Study: Newspapers Must Cross ‘Digital Abyss’

May 12, 2009

This article is included in these additional categories:

Creative & Formats | Financial Services | Newspapers

Though many newspaper companies are cutting costs to stay afloat in the economic downturn, they have not yet reinvented their business model to respond to consumers’ increased digital consumption, according to a recent report from PricewaterhouseCoopers (PwC) in cooperation with the World Association of Newspapers (WAN).?

The report, “Moving into Multiple Business Models: Outlook for Newspaper Publishing in the Digital Age,” finds that, despite the current state of turmoil in the global newspaper business, a future remains for newspapers that can gain access to the capital needed to fund the transition to digital business models.

“Newspapers will continue to have a long-term future and will remain an instrumental media category, but not likely in the capacity seen today,” said David Moss, director, US Advisory practice, PricewaterhouseCoopers. “While consumers still value the deep insight and analysis provided by journalists, the key to survival is for newspapers to cross the ‘digital abyss.’ Established newspaper brands that have access to the funding needed to properly invest in the digital transition and right-size their print business can thrive.”

The report confirms that a growing number of consumers, especially those in younger age groups, are turning to online media:


Experimentation Not the Same as Reinvention

Though the research finds that many newspaper companies currently are experimenting with multiple platforms – such as internet versions, blogs, citizen journalism, social networks – and new technologies (e.g. mobile) as channels for content distribution to reach new audiences, their print versions still remain the largest source of revenues.


This print-based model, PwC said, is not sustainable for the long term. “They need to reassess the role of the aggregator, introduce new subscription models and innovate with advertisers by diversifying their product offerings,” Moss said.

While Pwc concedes that some newspapers are finding success by developing “hyper-local” or “local-loop” sites that address content at the neighborhood level, findings show that advertisers still want and need to reach mass audiences.

Need for Integrated Print and Online Approach

According to the study, the primary challenge for newspapers is to find a profitable balance where they can offer advertisers an integrated approach to reaching mass and niche audiences through both print and online channels.

Selling digital advertising the same way they sell print advertising will also not be enough. Today’s digital advertising revenue simply does not pay the bills of the traditional newspaper infrastructure,” Moss added. “Something has to give.”

PwC contends that successful newspaper operations of the future will be those who have challenged their existing business models and considered all available options for reinventing themselves in the new digital era.

Recommendations for newspaper companies from the report:

  • Meet increased demands from customers for specialized, targeted, relevant and timely information while not losing sight of the need to continue providing general news to a wider audience.
  • Leverage content online by creating compelling information for specific niche markets and distributing it across multiple platforms. Use strategic partnerships with other content providers to enable targeting of specific audiences to keep costs low.
  • Adopt a flexible and innovative approach in working with advertisers across a spectrum of economic arrangements.
  • Redesign marketing and sales efforts to capture the opportunities delivered by multiple channels to market.
  • Reinvent the newsroom by off-shoring/syndicating generic editorial content and consolidate the general newsroom to create content that can be tailored at a local level.
  • Have a team of journalists who work within a multiplatform environment (online, blogs, social media, citizen journalists), in which they have total editorial control for creation and delivery of content ranging from photographs and video through editorial copy.

Related research by the Pew Center’s Project for Excellence in Journalism found that many of today’s journalists are pinning future hopes on an online advertising revenue model for their publications, but a significant percentage simply don’t know what the future will bring.
About the research: PwC compiled the findings of the report from an online survey of 4,900 respondents on the change in consumer behavior in respect to their consumption of news content across Canada, France, Germany, the Netherlands, Switzerland the UK and the US. Interviews were also conducted with 30 leading newspaper publishers and 10 leading advertiser and media buyers globally.

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