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Media disruption

Newsadoo – Spotify for news

I met some folks behind Newsadoo, a new app for accessing news stories, at a start-up conference yesterday. It is an interesting app that offers the ability to follow a story across multiple platforms. It also leverages subscriber content without you needing to have multiple subscriptions if you have a Newsadoo subscription.

This is an interesting product that already partners with some Aussie news outlets such as Crikey, Nine and News.

The world is changing, rapidly.

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Media disruption

UK newspaper publisher to cease Saturday editions in pursuit of digital products

US newspaper publisher McClatchy announced yesterday plans to cease printing Saturday editions of some of their titles. This story fromMarc Tracy at the The New York Times:

McClatchy Says So Long to Saturday (Print) Newspapers

Subscribers to The Miami Herald, The Fort Worth Star-Telegram and The Charlotte Observer will no longer find a newspaper at the end of their driveway on Saturday mornings.

McClatchy, a newspaper chain with more than 30 publications in 14 states, said on Wednesday that it planned to eliminate Saturday print issues at all its daily newspapers by the end of 2020, though a new slate of articles will continue to appear digitally.

Craig Forman, the chief executive of the publicly owned publisher, announced the decision during a call with investors to discuss third-quarter earnings. He added that what he called “digital Saturdays” were already underway at four McClatchy papers: The Sun News in Myrtle Beach, S.C.; The Bellingham Herald in Bellingham, Wash.; The Durham Herald Sun in Durham, N.C.; and The Centre Daily Times in State College, Pa.

“In those markets where implementation has occurred, we are seeing an accelerated conversion to our digital products,” Mr. Forman said. “We expect to expand digital Saturdays to all of our markets during the course of 2020 as we advance toward our digital future.”

We need to look at all moves by newspaper publishers through the lens of driving engagement in digital product as that is their future.

If I  had shares in a newspaper publishing business, I’d want them singularly focussed on driving share value. Today, value will not be driven by sustaining print editions that are not even covering their costs. The future of news is on the digital platforms. While long form analysis works in print, not enough purchase this to sustain it as a daily or even several times a week medium.

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Media disruption

Picture and People magazine to close

This report, from Amanda Meade at Guardian Australia on the closure of Picture and People:

Softcore magazines the Picture and People to close amid sale ban and falling circulation

Exclusive: Hundreds of service stations recently banned the magazines from sale, saying they demeaned women and girls.

Australian men’s magazine the Picture and the 69 year-old People magazine will close at the end of the year, ending decades of printed weeklies featuring topless models and readers’ sex stories.

Publisher Bauer Media was forced to axe the magazines after retailers lined up to ban them from sale at service stations; and readership fell to 0.02% of the population over 14 for People magazine and 0.01% for The Picture. They are already banned from sale in supermarkets.

“Discussions to close the Picture and People magazines have been taking place, as the magazines have lost ranging [visibility], which has affected their commercial viability,” a spokeswoman for Bauer Media told Guardian Australia.

“As closures impact a number of people, including some staff and suppliers, they need to be well considered and timed appropriately.

“The magazines will be closing at the end of the year and we’re working closely with staff to find suitable redeployment.”

I expect minimal impact on the newsagency channel from the closure of these two titles.

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magazines

Pacific Magazines to now report under Digital in Seven restructure

Mediaweek is reporting of a restructure at Seven West that will see Pacific magazines fall under the new Digital division.

Seven getting new chief content officer in Warburton restructure

Warburton explained: “With the new organisational structure, we have focussed on simplifying the SWM organisation to enable our content led growth strategy. This new flatter structure will cement our position as Australia’s leading media group with content at the heart of the business, digital growth maximised, duplication of roles removed in all areas and operating efficiencies implemented.

“We have had to make some tough decisions in order to build the network for the future. I take very seriously any decision that impacts our people and I am grateful for the loyalty and commitment shown by our team over many years. Anyone impacted by changes will have dedicated support and respect throughout the process of transition.”

The change that will potentially make the most impact on the business is a new head of content. The existing content executives Angus Ross (Seven) and Therese Hegarty (Seven Studios) will report to the new executive.

The eight divisions will be:

Content (new appointment soon)
Revenue (where Kurt Burnette will continue to lead)
Marketing (new appointment soon, publicity wrapped into this)
Digital (new appointment soon)
Commercial (where Bruce McWilliam will continue to lead)
Finance
HR
Western Australian

Pacific will now fall under the expanded Digital division with Pacific CEO Gereurd Roberts reporting to the new digital boss.

Seven West Media is also making extra savings of $10m in addition to a recent announcement of $20m in cost savings.

Now more than ever in media and business more broadly, change is front and centre.

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Media disruption

News Corp and Apple in a deal

News Corp announced this on Twitter just now:

For transparency, here is the response I posted in a comment to the tweet: Okay, so it is not a news service. I see no point in paying for your political lobbying.

