- 1 Fall conference: New England Newspaper & Press Association
- 1.1 ANNOUNCEMENT
- 1.2 SPEAKER: Amy Mitchell, Project for Excellence in Journalism
- 1.2.1 Surveying local sources of news
- 1.2.2 Use of the web
- 1.2.3 One other project embarked on
- 1.2.4 Q&A
- 1.3 SPEAKER: Ken Doctor, industry analyst
- 1.3.1 A discussion about brands
- 1.3.2 Two legs of revenue
- 1.3.3 Missing piece, will pick up later
- 1.3.4 Talking about Schibsted, Oslo
- 1.3.5 Wrapup comment
- 1.3.6 QUESTION AND ANSWER
- 1.4 Peter Doucette, Boston Globe now presenting
Fall conference: New England Newspaper & Press Association
Bill Densmore's notes from the fall meeting of the New England Newspaper & Press Association, at the Crowne Plaza Hotel in Natick, Mass.
Oreste D'Arconte, president of the Attleboro Sun Chronicle, and NENPA board chair, introduces. The theme of the conference: The economy. What can newspaper leaders do to cope, adjust and thrive? An assessment of where we stand comes from Amy Mitchell, the deputy director of the Pew Center Project for Excellence in Journalism.
SPEAKER: Amy Mitchell, Project for Excellence in Journalism
A brief overview of where news are in relation to other sectors in the media.
"The industry is in a worse position than most other sectors."
She shows a chart showing ad revenues in 2010 vs. 2009 -- Local TV up, oneline up, CAble TV up, network TV up, audio and magazines up, but the newspaper down 6.3 percent.
"Most newspapers are still making a profit -- the average is about 5 percent."
"What we are hearing this year is a really heightened sense of confusion, regret, grimness, a sense of loss, and confusion about where to head next -- what should our special and original content be? And some frustration as editors try to keep up with the latest twitter, latest application and still try to do more with less resources."
"We just have to start charging for content, period, there is no more waiting, no more watching."
The years of managing the decline is not over.
The determination that newspapers must come up with the answer doesn't mean they will succeed. She will talk about how PEJ is working to try and help be a facilitator.
The main challenge is the shift in power that is not full appreciated. The biggest issue ahead is not lack of audience or revenue, but that the digital realm in the "news industry is no longer in control of its own future."
Lots of reliance on advertising ad networks and content aggregators and search engines. And device makers control access to the public. Each device requires a new software program. "This is costly, often too costly and confusing for local news organizations." In can be too much multitasking. "So how can a news organization not be there." The industry is now struggling to keep up.
The most important challenge: The technology companies control the consumer data. "Not just the data about what they do on your website, but what else they do ... and they can sell that content to advertisers."
IN a user-controlled world, that audience data will be the key to the future, she says.
Another important challenge -- being able to see who your audience is and how to manage it.
Surveying local sources of news
Mitchell now turns to talking about the results of the latest Pew survey on where people get their news. Word of mouth (55%) is the second most mentioned source after television (74%), especially among 18-29-year-olds. After word of mouth comes radio (51%), local newspaper and/or website (50%), Internet (47%), and print newsletters (9%).
"So the social networking has really brought back one of the most traditional forms of communication we have had," she said.
Surveyors next asked where people go for news by topic. People go to TV for weather and breaking news. TV tied for the lead with newspapers on politics. Newspapers ranked first in 11 of the top 16 topics. "They are mostly the civic-oriented topics, but they are ones that fewer people follow on a regular basis."
The topics, in ranked order of their listed importance to respondents, were: Crime, local politics, community events, arts events, local taxes, schools, housing, government activities, local jobs, zoning and development and social services.
Use of the web
"Those that have the web and are comfortable with the web have already made the switch for most topics," said Mitchell. "So what opportunity does this suggest for newspapers?"
Two fold: Work on the misperception that it wouldn't matter if the newspaper went way. The other -- "The future will be on the web. Newspapers already have a much greater presence on the web than a lot of other outfits." Newspapers could be weather and traffic sources on the web. "That is an area that newspapers can now compete in digitally that they couldn't in their print product."
One other project embarked on
There is no easy way to share this information with others. If there were, how much more efficiently would the process of information work. They have developed a project to accelerate the process of searching for a new method to sustain news. To acquire and share what is working.
"This will be an envolving database of revenue-side experiments," said Mitchell. Everything will be anonymized. "This will be really hard data about how much revenue you have gotten from different kinds of experiments." Mark Jurkowitz is the lead researcher on the project.
So far, she says 10 companies with many papers are involved, including Scripps, the New York Times Regional Newspaper Group and Cox newspapers. They are now finalizing the first survey of data experiments. It will ask about paywalls, digital subscriptions and advertising revenue experiments.
