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Nieman Journalism Lab
Pushing to the future of journalism — A project of the Nieman Foundation at Harvard

Newspapers must grow their online news market share. Can they?

news-laptopMy proclamation the other day that “print is still king” got considerable flak from folks who disagreed with assumptions I made in the analysis, as well as from those who apparently didn’t read the qualifier in the headline: “Only 3 percent of newspaper reading happens online.”  That’s newspaper reading, not news reading.

In other words, that analysis, limited to the world of newspaper content in print and online, shows that as newspaper readers migrate from print to online sourcing of news, most of them are moving beyond  the limited realm of newspaper web sites.  This was duly pointed out by some of the commenters, and as a next step in considering the problems that newspapers face, it’s worth exploring what the scope of that problem is and what the newspaper industry must do about it.

First, the scope of the problem: To what extent have Americans shifted their news consumption to the Web, and what share of that attention is on newspaper web sites?  Let me avoid the risk of stepping into another controversy over statistics and point to a couple of data sources.  Here’s the data. Visit the links. I’ll draw my conclusions, and you can draw yours:

Print newspaper readership continues to decline, as indicated by the downward spiral in paid circulation.  Year-over-year ABC-audited newspaper circulation fell 4.6 percent weekdays, 4.8 percent Sundays for the six-month audit period  ending last September 30.  The next batch of ABC data is due shortly for the period ending March 31, and will likely show a continuation of a 30-year downward trend.  USA Today alone is expected to show a drop of 100,000 copies or more than 4 percent.

More and more Americans get their news online.  In December the Pew Research Center for People and the Press reported that for the first time, more people got “most of their news about national and international issues from the internet” than from printed newspapers, by a ratio of 40 percent to 35 percent.  Here’s the graph from that report:

post1

That doesn’t say anything about local news, but it certainly indicates in what direction things are moving.  Around the same time, Gallup reached similar results showing the same migration away from local newspapers:

post2

and toward news on the net:

post3

Newspaper sites are far from dominant deliverers of online news.  The 40 percent (or more, by now) of people who get most of their news online direct only a fraction of their attention to newspaper sites.  In the Pew Center for Excellence in Journalism’s recently issued annual report called “The State of the News Media,” the top 10 news sites ranked by unique visitors include just three news organizations (New York Times, Gannett and Tribune), two of which are there only by using are multi-site corporate counts.   For 2008, those three newspaper organizations could claim only 22 percent of the total unique visitors among the top 10.  Just how small a fraction of the news audience attention newspaper sites hold is debatable (and was debated at length in my prior post’s comments), but it’s probably much less than half, and probably in the ballpark of  one-fourth.*

In other words, the basic problem that newspaper companies face is that they are losing their print audience slowly but surely to news sources on the Web, and they are not gaining a share of the online audience that’s commensurate with their historical share of analog media.

Secondly, what can the newspaper industry do about this problem?

There are solutions, and the time to act is now.  But to begin with (and the thinking of Stephen Brill notwithstanding) newspapers are in no position to charge for content, with the possible exception of high-value niche content in limited circumstances.  The last thing an industry hard hit by disruption should be doing is raising prices, whether from zero to something, or from something to something more.  What they should be doing is this:

Newspapers must become digital enterprises, even if they choose to continue to print on some days or on every day of the week.  The corporate culture of newspapers is still very much that of an “industry” with its bricks and mortar, iron and steel, trucks, vans and smokestacks.  The daily work flow of most newspaper employees is organized around the central event of the daily press deadline.  That culture is hard to change, even in the few newspaper firms where top leadership understands the need for reinvention as a digital enterprise.  And it’s hard to do this, because there’s no blueprint and the few industry pioneers who are leading the way don’t necessarily know exactly what they’re doing.  It’s very much a “fire, ready, aim” process.  But here are a few components I believe are essential if any newspapers are to survive:

