This is a very tough environment for newspapers, and one that does not look to be brightening any time soon. A lingering recession level of spending and generational and lifestyle changing trends point to a dismal future for any newspapers looking for a resurgence to past days of glory.
Not only is the economy one of the toughest environments that any of us has lived through, it has also drained advertising dollars from established print media and shifted it into digital media. Talk about taking a barrage of blows to the head and body, this is today’s environment
With that as a backdrop for today’s comments we also have self inflicted news that tells us that ‘they can’t really be serious can they?’ It was reported that Gannett’s CEO of the last six years, Craig A. Dubow, received a parting gift of – $37M in bonus and retirement benefits. During his period of leadership the company’s stock declined from a high of $75 a share to just$10. Unfortunately, there are a number of other CEOs who have gotten similar treatment after miserable leadership terms. Theirs has been the one bright story of the last decade for newspapers.
Aside from the economy the trend to digital news has also accelerated the down trend for newspapers.Now they are banking on some new trends to help rescue them, before the companies run out of money to help cover their severance as they head off to happier pastures.
The iPad has helped drive this new shift, and now the Newstand app recently added to iOS5 on Apple mobile applications appears to be working as well. The new native app works especially well for magazines, and The Daily, the first iPad only news product from Murdoch Inc. Conde Nast is reporting a 268% increase in digital subscriptions since Newstand was announced. Still a bit of a stretch a newspapers work through their own versions of apps for both phones as well as tablets. In some cases they are developing their own tablets in conjunction with manufacturers.
A recent Pew study as noted in a recent Newsosaur article on tablet owners shows that only 14% had subscribed to a paid news app. Also that only 21% say they would be willing to subscribe if the price was below $5 per month. 83% also said that being free or low cost was a major factor in their decision about what to download. One good factor for digital users and providers of digital content, including our major ’newspapers’ shows that 43% of respondents said they now spend more time consuming news than before they bought their tablets.
I’ll take that as good news, and it certainly mirrors my own habits. I’ve been excited to see just how much content I can get for free, but have also found that there is some content I am now willing to pay for, I’ve moved across the aisle and am a willing participant of paid digital content.
The other good piece of news about the ’43 percenters’ is that they too will make the change since their really won’t be as much available on the free channels in the future…unless you go ‘full social’ and get all of your news from your ‘friends.’ I’m not ready to do that yet…and doubt I ever will. You would know what I mean if you could see some of them.
Pew study as noted in a recent Newsosaur article on a recent Pew study that only 14% had subscribed to a paid news app, Only 21% say they would be willing to subscribe if the price was below $5 per month. 83% said that being free or low cost was a major factor in their decision about what to download. 43% of respondents said they now spend more time consuming news than before they bought their tablets.
Helping to drive the trend to digital deliver of news is the development and testing going on for a wide array of tablets being developed directly for major newspapers, including the Tribune group and the Philadelphia newspapers. No final details have emerged, but it appears that they will be available for subscribers.
It was reported, perhaps by union insiders, that in the recent negotiations for a new contract for the paper’s print unions that they were offered a shorter 3 year contract, and that they were lead to believe that the paper had plans to stop printing by that time.
Now we can see what the future really looks like. As a former newspaper ‘insider’ I know what it costs to print and deliver the papers daily, and a digital only world would be a less costly one for sure. Too bad digital ad rates are lower that print ones, but that too could change when print fades away.
Another accelerator in our switch to digital comes from Amazon. With it’s very small price tag the Amazon Fire which is to be shipped on November 15th could have a great impact on the digital distribution of print and magazines along with a host of other digital media including video and audio. I know that my son has one ordered for his wife and/or his one-year old daughter, and I will order one for my wife as well if they check out as OK. If not, then they both will have to settle for an iPad. Life is tough that way.
Like the Los Angeles Newsgroup here in So Cal, Cox Media has adopted a similar shared editorial program. This means that the editorial and news staffs are shared, reducing costs for the newspapers. In Los Angeles this appeared to be a big deal with a broad range of papers with distinct markets sharing news staffs. In the case of Cox it will mean the sharing of staffs from Florida, Atlanta and Texas. We’ve come to accept the downgrading of the news content on a local basis, since most of the papers involved were 2nd tier any way, but I don’t know that Atlanta and Austin will accept it without a lot of belly aching. I don’t know about Atlanta, but I bet some larger than life Texas oilman would consider starting his own newspaper in Austin if they felt slighted. Texas takes this stuff seriously…just like their BBQ.
Back to Southern California! The So Cal newspaper marketplace continues to stumble forward with few positive signs of positive growth. The biggest question mark concerns the Orange County Register which is still up for sale. Some past bidding pitted the Los Angles Times vs the Los Angeles Newsgroup in a potential bidding war…but no winners emerged with both large newspaper groups mired in their own financial problems.
I don’t see any big hitters with deep pockets willing to step forward and take over The Register here. Texas still has oil, but our key drivers in OC have been homebuilders…and they can’t even afford to take over each other for now. Who knows what the future will bring, but nothing big on the horizon now for our local media. We shall slog on with the media who ‘brung us here for now!’