The survey about to go into the field asks very specific questions and it should yield answers about what works and doesn't work in various size markets and types of markets and publications. "The initial site interviews have already given us a lot of insight and very specific material to work with."
A few concepts learned so far: Daily deal a bubble
"Companies are centralizing economic decision making in a way that they had not done for years and reducing local autonomy," she says, because the stakes are so high.
Daily deal -- already a bubble
"We also heard clearly that the daily deal business already looks like a bubble," she said. "They are not getting repeat customers . . . they are getting customers that want the deal . . . fewer predict a long and fruitful future, and a lot of executives are saying the trick is what is going to come next."
Changing corporate culture still hard
Also they are hearing clearly is that after more than a decade of transitioning to a digital way of communicating, a major obstacle continues to be changing the corporate culture. PEJ has talked for years about this culture being a part of the problem.
the journey remains long
"We are far closer to the beginning of this journey than to the end of it," she says they have learned. How far are we from a viable business model? Still a great deal of uncertainty remains. Nobody thinks there is a eureka moment around the corner.
Alan Mutter asks if PEJ has empiricle evidence about success of a paywall. Mitchell answers that it doesn't go above about 2 percent of the total audience people subscribing.
As for using paywalls: "I am very aware of that (lack of clear success) and I am not recommending that (papers use paywalls per se)." She says there are some successes -- at the Arizona paper. She says there are lots of ways to go about it. PEJ is not recommending anything pro or con -- including a paywall per se. But they are looking at certain kinds of charging to see if there is a definitive sense of what's working and what isn't.
"There is not going to be one main revenue source . . . there is going to need to be a lot of different revenue sources, a lot of which don't have to do with news," says Mitchell.
Question: What is prognosis for print product?=
A questioner asks how long does the print product stay viable and does it change in any radical way?
Mitchell says 90% of ad revenue still coming from online. Newspapers haven't been able to afford to give up their print product. A lot of advertisers still like the print ad. "That's starting to change on the local change, on the local side, some of the growth are local retailers that are now comfortable with the Internet -- with the coupons that can be scanned."
But she says a lot of newspapers are starting to change their print frequency cycle to two or three days a week rather than daily.
Q: What corporate culture changes are working?
Mitchell: Part of why it is hard is the culture of newspapers was not about doing change, but about doing things consistently, the same way. So newspaper managements didn't seize creative, disruptive ideas and run with them. "The creative juices about how to do this differently didn't exist within newsrooms," she said.
Q: Will a PR campaign for newspapers' news value work?
Will an effective communication effort about how much newspaper people get from newspapers really work?
"It can't hurt to try," responds Mitchell. "People don't have a favorite news source anymore . . . they are used to going to multiple sources." The public is more educated and smarter about news than we give them credit for.
Q: What about value of focus groups a la Steve Jobs?
With the death of Steve Jobs: He didn't believe in focus groups. And I'd like your take on the value of focus groups?
Mitchell: "I think I'm more in Jobs camps than others." PEJ tends to want to look broadly in a deep way. "It's hard to get to a real deep level of understanding with 10 people in a room."
They are now surveying 900 tablet users that are regular weekly news users and they will have that survey data out later in October. They are trying to see what they value. "You can't do that with a focus group."
She says focus groups do have value in some contexts.
Q: What about national survey results?
Question: What national-regional variations are there in survey results.
Mitchell: Differences are not as much regionally as they are suburban vs. rural, and those that had lived in a community longer. "Those that had lived in a community longer were really integrated, and followed most of those topics closely." Also rural people followed more closely, too.
SPEAKER: Ken Doctor, industry analyst
Doctor talks about who the Biblical-type sears are for the industry.
-- Not Murdoch -- The Daily is at about one-third the circulation it needs.
-- New focus on core readers -- Focus on the tablet -- A quick summary of where revenue might be
"There will not be a single business model that will save the industry or will bring it back to what it used to be. Those of us who used to work in the industry have to get used to that." Building will be brick-by-brick.
Murdoch is the Cecil B. DeMille of publishing. Nots of innovation in the Wall Street Journal.
He talks about Tim Armstrong of AOL-Patch -- talks about re-igniting a content revolution. Arianna Huffington -- now the editor of AOL, the largest hiring agent in the U.S. for journalists in the last 18 months -- a major competitor to newspaper companies.
Google -- size and rate of growth is huge.
Magazines are going through the same things that newspapers are going through.
Schibsted: A new company among the top 10 in news revenues -- based in Oslo, Norway, has spread across Europe, Spain, France and Switzerland, experimenting with a number of new products.
Al Jazeera is the fasted growing Washington, D.C. bureau.
Microsoft is becomming quickly a legacy company.
Fourteen U.S. newspapers companies have gone through bankrupcy and Tribune Co. is still there.
Arthur Suzlberger leads the way toward the digital future.