  • Blow up the organization:  Check out what they’re doing at the Cedar Rapids Gazette: break up the enterprise, and the newsroom itself, into a series of interacting functional units that each operates in startup mode, with collaboration replacing control and with focus on connecting people, not technologies.  (As part of this, it’s worth thinking about physical organization as well — what a Finnish daily discovered about architectural barriers to full collaboration illustrates the importance of good newsroom architecture.)
  • Figure out social networking:  Take the leap into Web 2.0  I’ve written about this regularly (Nieman links:  “Building networks around news”   “Social networks: “News organizations ignore them at their peril” and “A café-shaped conversation“).  Start by appointing a Chief Social Networking officer.  Connect actively with readers where they network now: Facebook, Twitter, MySpace.  Start community social network sites not just around geography but around interest areas — there’s room for more social silos.
  • Rethink the entire content flow:  Get away from the focus on a daily cycle of story production, and create a content cascade system, in which content washes naturally (and efficiently) through a malleable structure of blogs, comments, Tweets, conversations, wikis, stories, niche uses and more.
  • Outsource the irrelevant: To operate nimbly in the digital world, you can’t be distracted by the business of printing, packaging and distributing.  A daily print edition, or one published once or twice a week, may well continue to be a valid part of your business model. But all you really need is a small production group that can create that edition — the rest can be outsourced.  (Or perhaps it’s in-sourced to an independently managed commercial printing and distribution unit, as in Cedar Rapids.  The point is, eliminate that distraction from the real business of digital publishing.)

Photo by swingnut, used under Creative Commons license.

_________

*The statistically inclined can find top-50 numbers to tinker with, including time-spent data, here.  While newspapers have a somewhat higher share of top-50 uniques, the average time spent on site for newspapers is lower than that for non-newspaper news sites.

                                   
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  • http://toughloveforxerox.blogspot MichaelJ

    Exactly!

  • BuffaloRick

    Nice ideas and all, but you still don’t demonstrate how newspapers will make money! A minor point.

  • http://newsafternewspapers.blogspot.com/ Martin Langeveld

    @BuffaloRick: The whole point of gaining online news market share is to grow revenue. I’ve discussed in previous posts that there can be a return to reasonable (but not monopolistic) profitability essentially by shrinking the business to an online-first operation with fewer print editions (one or two in metro markets is what I would expect). This sheds a lot of expense while keeping a large percentage of the remaining print ad business.

  • John

    A lot of really good points throughout. One thing that should be addressed, though, is how Google and Yahoo News, which are in the top 10 news Web sites, simply post articles from other news organizations. For example, of the 17 top news stories on Google News today, 13 are from newspapers, including the New York Times. The other posts are from magazines, the wire services, and major television news outlets like CNN. So while readers may not be migrating directly to the New York Times for their news, those readers are still rely on the work of newspaper reporters when they go to some other site for information. This is not to downplay your overall point that newspapers have to take new steps to survive in the digital age. I completely agree with that assessment. But it is important to consider that the traditional news organizations (mostly newspapers) are the companies that continue to invest in journalism and who supply much of the content of Internet news.

  • Steve M.

    You should note the experience of another Finnish paper that dropped its print edition entirely. The result was no increase n web traffic and the bottom fell out of its revenue — a 75 percent drop.

    http://blogs.wsj.com/digits/2009/04/15/one-papers-online-only-move-had-little-effect-on-web-traffic-study-says/

    P.S. In your lede you want ‘flak,’ which is anti-aircraft fire. ‘Flack’ with a C is a PR guy. And you do not need quotation marks around the word stories. Stories are stories.

    Thanks, Steve, I fixed those — Martin

  • http://toughloveforxerox.blogspot MichaelJ

    Q: How to make money.
    A: By whatever is the most appropriate means. The easiest way is to do what has always been done. Sell ads in print for local businesses. Another way to make money is to invent stuff that people want to buy. see: The New Yorker.

    I think people might overlook point number 2 in the post above:

    “Newspapers must become digital enterprises, even if they choose to continue to print on some days or on every day of the week.”

    The purpose of printing on some days or on every day is the same it always was: to supply real estate on which to sell ads.

    Newspapers and journalism have had a rocky marriage. Newspapers are an advertising medium. Many more people look at advertising than read. That’s the end of the main business story.

    Journalism is something completely different. Sometimes they get together. But often not.