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Media disruption

News Corp and Nine announce the end of newsagent-led newspaper home delivery in Sydney

The Australian and Mumbrella are reporting the end of newsagent led News Corp and Nine newspaper product home delivery by newsagents in Sydney.

Australia’s two biggest newspaper publishers, Nine and News Corp, will cease newsagent-led home delivery for their print titles in the Sydney metro area. This excludes CBD delivery.

According to a Nine spokesperson, the move is necessary to ensure the model is sustainable.

The move means newspapers will still be delivered to subscribers’ homes, however the service will not be provided by local newsagents. Instead, News Corp will appoint a single distributor for its deliveries as of early 2020, while Nine will use two.

Nine announced its plans to change the distribution for The Sydney Morning Herald and The Australian Financial Review in a letter to newsagents last week, while News Corp announced its plans in June. News Corp is the publisher for The Australian and The Daily Telegraph in New South Wales.

Some online have read this as the end of print delivery altogether. It is not.

It is almost seven years to the day since the News Corp T2020 project was announced to newsagents. The decision by News and Nine to have newspaper home deliveries managed by a distributor is the next step in the roll out of the remnants of that project.

On one hand, this move is another attack by these big businesses on the businesses of small business newsagents, businesses that have faithfully and cost effectively served the publishers for decades. On the other hand, it is an opportunity for newsagents to be done with newspaper home delivery and thereby rid their businesses of a service for which they received a fraction of minimum wage to fulfil.

To those outside the channel, yes, this has been seven years in the making. The main impact will be from ignorant accountants and bank managers who think its will negatively harm the value of businesses. For the most part it will not.

The publishers are doing this because they think it will save them money and / or help them maintain newspaper home delivery for a while yet. I don’t see that happening. There are too many days of the week when delivering newspapers to homes are loss-making. Business managers with an eye to profitability will prevail and at some point, home delivery seven days a week will cease. That will be a sad day.

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Media disruption

Independent media gathers steam while mainstream struggles: latest numbers

At Michael West’s excellent indie news and analysis site is this terrific report about the growth in engagement with independent media:

Independent public interest journalism continues to attract larger audiences. Growth in online readership at www.michaelwest.com.au jumped 67 per cent in the last quarter. Kim Wingerei at theIndependents.org.au reports.

AUDIENCE GROWTH at michaelwest.com.au is part of the broader trend — the latest report for independent digital media shows overall growth of 21.7 per cent in the 27 sites in the index, while the “big four” – Sydney Morning Herald, The Age, The Australian and News.com.au – continue to decline in print and battle to get enough subscribers behind their paywalls to fund their newsrooms.

In the week when Crikey announced much welcome additions to its journalism ranks, it is great to be able to report the continued growth of online independent media(1) in Australia. In the third quarterly report, the 27 online sites(2) tracked grew their web traffic numbers by 21.74 per cent from February to May 2019. With the previous period growth of 10 per cent, that is a whopping 33.9 per cent compound growth over the last six months.

Crikey is another one of the outstanding performers on the list with 49 per cent monthly growth in visits – to 446,000 in May (despite having a paywall) according to SimilarWeb – an online audience measurement service. Crikey will need that kind of growth to help support the addition of a dozen journalists in their new INQ unit (”Inquiry Journalism”), but they seem to have found the right balance with their subscription model and funding from high net worthers Cameron O’Reilly and John Fairfax.

This is not only happening in Australia. Around there world there is growth in subscriber and reader engagement with independent media. This is a healthy trend in terms of news access. It is an interesting trend for retailers of news products, like newsagents.

I subscribe to four independent news outlets in Australia. I appreciate their independence. What these sites are doing for news is similar to what our businesses can do for retail. We are independent, competing with big business.

Read more of the above article here.

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Media disruption

No escaping the newspaper publisher push to end seven day print

You can’t escape the the promotion of digital subscriptions and weekend only delivery from News Corp. with their now regular pitch printed next to the masthead.

It is odd selling a product for a meagre margin that actively says stop buying from here and, in fact, stop buying the physical product.

Previously, one could rip off the post-it note ad promoting deals like this. You can’t now that it is part of the newspaper itself.

It is actions like this pitch from News Corp, actions that show our shops as being expensive and irrelevant that get retail newsagents wondering if they should cut the paper before the paper cuts them.

The Australian has a similar pitch in print as well as online:

There is no upside for print newspapers. What we are seeing now is the management of their decline and, for some, demise. Publishers will make moves that serve their needs and the needs of their shareholders. Newsagents are far removed from consideration despite what any publisher rep says.

Hence, the active consideration – when do we quit newspapers in our shops?

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Media disruption

News Corp closes some newspapers in Queensland

Mumbrella has this story.

