After 244 years, Encyclopedia Britannica announced earlier this year that it has decided to go out of print and focus on its website due to the realities of the digital age. The reasoning behind this was that by going digital, it will afford the company with the opportunity to continuously update people on the latest and greatest. This is a situation that is occurring more frequently these days. Print advertising has been viewed as a dying industry versus the internet which is considered the most potential place of growth. As more people flock to the internet to read their news and get information, publishers are responding by cutting print or just solely focusing on digital.
In a recent article, we see how multiple newspapers have relied more on digital due to the challenging ad market. Advance Publications and Postmedia will no longer be printing its paper on certain days and the Times-Picayune, one of the nation’s oldest newspapers, downgraded to three days a week. On the magazine front, there have been additional frequency cuts from Family Circle and Woman’s Day. At my most recent job at CNNMoney, I saw a similar push being made. Print sales at Fortune magazine were down for the past several years. The decision was made to cut the publishing frequency from 25 times a year to 18 times. With the frequency cut, more pressure was put on CNNMoney.com to generate new revenue and remain more relevant to readers who flocked to the website. When I worked at nyt.com it was a running joke that the newspaper would eventually turn completely digital, but how far away is that from reality? Currently there’s a whole demographic that’s comfortable with print because that’s what they grew up knowing, but as more people grow up with digital exposure, we could see things begin to shift. By going the digital route there are numerous advantages such as the reducing of overhead costs while still allowing the company to generate revenue through online advertising, covering events in a timelier manner, improved display including enhanced video and image features, and the increased likelihood for the publication to be a part of the social media community. But at the same time the disadvantages include: breaking the bond consumers have with their newspapers, alienating readers that are not digitally savvy, growing costs to continue attracting and retaining readership etc…
Once publications turn digital, they often lose their cache and have difficulty maintaining their stature as the authority for local news and information. They enter an environment where they are merely another voice among millions such as Huffington Post or Buzzfeed. Competition now exists online that never existed a decade ago. Will publications eventually go completely paperless?
http://gigaom.com/2012/06/05/what-happens-when-a-newspaper-is-just-another-digital-voice/
2 comments:
No question the digital conversion is happening. Hard to predict a floor on the print side given we'd need better demographic research. but to put this in perspective - check out http://www.naa.org/Trends-and-Numbers/Advertising-Expenditures/Annual-All-Categories.aspx (newspaper industry page). Print ads still a $20bn market in 2011 vs digital ad sales of $3.5bn. Granted print ads are down from a 2005 high of $47 billion but the decline rates are "slowing". Classified clearly has migrated online as you can see the decline in classified ads above the average - i mean, who is putting an ad for their roller skates or a babysitter in the paper anymore. Outside of Classified though, the digital cents vs print dollars probably do not convince Gannett and Media General to shutter their papers.
The other point is circulation. there does seem to be a base level of circ which is probably artificially held up by hotels/lobbies/offices/etc that order their papers almost with no regard for technological change. As long as the circ base remains in tact, advertisers will stick with it.
Don't forget - the printed yellow pages businesses still exist and are multi billion dollar enterprises. Bankers like me tried very hard to kill these businesses with debt, but they live on like pesky weeds!
Excellent points Will! Although there is a base level of subscribers, in order to be successful publications will need to surpass the operating costs to produce the magazine. This poses an issue as subscribers typically pay a fraction of the newstand price for a subscription copy. Given the heavy discounting, publishers look to newstand sales to boost profitability. If readership continues decreasing, we'll eventually start seeing advertisers pull its ads. It'll be interesting to see how the state of the economy in addition to the digital movement will impact publishers in the long run.
Also, in recent news SmartMoney announced plans to move to a web only magazine:
http://online.wsj.com/article/SB10001424052702304898704577480711000935208.html
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