    Consider that the best journalism done before and during the Vietnam War was by I F Stone. One person in a room. The best journalism on the run up to Iraq came from the State Department Study Group. Some smart focused people in a room, with small budgets and no private intelligence. The Mandoff scam was first brought to the attention of the SEC by one person, not a journalist. At the hearing he said it took him about 20 minutes to figure out something was very fishy. Then about 2 hours to get the documentation.

    Meanwhile all the newspapers were “shocked! Shocked!” as the financial system melted down. In my humble opinion, both journalism and newspapers will be much better if they agree to an amicable separation, while they sort things out.

  • Yaz

    It’s worth noting that among the 10 sites to which you referred, The New York Times posted the largest rate of growth from 2005 through 2008: 77.3 percent.

    Gannett’s 13.6-percent growth is laughable, and there’s no 2005 data with which to judge Tribune, but I’d venture to guess that several of the other newspaper sites in the longer list posted larger rates of growth than the likes of Google, Yahoo!, AOL News and perhaps MSNBC (52.6 percent, 52, 35 and 67, respectively.

    Newspapers mostly have been slow to adapt, but increasing use of video, audio and, quite notably, interactive graphics are changing that.

    But to place the word “stories” in quotation marks is a ridiculous misjudgment of what pulls the readers who do visit these sites. I’m 31 and a journalist, and I know no one who goes to a news site of any kind for social networking.

    There’s a real danger in newspapers rushing to adopt whatever technology is popular at the moment. It does not make them hip. It reeks of pandering and distorts the point of social networking (which overwhelmingly is used to reconnect to friends and acquaintances).

  • anon

    I’m at a loss.
    As a newspaper we are supposed to just throw out the only part of the business making money today — circulation revenue and print ad sales?
    The Web site doesn’t make any money. At my local paper it accounts for 5% of the paper’s total revenue and it is a pretty good Web site at that.
    You do realize that Web ads pay just a fraction of what print ads pay, right?
    And then I don’t understand this talk of reogranizing newsrooms and such.
    I’m afraid you don’t realize there are no reporters anymore at these papers, no staff. Who are you going to reorganize? Most mid-size papers have lost 50-60% of their newsrooms in the last two years to attrition and layoffs.
    It seems to me the only last, best hope is to start charging monthly for the Web site, something like $5 or so. We have more unique visitors a month than we do paid paper subscribers. If even a quarter of them decide to pay just $5 a month, we would double our internet revenue. We have to get some kind of money flowing here. You can’t have reporters invested in updating the Web all day when that product only generates 5% of your revenue. It dosen’t make any sense.

  • http://www.overabarrel.net Larry Chandler

    Newspapers have to charge. And many of them will, at least the important ones will. The others will die off. Every town used to have a newspaper, which is why there were so many. Now if everyone can get the NY Times, the Washington Post, the local paper isn’t needed. Local bloggers can take care of the traffic lights and zoning laws.

    How a newspaper functions will have to change. This is something the NY Times will have to figure out, but they will need to bring in revenue to pay the reports that go out where the news is and write about it. Google won’t be able to aggregate the news if there isn’t anything to link to. Of course if Google wants to pay reporters, so be it. But news can’t be free any more than groceries and real estate can be free.

  • http://toughloveforxerox.blogspot MichaelJ

    @Yaz, “I’m 31 and a journalist, and I know no one who goes to a news site of any kind for social networking.”

    I’m 62 and know of lots of people who use a social network in a small city in Central PA. It’s part of a newspaper website.

    @anon “You do realize that Web ads pay just a fraction of what print ads pay, right?”

    What is the problem with putting more effort into selling print ads to local business and using the website to identify what people are interested in, by counting the clicks.

    @Larry,
    “to pay the reports that go out where the news is and write about it.”

    What if reporters spent more time on the web and the phone covering a beat? Based on what I’ve seen from beat blogging, the readers of the blog are often the best sources of leads. Maybe it’s team reporting. A reporter, an outside prosumer or prosumers, and writer cover the education, or government or xyz beat.

