by nearly half in the last 10 years, according to this analysis. While continuous changes in the way publishers report their circulation have made year-to-year comparisons increasingly difficult, most anecdotal evidence suggests that print circulation is continuing to erode.   

:: Dramatically aging readership. The New York Times recently reported that the median age of its readers is 60 vs. 37 for the U.S. population, making its audience 1.6 times older than the population as a whole. The average life expectancy of a 60-year old man is 21 years, while 70- and 80-year-old gents statistically have respective lifespans of 14 and 8 years, according to the Social Security Administration. Even though some readers will live longer than the predicted average, the superannuated readership of newspapers suggests that significant numbers of loyal readers will begin dying off in the next 10 to 15 years. (Women will be glad to know they get an extra couple of years, but not enough to reverse the trend.) Most publishers will tell you that the median readership of their newspapers is as senior as that of the Times, if not older.    

:: Steadily contracting ad sales. Fully two-thirds of the print advertising at the nation’s newspapers has dried up since hitting a record high of $47.4 billion in 2005. Most of the publicly held publishers reported sales declines in the first half of this year, suggesting that revenues are on track to slide for the tenth straight year in 2015 – unless an unforeseen miracle occurs.  

:: Declining economies of scale. Unlike websites that can serve one page or 100,000 pages at little incremental cost after they go live, print publishers must sustain substantial manufacturing and distribution investments in order to print a single paper. If circulation falls another 50% or print advertising slides another 67% in the next 10 years, will there be sufficient print subscribers and advertisers keep the business viable? This is the existential question facing the industry.  

As poor as the industry has been at finding its footing in the digital age, it’s hard to imagine how newspaper companies can survive over the long term if they put their primary focus on print. 

© 2015 Editor & Publisher


Blogger Mike Phillips said...

Well, her critique of newspapers' digital operations is right on -- with a discouragingly few exceptions. That also applies to most magazines and speciality publishing houses. I sit on the board of one of the latter and am pulling out my thinning hair. It's hard to understand how so many otherwise bright print people can be so dim-witted about the rich opportunities of digital story-telling.

But then, I remind myself that print folks -- particularly newspaper print folks -- are a tribe. And any anthropologist will tell you that tribal societies around the world are backward-looking in all their cultural norms.

I would agree with her recommendation, as well -- if it weren't for the communities I once served as a print editor and all the other communities making up a great nation that Jefferson couldn't imagine succeeding without a vigorous free press.

Legacy news organizations should blow themselves up and start all over again as pure digital plays. The print cost structures if nothing else require that. And if they lack the cojones to do it to themselves, them a new generation of upstart journalists will have to do it to them.

My only regret is that I have reached the stage of life classified by some as "old toot." I'd love to be part of that demolition crew.

10:33 AM  
Blogger Paul Steinle said...

The debate over newspapers' futures continues: It's hard to find a "transformational newspaper" that places its emphasis "on print." The most professional ones are placing their emphasis on reporting and then publishing on multiple platforms: websites, smart phones, tablets and print. The dirty secret is that digital ads don't produce much of a revenue stream, especially if yours is a middle-sized or small community newspaper. So the barriers to success are more structural (using digital platforms) than enterprise oriented. And, the jury is still out on the effectiveness of digital advertising for traditional mass market products. So, the energy of this furious inquiry into the fate and possible survival of "transformational newspapers" is: What digital revenue stream - IF ANY - can fund their reporting. And, in the interim, print still pays the bills.

11:43 AM  
Blogger mnd said...

The biggest sin is the unified newsroom, this, usually, means bring print oriented editors, who does not fully understand the web, working with the web.
A successful unified newsroom is where you bring in new young editors that understand the web and write for it, the same article can then be enriched for the print edition, so a unified newsroom but really with specialized people. A good title on the web is really different than a good title in the print edition (the audience, as any research will point out, is really different).
Another sin is trying to apply the same print revenue practices to the web (that's means, primarily, traditional advertising) but in the web you have more freedom, you can setup contest (through sponsorships), you can sell more easily other contents from partners, you can engage readers in producing contents that can later be used also for print.

12:59 AM  
Blogger Unknown said...

Nobody gets promoted for skillfully managing decline. The digital evangelicals can sing to their choir. Not only are newspaper digital websites lousy, they speed advertising defections by posting unique content for free before paying print customers get their papers. Digital is stuck at 12 percent or less of revenue at papers. That's for more than a decade.
Chyi is right. At least one person out there is brave enough to say the Emperor has no clothes.

1:29 AM  
Blogger T. D. said...

Part of the problem for print is the vast expansion of news access. Moderate to poor reporting used to make the cut because there was no way to compare what was written with other viewpoints on the story/facts. Today too often one learns important story details or insights in the comments section or by doing an internet search on the subject rather than in the article itself.

There are some reporters who do a good job and fill in the blanks (like Nigel Jaquiss) but way too many seem to be writing off of organizational or governmental press releases.

If you have good content, serious people will suffer through the format to get to it.

9:48 PM  

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