News Corp has further removed itself from the regional media market, selling the remaining 50.1% stake in Community Newspaper Group to Seven West Media.

The sale comes as the publisher also closes two Quest titles in Queensland, and after last week’s announcement that it would be shuttering the print operations on a Victorian Leader title.

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Media disruption

Against the odds: The Guardian breaks even

The Guardian has announced that they have reached break even point. This is a big story as it demonstrates that a thoughtfully developed and carefully executed plan can make a digital news platform operationally and financially viable.

As a subscriber to The Guardian and as on who appreciated their genuine independence, I am pleased to read of their success.

Today, we have announced that the Guardian has successfully completed its three-year turnaround strategy — we have hit our goal of breaking even, and made a small operating profit on our path to sustainability. This means that the money we make from advertisers combined with what we receive in the generous support from you, our readers, has this year covered the cost of producing the journalism that informs and inspires millions of people around the world. Our unique ownership model means we are not controlled by a billionaire owner, or a group of shareholders demanding financial returns — any profits made, and all financial contributions from readers, are reinvested directly into our journalism.

Further in the article by Guardian editor-in-chief Katherine Viner, there is a reflection that I think speaks to similar challenges faced by newsagents, challenges faced by the channel today.

Three years ago we faced a very different situation, when a broken business model for news was threatening to destroy media organisations around the world: print advertising was collapsing, newspaper sales were declining, and the promise of digital advertising growth was going almost entirely to Google and Facebook. These threats still exist, and while we’ve found a way to counter them, the situation remains fragile.

I see this story as offering hope and inspiration for newsagents as we transition our businesses, seeking new shopper traffic, higher margin dollar transactions and greater relevance to shoppers.

All in our channel need to work on:

  1. Attracting new shoppers.
  2. Driving up margin dollars earned per transaction.
  3. Bringing shoppers back more consistently.
  4. Managing our businesses for profit.
  5. Making our businesses appealing to everyone who walks past, walks inside, reads abut us, checks us out on social media.
  6. Changing shopper perception.

This means ranging new products, recasting the shop floor, breaking our current model. While this sounds dramatic, it is what is necessary. Historically, we have relied on consistent traffic from agency and low margin lines with the argument that high traffic makes low margin viable. That argument fails in 2019 with falling traffic from every traditional agency line product. While there are some exceptions, the channel as a whole is not experiencing such exceptions.

The future can be bright is we break our own model and recast our businesses.

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Media disruption

News readership growth as print sales continue decline

Fairfax is today reporting terrific growth in readership for The Sydney Morning Herald as reported by NewsMediaWorks, a publisher run organisation that tracks readership combined with print circulation.

The Sydney Morning Herald started 2019 as the most-read title bolstering its lead over News Corp titles after recording more than 8 million digital and print readers for the first time.

The Age also increased its audience from 3.66 million to 4.02 million over the month.

Here is part of the table at the SMH article, listing results.

I am about to start harvesting data for over the counter sales in newsagencies for the last quarter. Early indications are of further significant declines.

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Media disruption

Thirteen years ago, Rupert Murdoch gave a speech about the future of newspapers that remains relevant today

Rupert Murdoch have a speech in March 2006 to the Worshipful Company of Stationers And Newspaper Makers on the future of the newspaper industry.

The speech was seminal at the time, particularly because it came from someone who had not been a believer in technology, someone who was old school.

What we know, thirteen years on, is that News Corp. and Murdoch has changed and done reasonably well through the change.

While the speech has plenty of terrific takeaways, this resonates today for me as it did thirteen years ago when I first read the speech: But we must not lose our nerve. We must be prepared to take risks and accept that we will make mistakes, sometimes very large ones.

I am sharing the entire speech here, it is still available online at The Times, as a point of inspiration for change that is as big an issue as ever confronting newsagents…

Thank you very much for inviting me to give this annual address.   It is an honour to join such distinguished company and to share with you some thoughts on the huge changes that will reshape the human experience in the 21st century.

I think everyone in this magnificent hall would agree that the world is changing at a pace never experienced by our ancestors.As that great American scientist, Freeman Dyson,*1 has said,  the technological revolution is like an explosion which is tearing apart the static world of our ancestors and replacing it with a new world that spins 1000 times faster.

The scientific revolution that began 300 years ago in Europe has accelerated exponentially, spreading knowledge at a speed that will, I believe, change our way of life.

It is difficult, indeed dangerous, to underestimate the huge changes this revolution will bring or the power of developing technologies to build and to destroy –  not just companies but whole countries.

For instance, we probably haven’t heard the name of what will be the world’s largest company in 2020.

Indeed that company may not even exist yet — although I hope that it does, and that I know its name!

Societies or companies that expect a glorious past to shield them from the forces of change driven by advancing technology will fail and fall.

That applies as much to my own, the media industry, as to every other business  on the planet.