  • http://mediumrun.blogspot.com Michael Andersen

    Here’s a bit of optimism: what if a pay wall is the way to force newspaper content to change?

    Here’s the sequence of events:

    1) pay wall goes up
    2) readership plummets
    3) revenue plummets
    4) without dropping pay wall, companies look for profitable paid content
    5) newspapers finally have an incentive to become the cluster of niche products, under a single parent brand, that everyone’s been predicting for so long
    6) profit!

  • Steve M.

    I must say that I am weary of this idea that local bloggers will cover local news. Nothing is stopping them from doing that now, but no one does. That’s because it takes a long time, and, honestly, it is very dull. Who hangs out at planning commission meetings for hours if they don’t have an axe to grind?

    What everyone really uses their blogs for is as a forum to complain at numbing length.

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  • http://toughloveforxerox.blogspot MichaelJ

    @ Steve M.
    I think you’ve put you’re finger on something. Only a professional can be trusted to maintain focus over a long time frame. The problem is that right now, professionals don’t have the time to really do that job. It’s hard and often very boring. But it’s what leads to really understanding a story.

    Any thoughts about working with local bloggers as information sources not as reporters. The partisans throw the dirt in the air. The journalist makes sense of it.

    It should mean more time for the journalist and more engagement of the reader/stringers/bloggers.

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  • Steve M.

    Well, in my newsroom we find stories off blogs fairly often. I think they can be handy for that. We’ve gotten stories from neighborhood listservs and our own mothers site, among others. They can be good tipsheets, but the reporting still has to be done. Ideas are gold, but they still have to be made into actual stories.

    Over the decades I have more and more respect for the grunt work that goes into journalism, the shoe-leather gathering of the raw material, the hideously long public meetings, and the combing of the stories by copy editors. It takes a long time, a lot of concentration, and frankly, I wouldn’t do it for free.

  • http://www.gypsybandito.com CT Moore

    I think that newspapers are primarily in the business of providing authoritative information so that they can sell ads. And I also think that there’s still a demand for said “authoritative” information, so to that extent, newspapers dont’ have to change their product, but rather they have to change their business/revenue model,and become less of newspapers and more of news organizations.

    And something about all these new/social media is that they can let them sell ads better than they have ever been able to. And that’s where their revenue model has to change, in the delivery of advertising.

    They have to start phasing out (or at least stop relying on) print editions, and start thinking of ways to use web technologies to better deliver both their content and the ads that they sell alongside it.

    And it’s not rocket science, either. It’s something that plenty of A-list bloggers and affiliate marketers have already figured out how to do on a much smaller level. All newspapers have to do, then, is scale out a revenue model that’s already proven.

  • Newspaper Fan

    Anon’s comment is right on the money. The Web site at all papers cannot come close to the revenue the print edition does, and it never will. The 5 percent number is accurate for most newspapers. Getting that to even 10 percent of what the print provides would be very difficult.

    When the print edition dies, so will the staffs for these web sites. You’ll end up with 20 people working for the web sites.

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  • Natty Bumpo

    Of note in Cedar Rapids — rarely, if at all, does it talk about “journalism” or acting in a journalistic fashion. The priority seems to be “traffic” and “branding” across platforms. Its “watchdog” function will be limited to “topics” the “community” approves of with its “click support” of “bloggers/information gatherers.”

  • http://toughloveforxerox.blogspot MichaelJ

    @CT Moore – “I think that newspapers are primarily in the business of providing authoritative information so that they can sell ads.”

    Actually I think an examination of the history of newspapers is that they sell ads and use news to fill the news hole between ads. Sports, crosswords, cartoons and gossip has been the most successful formula for gathering eyeballs for ads.

    If they ” start phasing out (or at least stop relying on) print editions,” they will have given up their competitive advantage. It’s important to notice that Politico, a very successful news website actually makes it revenue by selling a niche print publication to, I assume, Washington politicians and lobbyists.

    @Natty,
    “Its “watchdog” function will be limited to “topics” the “community” approves of with its “click support” of “bloggers/information gatherers.”
    I think the “watchdog” function of journalism is part of the problem. It probably started in Watergate days and has supported the meme fo the journalist as hero. In a world of opaque institutions it made some sense. As governing institutions become more and more transparent, watchdog is morphing into guide through the information that is dispersed by needs to be organized.