World newspaper five years ago: $134 billion in revenue. This year: $93 billion in revenues. "My own project is probably in three years this figure will be $75 billion." But that is still a huge number and a huge industry.
There has been no U.S. ad revenue growth for five years. Next year, digital advertising will pass newspapers next year, and eventually TV, too.
Google: 2010 $29.3 billion in revenues, $8.5 billion in profits; Gannett Co. Inc., $5.4 billion in revenues, $588 million in profits.
Facebook will do $2 billion in ad revenues in 2011 -- two thirds of the total of all newspapers.
"There is $31 billion in digital advertising in the U.S. this year. Newspapers will have about $5 billion in digital advertising. You can see where the money is going." It's going to Google, Facebook, AOL and others.
A discussion about brands
Doctor talks about transitions in the retail world. Even Best Buy is getting in trouble because people are buying direct from brands online. He shows the cover of Wired's UK edition.
Two legs of revenue
- Advertising and circulation are two revenue streams
- Print, online and mobile are three products
But Doctor doesn't think "mobile" will be used as a word anymore in three years. It is just about being connected, anywhere. "Too many publishers have been making a mistake in the early mobile world of repurposing online, which is repurposing the print product."
He says 4G mobile connectivity is coming quickly -- Verizon is already offering it in the big cities. "These speeds are happening very quickly and it means video is ascendant."
So some questions:
- Who knows our brands?
- Who already pays us?
- Who are our core readers
- Who watches video?
Doctor talks about Steve Yelvington's (Morris Digital) concept of core vs. other types of customers. Doctor things of the user relationship as a funnel. He thinks counting "unique visitors" is like counting air? What does it mean? Low advertising utility. Most of these people will never become subscribers. Which will become core customers? He estimates a third to a half of the visitors to a website contribute most of the pageviews.
New York times has 30 million unique users, and one mission print readers. So their print readers are about 3 percent of their total unique users (including web). "You really want to those core readers and figure that out. They are the basis of the new business."
You need to make peace with the fly-by traffic coming from search engines and social medial because they are good for traffic and lead generation. "But most of that has almost zero economic value for websites. The key is engaging with the core customers -- keeping the existing ones and generating new ones.
Focus on core readers and 'all access'; new revenues
Doctor calls "users" a pretty odious term. "It is not a very nice description of a customer that you have." The Times, The Globe, Concord Monitor, Columbia are saying you are a customer, we are going to take care of your needs. "A very simple concept -- and they are customers."
He talks about papers that have added online subscription services.
"What did this meant in Columbia, Mo. -- it meant three new newsroom FTEs. It meant instead of cutting people, they added people."
Memphis is going live soon too.
He encourages people to think about offering a Sunday print paper with digital delivery.
"All access is the name of the game. You pay me one price and I'll get your stuff whereever you want to be."
He estimates 125 U.S. daily newspaper titles now have paywalls. All of these papers are partnered with Journalism Online, now called Press+. "What they are finding -- 1% to 3% -- same numbers. Or 1% to 3% of unique visitors are buying digital subscriptions. The models are capturing incremental print subscriber revenue.
The psychology says no, you can't get it for print anymore. As a result, print churn is down. Page traffics are largely holding, small new revenue. Tweaking for 2012.
"They want to test it over the next six months and then put in pay systems everywhere," he says.
Sampling is key, but not too much.
Missing piece, will pick up later
LOST A PIECE OF HIS PRESENTATION HERE WILL GO BACK AND INSERT LATER
He says what is needed is an iTunes for news.
He talks about tablet news aggregators, lead by Google and Yahoo upcoming products, are the new challenge to newspapers.
Talking about Schibsted, Oslo
Doctor says Schibsted is one of the 10 largest media companies in Europe now.
They partnered with a company in the weight-loss business. An online program that provides some editorial intervention. Five percent to six percent of their revenue is coming from services.
He talks about Texas Tribune ancillary services.
- He talks about city guides now being big -- mentions TapIN, a service offered by the Bay Area News Group (MediaNews Group Inc.) from the San Jose Mercury News. "It is a prototype for every newspaper in the country to look at this."
- Marketwatch is charging for a new tablet product.
- Journal-Register in New Haven is creating three times more video than the local broadcaster. "If the tablet is going to be a great place to show video, get ahead of the broadcasters that are slow."
Key to future: Self marketing by retailers
- $63 billion in self-marketing, up from $22 billion in 2006. It's going direct to the consumer. Many companies are now doing this -- Best Buy is an early-adopter example.
"Consumers are finding: How many deals do you want in your in-box in the morning?"
- Self-serve marketing, telesales, feet on the street are the three ways to sell but they are being reformed around marketing services. So media are becoming resellers. Newspapers are selling more and more of other peoples' stuff.
Estimate 3-5 years
A lot of chain businesses say 1/3 of their advertising spend will be in direct-outreach to consumers in a few years. Newspapers have to figure out how to capture that.