Power is moving away from the old elite in our industry – the editors, the chief executives and, let’s face it, the proprietors.

A new generation of media consumers has risen demanding content delivered when they want it, how they want it, and very much as they want it.

This new media audience – and we are talking here of tens of millions of young people around the world – is ALREADY using technology, especially the web, to inform, entertain and above all to educate themselves.

This knowledge revolution empowers the reader, the student, the cancer patient, the victim of injustice, anyone with a vital need for the right information.

It is part of wider changes that reach far beyond the media industry.

I will discuss those changes in a minute, but let me first say that I understand why many people find the speed and direction of change so unsettling.

To them, this is the age of anxiety, an age in which technology and science seem to pose huge threats, rather than present great opportunities.

And it is perfectly true that we do face some daunting challenges.

Let us consider some of them.

How will the old nations of Europe cope with the economic rise of nations such as China and India?

Will the US and Britain remain immune from the challenge of these emerging  superpowers?

Can we find victory over a new and harrowing form of terrorism carried out in the name of Islam? We should not fool ourselves. There are no civilians and no chance of a negotiated peace in this war.

How do we contain unstable regimes in North Korea and Iran that are bent on, and very close to, developing nuclear weapons?

How are we to provide food and water for a global population that is set to rise from 6.4 billion today, to 9.2 billion in 2050 ?

As we ponder these and other truly momentous questions, we would not be human if we did not look into the eyes of our children and grandchildren and sometimes wonder what world we will be leaving them.

My argument this evening is that, whatever our fears, we actually live in a second great age of discovery.

I believe that the fusion of technology and science allied to the natural creativity embedded in the human spirit will enable us to  surmount the dangers we undoubtedly face, and forge a better world for all of us.

And equally I believe that what is loosely called the media will play a crucial role in shaping that destiny by facilitating the flow of ideas and the interaction of creative minds.

Never has the flow of information and ideas, of hard news and reasoned comment, been more important.

The force of our democratic beliefs is a key weapon in the war against religious fanaticism and the terrorism that it breeds.

Remember, it was ideas – the ideals of democracy allied to the free market – as much as the economic collapse of the Soviet Union that brought the West victory in the cold war.

The free flow of information is not just a building block of our democratic system;  it is also the fuel of the technological revolution.

We are making new discoveries across the spectrum of science: in medicine, genetics, biology, physics and in every field of technology because information is flowing like rivers between universities, drug and biotech companies, libraries, laboratories, and public and private research centres. And, of course, across most national boundaries.

That information is carried via print, newspapers, magazines and books.  It is carried on television, laptops, personal organisers, cell phones and, of course, the web.

The media use all these platforms to give the public access to this waterfall of information.

This is how public opinion is shaped. And we know how public opinion can make history.

Let me give you an example.

Consider this splendid space, the Stationers’ Hall, with its many coats of arms mounted on these ancient walls.

I hardly have to tell you that this Hall was rebuilt after the Great Fire of London, and completed 333 years ago in 1673.

If you happened to be living in London that year, you would know that Europe was briefly and uneasily at peace. You would hear the political gossip about popish plots swirling around the court of King Charles the Second.

But you would not really know what was going on beyond the shores of this island, or perhaps even in the next town.

You would not know, for instance, that British power in North America was being challenged on an issue – taxation – that would lead to revolution.

You would not know, of course, because there was no means of finding out.  There were no newspapers and obviously no radio or TV. The little information available was circulated via pamphlets and filtered through coffee shop conversations.

But history in those early years of the 1670s was, as ever, on the march.

A year after this hall was finished, a small event in the British colonies of America went un-remarked upon elsewhere in the world. Philip Carteret, governor of New Jersey, launched a campaign to enforce payment of quitrents, land taxes raised by Parliament in London.*2

The Governor’s decision turned simmering resistance into local rebellion. The rebellion petered out, but a fuse had been lit that flared through the 13 colonies  leading to the revolution of 1776 and the creation of the United States of America.

Yet it took 100 years from that unnoticed event in New Jersey before English Rule in North America was ended.

Think what would have happened had the news of the tax revolt in New Jersey been made public throughout England and Europe as those events unfolded across the Atlantic. Think of the pressure on monarchy and parliament from a people weary of war and foreign involvements.

Think of the great excitement in France at another chance to do down the ancient foe.

Historians will argue forever about what might have been.

Let me join them and entertain you with this thought:

If print technology had allowed The Times newspaper to launch 100 years before it actually did in 1785, the American Revolution  – and everything that flowed from it –  might have happened much earlier.

Had The Times reported the growing fury in the last decade of the 17th century among the North American colonies at taxes imposed by government in London, do we think it would have taken another 100 years before revolution ended colonial rule? I doubt it.

