While journalism is busy reinventing itself for the digital future, the newspaper publishing business has taken up residence in the town of Jeopardy. It’s moved in close to the high street where you’ll find the travel agent, the video rental store and the record store. There’s a public pay phone at the other end of the street.
Newspaper advertising revenues have halved over the last 10 years. In the US in 2013, newspapers banked $23 billion less in advertising sales than in 2003. Adjusted for inflation, newspaper advertising sales in the US have fallen to the level they were in 1950. Newspaper circulation rates are also on the slide. While digital readership is rising rapidly, digital revenue offsets only a fraction of the traditional decline. It seems like every month another established title gives up on print, opting to go digital-only in an attempt to survive.
Some 80 percent of online news today is free and it’s available globally in multiple languages in close to real time. Those remaining newspaper publishers hope that digital subscriptions and pay walls will stem the flow. The problem with pay walls is that they are a 20th century answer to a 21st century problem, an attempt to navigate the uncharted road ahead using just the rear view mirror. Pay wall subscriptions ignore the fact that people have more choice over where they get their news today than at any time in human history and brand loyalty with newspapers is evaporating. People no longer read newspapers; they read stories and commentators from across multiple titles.
The Sun, the UK’s largest tabloid, saw 1.2 million shaved off its circulation between 2003 and 2013; it has added an estimated 100,000 online subscriptions. The Times, the quality daily in the News UK stable, lost 260,000 daily sales over the same period and replaced them with just 153,000 digital subscribers. The Financial Times’ digital edition is faring better but this is largely due to the niche nature of its content and the fact that the majority of subscribers can charge the subscription costs back on expenses.
Another challenge with pay walls is the subscriber’s cash flow. Buying a newspaper was a less demanding transaction when handing over pocket change each day to the seller; an annual subscription feels more like a commitment. There’s also the issue of generation Y who have little or no history of paying for news.
Steve Jobs made it possible for people to buy one song at a time in return for a painless and secure online payment. By February 2013, less than 10 years after it first launched, 25 billion songs have been sold on iTunes. Apple has also had 40 billion app downloads. It took £10 billion in sales from its App Store in 2013 alone (other online app stores are available).
Newspapers need to look at their content in the same way Apple has led us to look at music, apps and in-app payments. Micropayments work if they’re easy. Yes, there would be winners and losers, chart-toppers and long tails. Editors will know the desks that are profitable and those that are not. Stories that sell will survive while stories that don’t – well they won’t. But I can’t see any other way for newspapers as we have known and loved them to survive another decade of decline.
Of course owning a newspaper was never a surefire way to making a fortune. It is often said that a good way to make a small fortune is to start with a large fortune and become a newspaper baron, but now billionaires seem more interested in buying loss-making sports clubs to gain power, influence and social acceptability. Judging by multiple discussions with various newspaper journalist friends of mine over the last 12 months, careers in the industry have become so uncertain that many are now prepared to consider roles in PR.
Few beyond shady politicians and dubious bankers would welcome a corporate-sponsored ‘newspaper’ industry focused on attracting digital clicks and where ‘public interest’ and holding authority to account plays second fiddle to the latest pop star’s indiscretions or simply what’s interesting to the public.
The only alternative is a news industry that’s staffed by independent minds capable of asking the difficult questions equipped with the necessary resources but in the long run, it has to be able to pay its way.
I reckon that, were he still alive, Steve Jobs might have made a go of it.