    If the Cedar Rapids papers are paying close attention to the stories that their readers might find interesting, I think that’s a feature, not a bug.

  • http://www.theadwizard.com Dave

    I am a front-line guy in the newspaper print ad sales biz.

    I’ve been in the newspaper business since ’68 if you include my delivery days. I’ve been a rep, production artist, sales manager, publisher, and have owned my own publications and rep house. For the past 8 years I have been selling web based ad sales services. Put simply, I sell web sites that let newspapers sell ads to their customers.

    I think I know what I am talking about. This is my opinion on how to fix newspapers.

    More print display ad sales are needed. Manufacturing and input costs must be reduced.

    To bolster the value to print advertisers, don’t give away the value proposition on the web.

    Better to give away the print product and get more print ad sales revenue than to make the content freely available on the web.

    Then, newspapers should use the web as a tool to lower costs, and to improve print product marketing. Get rid of much of the ‘legacy’ accounting and production systems that worked so well in the 80′s and 90′s. They are cost elephants that can be replaced for a fraction of the price thru outsourcing. Doing that will dramatically reduce payroll and other input costs. Get over ‘pride of ownership’ of big printing presses. Cost elephants.

    And pretty much across the board, get rid of most existing management. They don’t get it all. It’s about selling lucrative print ads. And keeping costs lower than revenue. And they have failed, across the board.

    What are the newspaper owners actually doing? Besides fretting?

    Get down to business. Dump failed management. Completely. Focus narrowly on the core profitable product. Get rid of the competition. Start with your own internal competitors.

    Here’s an example: the web side competes with print side for ad revenue. Go to a newspaper web site. Try to buy a print ad. It ain’t easy… the web staff ‘stash’ the print ad sales info, hide entry points, etc, and promote web ads instead.

    Another example; the flyer sales dept sells delivery of preprints and the value to those advertiser is way higher than comparable ROP. So raise flyer rates, lower ROP for multipage ads, and lobby the hell out of the government to prevent the Post Office from delivering unaddressed mail.

    Yet another example: Look at a sales rep’s list of products. They have 50 different things to sell, and they end up being a jack of all trades, and a master of none. They can’t believe “all 50 are the best”. They can’t really be ‘sales knowledgeable’ about all 50. It’s like saying “We specialize in everything.” Doesn’t work.

    Stop competing with yourself and truly believe in your core product.

    Look at the vertical market publications that have eaten newspapers’ collective lunches: Autotrader, Homes and Land, the local (and chain) weekly entertainment rags, etc. What do they all have in common? They are experts in their areas. They are focused. And they all run tightly cost-controlled operations.

    So, down to brass tacks: who are these advertisers who will spend the money to save newspapers as a business?

    Small local businesses in several verticals such as entertainment, auto, realty, travel, insurance, services, banking etc. Ads sold locally, at a much lower ad rate than national ads. Zone your product if you have to get rates the advertisers can afford.

    Newspapers have to win these local ad battles – and they are not. I often admonished my sales reps: “Win the ad sales battles on Main Street, and Madison Avenue will follow.”

    Flyer conversions. First newspapers must lower their manufacturing costs and then reduce rates in order to convert big box, and vertical market flyer advertising into ROP. Those businesses are currently using newspapers as ‘nearly-free’ delivery vehicles , without paying the true cost of newspaper manufacturing ~ specifically the cost of editorial, which ultimately is the cost of gathering the eyeballs – the end product that newspapers sell.

    And for newspaper owners: it’s about selling profitable ads. It’s not about Pulitzers.

    Of course, I speak as an ad seller. But who listens to me ….

  • http://toughloveforxerox.blogspot MichaelJ

    @Dave,
    re:” Of course, I speak as an ad seller. But who listens to me ….”

    For whatever it’s worth I do. But I’m just a print evangelist that, as far as I can tell, most journalist’s think is an old fogey, wedded to an outmoded technology.

    Thank you for the granular description of the real world.

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