Since those days, and especially since the rise of the popular press at the turn of the 19th century, the power of the media to influence events and drive change has grown hugely.

But, as I said earlier, power is moving away from those who own and manage the media to a new and demanding generation of consumers – consumers who are better educated, unwilling to be led,  and who know that in a competitive world they can get what they want, when they want it.

The challenge for us in the traditional media is how to engage with this new audience.

There is only one way.

That is by using our skills to create and distribute dynamic, exciting content.   King Content, the Economist called it recently. But – and this is a very big BUT – newspapers  will have to adapt as their readers demand news and sport on a variety of platforms: websites, ipods, mobile phones or laptops.

I believe traditional newspapers have many years of life left but, equally, I think in the future that newsprint and ink will be just one of many channels to our readers.

As we all know, newspapers have already created large audiences for their content online and have provided readers with added value features such as email alerts, blogs, interactive debate, and podcasts.

Content is being repurposed to suit the needs of a contemporary audience.

This divergence from the traditional platform of newsprint will continue, indeed accelerate for a while.

The same is true of television.

Sky has already started putting programmes onto PCs and mobile phones.

That old square television box in the corner of the room may soon be dead but the  television industry is seizing the opportunities thrown up by the technology revolution.

PVRs – personal video recorders – streaming live TV onto mobile phones – beaming programmes onto computers via IPTV – internet broadcasts –  this wave of innovation gives the consumer huge choice at relatively low cost.

So, media becomes like fast food – people will consume it on the go, watching news, sport  and film clips as they travel to and from work on  mobiles or handheld wireless devices like Sony’s PSP, or others already in test by our Satellite companies.

This does not mean that television and newspapers need lose their historic role of keeping people informed about what is happening in the world around them.

Given the speed of change around us that role has never been more important.

Consider the field of medicine where science fiction is becoming science fact.
We have learned more about how to prevent and treat cancer in the last 10 years than in the history of mankind.

That is the stated view of the American Cancer Society.*3

Here is another view from the National Cancer Institute in the US :

“By the year 2015 we aim to see the elimination of death and suffering due to cancer.” *4

What has prompted two such reputable organisations to make these huge claims – claims that will, if true, change the lives of millions of people on this planet?

Three years ago a group of scientists made a breathtaking breakthrough by publishing  a genetic map showing the DNA breakdown of the human race.5

Driven by ever-more-powerful computers, the new science of DNA is giving us control over the evolution of most life forms and most critically of our own human existence.

It means that scientists are gaining the power to create plant and animal life with the specific intention of feeding more people with better food, with curing people of a range of diseases: the power to enable people to lead far better lives.

It means that medicine has been changed forever.

Already DNA knowledge is being used to manufacture human hormones, reduce heart blockages, shrink tumours and treat multiple sclerosis.

Little wonder that governments, universities and the big drug companies are investing billions into DNA related research.

The DNA breakthrough happened because, throughout their research, scientists in the US were able to post their findings on the web, drawing information and inspiration from colleagues around the world.

The internet was crucial to that astonishing development and I am sure that the web will continue its rapid development as the prime media channel for information, entertainment, business and social contact.

One of the reasons I say that is the success of a company we bought last year called www.MySpace.com.

This is a networking site in which millions of people, aged mainly between 16 and 34, talk online to each other about music, film, dating, travel, whatever interests them. They share pictures, videos and blogs, forming virtual communities.

Since launch just two years ago, the site has acquired sixty million registered users, thirty five million of whom are regular users.

This is a generation, now popularly referred to as the “myspace generation”, talking to itself in a world without frontiers.

It is just one example of how the media, with its ability to reach millions with information, entertainment and education  can use the achievements of technology to create better  and more interesting lives for a great many people.

And it is one reason why I believe we are at the dawn of a golden age of information – an empire of new knowledge.

But knowledge alone is not a magic wand which can be waved to banish poverty and produce riches. Life is not like that.

Consider the words of the Nobel Laureate David Baltimore, President of the California Institute of Technology, who said recently. *5a

“We are creating a world in which it will be imperative for each individual to have sufficient scientific literacy to understand the new riches of knowledge so that he can use them wisely.’’

There you have it.

Those people, those companies, those nations which understand and use this new knowledge will be the ones to prosper and grow strong in our age of discovery.

History is populated with examples of how knowledge can transform the fortunes of a small company, a weak nation, a threatened tribe.

The caveman who first struck fire from a flint was possessed of knowledge that made him master of his universe – although not for long.

Knowledge, in the form of superior technology, won Nelson the Battle of Trafalgar.  His brilliantly aggressive tactics decided the scale of the victory.  The victory itself was won before a shot had been fired.

The British ships had faster firing, more accurate, guns and better gunpowder. *6

That technological advantage ensured victory and allowed the British control of the seas in the decades that followed, contributing directly to the prosperity and innovation of the Victorian era.