(See: "Paper to Persona" which argues that news organizations have to learning how to help their customers manage their persona -- if you can present customers to chain businesses you are entitled to a chunk of the transaction?)
"If we drop this idea that we have to completely understand it, and identity the rapid changes, and delve into it, and recognize that the role and mission of newspapers in their community has never been more important and we just have to find new ways to do it."
QUESTION AND ANSWER
- Q: What might news organizations expect for development costs for doing the software integration with the three most important platforms?
- Doing a tablet app a year ago was $500K. Now you can do it for as little as $50K. Some people have folks in house who can do it, and they may not even realize it. It could be a 16-year-old kid.
- There's a revolution in HTML5. A lot of companies are now using that instead of a proprietary app.
- Q: By going behind a paywall, don't you protect yourself?
- Maybe, but the most successful paywalls are sampling pay walls. So the same kind of fare use applies to tablets as well, if you are doing an HTML5 application. "I think because of the metered approach, publishers are not protected . . . and I think it comes down to product -- how good is the product."
Why did the aggregators win? What to do?
"How come aggregation in news won?"
Aggregation means taking people stuff within the law and repurposing it. News organizations have been saying we are original publishers, we don't do that, that is stealing. Some papers have formed blogger networks to exchange traffic and aggregate them.
How could we aggregate using the tablet form for our city?
"For news organizations it is really prizing the original reporting, but not stopping there, and go ahead with the aggregation, and bringing in enough of the user experience so the user will be satisfied."
"So there is a new chance here, but these windows don't stay open very long."
- The news industry is half of what it was at its peak. That is exactly where the news industry is now. They two industries are going through the same thing. New management in music sees things as they are, not what they were. Newspapers have to do the same thing. Where are we today? How do we build from here? That's parallel. He is going to look at music, and movies and books.
Newspapers have been slow to take that approach of where are we here today, not where we were. "Part of it is we feel deeply about our mission and that is good, but that has prevented us from changing as quickly as we need to change." Think of it like an investor, how would I approach it from day one, today.
Contact: email@example.com @kdoctor
Peter Doucette, Boston Globe now presenting
They raised circulation prices in 2009, which gave the The Globe breathing room, and it paid off, but it was a non-repeatable strategy. They had to find new revenue streams.
They have a two-brand strategy -- http://www.boston.com and http://www.bostonglobe.com / They wanted to protected the substantial ad revenue on Boston.com -- the seventh-largest news site in the country with 7 million unique visitors in August. They felt that could be at risk if they created a paywall.
The higher sites include are Huffington Post, NYTimes, USA Today, LA Times.
"Very good success," at Worcester with their paywall (powered by Clickshare Service Corp.)
BostonGlobe.com and BostonGlobe.com were mergering, from a marketing point of view. They realized they had to go in a different direction. That's how they moved to the two-brand strategy.
Engaging with three types of customers at Globe
The did some research on willingness to pay. They talked about:
- Print-engaged readers, who favor a curated news experience and newspaper-like format, but they are not at all print-exclusive. They index high for tablet usage; they want news that is curated and valued and they have a high propensity for that. "When we built BostonGlobe.com, we are very clear it is for those people."
- Online mobile engaged. The next group. On the go, checking breaking news, active in search, commenting and emailing links and they read and consume in a different way. News surveyors, information snackers. They are looking for breadth, not depth, but are looking for the same type of content. The overlap of what they want is the same, but it is how they want it delivered that is different. Low willingness to pay.
- Casual readers. They exist on line, on print. Some willingness to pay.
The question they then asked: Could we create a separate online brand for The Boston Globe? It did not have it's own front-door to the user, it was not easy to find.
What they came up with
- BostonGlobe.com is a "limited ad environment." It makes the advertising exclusive. A nice choice for brand advertisers. It appeals to former and current Globe subscribers and readers, with elegant ad integration ad meets expectations of the print/egaged.
- Boston.com is free, a mass audience, an ad-supported model and targeted at the online/mobile engaged (the second group above). "The stories will be curated in a way that is designed for them."
- At BostonGlobe.com -- "The important thing is not to go after page views. Page views are not important. It's about drawing the reader in and pursuing that depth and really keeping them engaged."
- Philosophy: Build it once, build it flexible and distribution it across multiple platforms.
Key thing they needed -- was a centralized content-management system.
- They put in a single registration system that works across both sites. "It collects one profile. It means advertisers, if they want to buy a certain audience, no matter where they are in our portfolio, they can do that."
A lot of emphasis on behavior-testing, A-B testing.
- Grow overall audience to 60% of market
- Match product development with needs of targetted audiences
- Provide the ability for advertisres to reach mass or targeted audiences
- Increase overall revenues from a combination of consumers and advertisers
Next steps are around customization and personalization. "That's something we are looking at and hope to move forward on."