From the wheel to the web, from the printing press to fibre optic cable, it has always been technology that has driven history. Those in the driving seat have always been those who fully understood and used that technology.

Today one of our great challenges is to understand and seize the opportunities presented by the web.

It is a creative, destructive, technology that is still in its Infancy, yet breaking and remaking everything it its path.

The web is changing the way we do business, the way we talk to each other and the way we enjoy ourselves. As old and new technologies merge, the questions multiply:

Will the internet kill fixed-line telephony? It is already happening via VOIP  – Voice Over Internet Protocol.

When high-speed broadband pipes TV and film onto enhanced computer screens at home, what happens to the television companies, the film studios and indeed newspapers?

I pose these questions – and there are many more thrown up by the web – in this context.

There are about one billion people in the world who have access to computers, although only about 10%  to broadband.

In 20 or 30 years there will be six billion such people, or two-thirds of the human race. We know the $100 laptop is on the way. In a few years, there could be a $50 laptop.

It would be folly for me to stand here and pretend I know what this really means in any detail for future generations.

But I will answer a question I suspect is forming in your minds.

What happens to print journalism in an age where consumers are increasingly being offered on-demand, interactive, news, entertainment, sport and classifieds via broadband on their computer screens, TV screens, mobile phones and handsets?

The answer is that great journalism will always attract readers.  The words, pictures and graphics that are the stuff of journalism have to be brilliantly packaged;  they must feed the mind and move the heart.

And, crucially, newspapers must give readers a choice of accessing their journalism in the pages of the paper or on websites such as Times Online or – and this is important – on any platform that appeals to them, mobile phones, hand-held devices, ipods, whatever.   As I have said newspapers may become news-sites. As long as news organisations create must-read, must-have content, and deliver it in the medium that suits the reader, they will endure.

Great content always has been, and I think always will be, king of the media castle.

Caxton’s printing press marked a revolution that is with us 500 years later.

But the history of that revolution is not one in which the new wipes out the old. Radio did not destroy newspapers, television did not destroy radio and neither eliminated the printing of books.

And whatever you think about Hollywood, the film industry is very much alive.

Each wave of new technology in our industry forced an improvement in the old. Each new medium forced its predecessor to become more creative and more relevant to the consumer.

I began by saying that some people find the changes we all face daunting.

This is understandable because we all fear the unknown.

In the first Age of Discovery, some six hundred years ago, the great European explorers stood on the rim of the known world and set sail, literally, into the unknown.

Technology had given them ships equipped, although barely so, for long voyages. Science provided rudimentary navigational aids, and royal and private treasuries the financing. But what sent Bartolomeu Dias, Christopher Columbus, John Cabot and Henry the Navigator across the ocean was not just a quest for new trade routes to the East.

They consciously sought to expand the horizons of humanity, to risk their lives to find a new world.

That is where we are today. We are immeasurably better equipped than our ancestors to face the challenges posed by some of the issues I have raised this evening.

But we must not lose our nerve. We must be prepared to take risks and accept that we will make mistakes, sometimes very large ones.  Above all we must have what those great seafaring  explorers had in abundance: the courage to use the technological change that is unfolding around us to help make a better world.

We are all on a journey, not just the privileged few, and technology will take us to a destination that is defined by the limits of our creativity,  our confidence and our courage.

Notes

1.  Tomorrow’s People. Penguin. Susan Greenfield: P 268
2. Chronicle of the World, News International Library, London.
3. The Genomics Age, Gina Smith, Amacom 2005 p 137
4. National Cancer Institute newsletter Vol 1 issue 2.Fall 2003.See Gina Smith ( above ) p 135.
5. Two groups of scientists cooperated in the final breakthrough. Those from the federally funded Human Genome Project and from the privately financed company Celera.
5a.  David Baltimore, 66, is a leading American biologist who won the 1975 Nobel prize for Medicine .He has had a profound influence on matters concerning DNA research and AIDS. Outside science he is best known for his role in an affair of alleged scientific misconduct which cost him his then job as President of Rockefeller University in 1991. Although Baltimore was not personally accused ,a fellow researcher with whom he co-authored a paper was alleged to have failed to back up certain claims with scientific evidence. In 1996 all charges against the fellow researcher were dismissed and Baltimore’s conduct was not even addressed by the enquiry. This allowed him in 1997 to become president of the California  Institute of Technology a post he is due to leave at the end of this academic year.
6. Trafalgar and the making of a British hero, Adam Nicholson p 176

*Freeman Dyson is the grand old man of American Physics having retired from a lifetime spent mainly as Professor of Physics at the Institute for Advanced Study in Princeton.His most famous book The Sun,the Genome and the Internet was published in 1999.

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Media disruption

Apple set to launch digital magazine store

Late to the Party, Apple has announced plans to launch a digital magazine store.

An updated Apple News app will gain a Magazines tab – similar to the app Texture, which Apple acquired last year – letting consumers subscribe to a bundle of magazine titles for a monthly fee. Final details are still being worked out, and Apple’s plans could change. An Apple spokesman didn’t respond to a request for comment.

The magazine subscription service, which has been in testing with Apple employees for months, will launch as part of an iOS 12.2 update scheduled for release in northern spring.

How, where and when people access news and information has evolved and continues to evolve. This move from Apple is not unexpected.

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Media disruption

Brilliant Washington Post ad

Here is an ad from The Washington Post, which ran during the Super Bowl. It is an excellent pitch for journalism and trusted news outlets. Democracy dies in darkness.

I note the ABC is the most trusted news outlet in Australia. It is unfortunate its budget has been cut so much in recent years. This matters because of the extraordinary concentration of media ownership in Australia.

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Media disruption

Weekends are what matters next for Nine/Fairfax print newspapers

Fairfax is promoting the weekend only print and anytime digital access to The Age and The Sydney Morning Herald. Here is the pop up currently running on the website for each masthead:

It makes sense as shifting to weekend only print editions is a common move among daily newspaper publishers who have retreated from seven day publishing.

A cross at The Australian Financial Review, their pitch is less in four face, but clearly focussed on weekend only publication.

I am not looking forward to Nine/Fairfax or any published reducing or cutting print editions as when it first happens the disruption to the channel will be considerable. However, since it will happen, the best thing for all is for it to happen sooner so we get out the other side.

I say the disruption to the channel will be considerable because of the psychological impact I suspect it will have on many, newsagents who have not started to transition their businesses to rely less on print media.

Given the weekday circulation for the Fairfax titles and considering moves made by some daily newspaper publishers overseas, I am surprised we still have the seven and six day products being published. The losses most weekdays must be considerable.

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Media disruption

Newspaper publishers fail to leverage the interest in stories with their paywall strategy

I get that publishers need to monetise content to pay for more content. I am happy to pay. If I like a song, I buy it. If I want to see an episode of a TV show, I buy it. However, I can’t buy a news story.

The paywall approach by news publishers is out of date. It was created for a time long gone. Today, stories matter far more than a masthead package.

Take this Herald Sun exclusive story from today. They want me to sign up to a subscription. The cost outweighs the benefit I see in accessing the story. So, I will wait to find out more about the story.

If, on the other hand, I could buy this story for a micro payment, they’d get me and, for sure, I’d probably join a micro payments service where I could nominate the types of stories I like and agree on rules for being served these single stories.

The price for a story could depend on the story itself, in a way similar to how some entertainment content is priced online.

Their demand that I sign up for an old-school subscription is so yesterday. It’s what they did when news on paper delivered to your door was a booming business. It is out of touch with today.

How, when, where and what we consume through subscription has changed. News publishers need to change to reflect this.

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Media disruption

Spotlight on News Corp circulation numbers

Alex Turnbull tweeted Monday about circulation numbers for News Corp. titles

Here are two tables included in the thread. Turnbull says they are from the News Corp. 10K filing. They show challenging circulation numbers for the publisher. The first table shows the year on year movement in circulation for cap city dailies. the declines we are seeing here are like what we have seen over the last two years for most Fairfax titles.

This second table shows circulation for cap city dailies.

In Some respects, there is nothing new here. Through the quarterly benchmark results we have seen declines in over the counter purchase. However, for the Herald Sun and the Daily Telegraph, my numbers re not as bad as the numbers here.

Newsagents cannot rely in print newspapers whatsoever in their business planning and modelling. We can transition through this and have viable, growing businesses. Achieving that requires action and a focus outside what has been traditional for Australian newsagency businesses.

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Media disruption

A news consumer’s view of the paywall and the impact on newsagents

This is an interesting thread on Twitter about the new paywall for The Brisbane Times. Newsagents get a mention. Be sure to read the full thread and comments.

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Media disruption

The challenge for celebrity / gossip magazines

Sales of celebrity / gossip titles continue to fall dramatically. They are not the traffic drivers we relied on in our newsagency businesses ten and more years ago. Back then, Monday’s were wonderful with the steady stream of shoppers coming in for their fix. Today, while day of issue sales are higher than other days, they are not even remotely close to what they were.

The consumer of these titles is well satisfied with immediate access through TMZ, social media, purpose specific apps and channels such as YouTube and Twitter, like this one, PeopleTV

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magazines

Q3 2018 newsagency performance benchmark results

Core categories in trouble. New categories growing.

This newsagency sales benchmark study reflects sales results as tracked in 147 retail newsagency businesses in Australia for the third quarter of 2018 compared to the same period in 2017. Only businesses with accurate data are included.

Each data point is the average, mean, of all data for the data point.

In assessing results at the category level, I have only included data for each category businesses trading in that category.

OVERALL BUSINESS PERFORMANCE METRICS.

  • Customer traffic. Down 3.5%
  • Overall sales. Down 3%
  • Basket depth.No change.
  • Basket dollar value.Up .5%

CORE PRODUCTS.

  • Newspapers. Unit sales. Down 11.5%.
  • Magazines. Unit sales. Down 10.5%.
  • Greeting cards. Revenue. Down 5%.
  • Stationery. Revenue. Down 12.5%
  • Lotteries. Revenue. Down 3%
  • Tobacco. Revenue. Down 15%.
  • Agency. Parcels, gift cards, betting account top-up. Down 6%.

SPECIALTY PRODUCTS.

  • Gifts. Revenue. Up 4%
  • Toys. Revenue. Up 5%.
  • Plush. Revenue. Up 7%.
  • Collectibles. Revenue. Up 5%.
  • Craft. Revenue. Up 3%.
  • Coffee. Revenue. Up 17%.

What does this mean?

It was a particularly tough quarter with all traditional, core, categories declining. Also, the gap between businesses at either end of the performance spectrum is wider than ever.

New traffic should be priority #1 in every newsagency business. By this I mean, traffic for products the business is not traditionally known for. This is hard work as it involves the whole of the business: buying, pricing, display, in-store engagement and out of store marketing … all of which needs to be done under the name of the business but in a way that keeps this connection in the background.

I think a crucial data point that would be interesting to gather and discuss internally is…

How many unfamiliar faces did we see today?

Track this as much as possible. Pursuing a goal starts with accurate base line data.

The GP challenge.

At the core of chasing new business is the need to lift the profitability of the business. A key way for doing this is making more from each item you sell. That does not necessarily mean selling everything at the highest possible price., A better approach could be to sell more items with a higher overall average GP.

If you were, for example, to decrease revenue from papers and magazines and increase revenue for gifts, you could see overall business GP grow in that the GP% of gift can be double or more than of cards.

The supplier challenge.

The mix of suppliers to the channel is changing. As a supplier learns what they could make from newsagents, they tend to seek to engage with more newsagents. This is something to be wary of as the point of difference you may have once had an as early adopter can diminish once late bloomers latch on to something.

This is a reason for change in the supply mix. While for sure there will be everyday core lines, the reality is that change for at least a third, especially in gift, is important.

Final words.

It is easy to wallow and roll around in the challenges and negativity. That will not fix anything in your newsagency business. That is 100% ion you. Take a step, no matter how small, every day, toward a brighter future. Do something, anything, that moves you beyond the current trajectory if you are unhappy with the current trajectory. Wallowing, complaining … they are not beneficial steps and usually serve to make things worse.

Own your situation and own your obligation to improve it. Do this and there are many in the channel who will help.

Mark Fletcher.
Email: mark@towersystems.com.au  Website: www.towersystems.com.au  Blog: www.newsagencyblog.com.au
M | 0418 321 338

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Media disruption

The steep decline in magazine browsing impacts newsagency foot traffic

For many years, newsagents would complain about shoppers who stood and sat in the magazine aisles reading magazines. We are not a library posters were common as were requests for shoppers to buy a magazine or leave. back in those days, it was common for newsagents to have 1,200+ titles in their range.

Today, there are plenty of retailers in our channel who would welcome readers, wanting to have someone, anyone, in the shop rather than no one. While I found some browsers years ago frustrating, never did I put up the library sign, never did I ask people to leave.

Magazine browsing has declined significantly. Typically, on a Saturday afternoon ten years ago we would have at least ten people at a time browsing magazines, reading articles, comparing recipes and generally immersing themselves in the medium. Today, we rarely have a browser on a Saturday.

Magazine shoppers today more often choose their title and purchase. There spend less time considering other titles, less time immersed in the medium in-store.

This shift, this significant shift, is reflective of the change in how, where and when people consume content that was, ten or so years ago, primarily available in magazines.

The newsagents who wanted to stop browsers have got their wish. And, I wonder how they feel about it.

I would love to have access to data on browsing numbers today compared to ten years ago, from a good cross-section of newsagency businesses and by day of week. Real data, not anecdotal, hard evidence. I think it would bring into focus the impact not only of disruption to print but also the disruption to our old channel brought on by convenience and other outlets also offering access to print product.

The knock-on effect for us of the decline is browsing is the loss of the opportunity to convert the magazine browser into a purchaser of some other products.

Thinking back to the usual Saturday, there are, I am sure, people who don’t visit a newsagency at all today because they no longer browse magazines. This is a traffic challenge our channel has to confront.

While we focus on declining magazine sales, there is this decline in browsing that is a big issue in my view as many retailers have not offered a browsing / lingering alternative.

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magazines