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Media disruption

News Corp. campaign seeks to cut newsagent shop traffic

The ad placed in a perfect position on the front page of the  Herald Sun yesterday pitched a campaign aimed at cutting the daily visit to the newsagent, or any other retailer, to buy the newspaper. It pitched a $1 a day home delivery, an offer that must be loss making for the company. An offer that makes buying the newspaper at retail look expensive.

There was a time these pitches were done with a stuck on ad, which we could remove. No more.

Here is the pitch from page 12 of the newspaper. $1 a day for six months. That sounds like a deal too good to pass up since for the cost of four week day over the counter purchases you get seven days home delivered.

Newsagents need to be aware of this latest pitch from News Corp. They should factor it into consideration abut the future role of newspapers in their businesses. News is making its focus clear, it is investing in home delivery as the loss leader, making it more appealing than over the counter.

Take note.

As a news consumer…

The thing is though, home delivery has to be managed by the customer. If they are away they have to deal with that,. If the paper does not come, they have to deal with that. If the paper is in the wrong place, they have to deal with that. If the paper is late, they have to deal with that.

The world today, when it comes to accessing news, comment and analysis, is spoilt with convenience. On our phones and tablets we have easy access to multiple news platforms, subscription and free. Why sign up for something with out of date content, that is hard to navigate, that results in trash and that often represents only one view of the world? The price tells us that there is not much faith in the content and convenience offer within the company.

The core issue for newspapers, in my opinion, is the medium. The print medium for news is out of date, inefficient, bad for the environment and cumbersome. We have moved,. I certainly have moved on. The only time I engage with a print newspaper now is at a coffee shop when waiting for my coffee and even then its is rare.

The pay walls don’t get me subscribing. Occasionally, there is a Media story in The Australian behind a pay wall that I want to read, but I will not sing up to a subscription to access them, because doing so gives me access to so much trash.

I subscribe to support good journalism. As I wrote almost two years ago, I have subscribed to The Washing Post, The New York Times and The Age. I have also supported several digital news platforms.

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Media disruption

How women’s magazines lost their X-factor

“While magazines worked for many years, technology has advanced women’s media into a form where it’s much more convenient to consume it through websites, podcasts, and social media.” Leigh Campbell, former Cosmopolitan beauty editor.

In an ABC published opinion piece, When sex doesn’t sell: How women’s magazines lost their X-factor. Jessica Martin takes a good look at Women’s Magazines, their past, today and the future.

This is a terrific article, well worth the read.

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magazines

Fairfax effectively pulls distribution of The Age out of South Australia

Fairfax yesterday announced to South Australian newsagents that shortly the company will cease distributing The Age on the day of publication. Instead, South Australia will receive The Age the day after publication. Here is the Fairfax announcement:

This decision is not a shock. It is also not the first time an Australian publisher has done this.

More changes will come following the Nine takeover of Fairfax and more changes will come after those changes.

Print media continues to confront significant disruption – advertising continues to fall and print circulation continues to fall.

We need to run our businesses attracting shoppers who are not newspaper shoppers.

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Media disruption

Brilliant result for The New Daily

The New Daily has reported an excellent result, five years since launch. Founder, Bruce Guthrie, looks back on the five years is a terrific piece those interested in media and, in particular, news media…

Rupert Murdoch’s The Australian actually editorialised against us in those first few hours, saying we shouldn’t be allowed to launch at all. One particularly corrosive columnist tried to kickstart a letter-writing campaign to have us shut down. Apparently it was OK for American billionaires to own media, but not the members of Australian not-for-profit superannuation funds.

Then a high-profile Fairfax columnist pretty much wrote us off on day two. Another one was at it just last week. Some things never change.

We’d expected the attacks, so our editorial staff of a dozen or so just ploughed on. By the end of that first month we had attracted 157,000 unique visitors to the site and we were pretty chuffed. Now we get more than that in a single day and have 2.3 million unique visitors a month.

We also had 30,000 subscribers by the end of that first month. They’d signed up for our five-mornings-a-week newsletter because, they told us repeatedly, Australia needed more news outlets that were, well, new and Australian.

Five years on, we have close to half-a-million subscribers who receive our updates twice a day Monday to Friday and once a day on weekends. We also publish regular newsletters on property, travel and health. Taken together, we send out close to a million emails a day and six million a week. Subscription is free and open to all.

Further on in the piece is this:

In its past two monthly measures of Australian news sites, Nielsen has estimated The New Daily’s digital audience as bigger than that of The Australian.

Kudos to the people at The New Daily. Their role in news coverage in Australia is brave, needed and appreciated.

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Media disruption

ACCC will not oppose Fairfax / Nine merger

The ACCC has announced today that it will not oppose the merger of Fairfax and Nine. In the announcement are some interesting points worth highlighting:

“Media markets are highly dynamic. The shift to online and the huge reduction in hard-copy classified advertising revenue have changed the media landscape irrevocably,” Mr Sims said.

“The impact of some of these changes is demonstrated in the approximate halving of advertising revenue from Fairfax’s digital and print mastheads in the last five years,” Mr Sims said.

“The ACCC recognises there will likely be changes to the way Fairfax and Nine operate in future, either due to the changing media landscape more generally or due to the merger itself. However, we reached the conclusion that if such changes do occur, they would not be, to a significant extent, caused by the merger lowering the level of competition,” Mr Sims said.

I remain of the view that Fairfax will be the first Australian newspaper publisher to quit seven day publication of a capital city print newspaper. Fresh management eyes, which will come with the merger, will, I expect bring this day closer. My suspicion is that News Corp. has the new that they will not even contemplate such a move until after Fairfax, even though the numbers for some of their titles make such a move sensible.

Newsagents need to be aware of this and already well advanced in business decisions in a world without the daly newspaper hitting the shelves. There is no downside in being prepared, in attracting shoppers for products other than newspapers.

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Media disruption

Newsagents quitting newspapers

Another newsagent let me know yesterday that they are quitting newspapers. They are in a suburban shopping centre and sell 50 or less papers a day. As a sub agent, they make around 25 cents a paper.

Their decision has been brought on because of a dispute with the distribution newsagent. That was over withdrawal of services previously provided by the newsagent – returns pickup.

The dispute caused the retailer to look at numbers and at what else is purchased by the newspaper shopper and, over a month, how often newspaper shoppers returned for other purchases.

The data gathered shows that in their situation, less tham 5% of newspaper customers bought anything else in the paper purchase visit and none returned to purchase at any other time, separately.

The shop is well laid out with current gift and other offerings and compelling displays for impulse purchase.

On the evidence and considering the stress of the relationship, they made the decision. That is six retail newsagents I know of this year who have made the decision.

I am not writing here as advocacy. rather, I am noting what some are doing, and in doing this they are ahead of newspaper publishers in terms of the commercial value of a declining product. This is a KEY POINT of this post. Daily newspapers in Australia will close. Newsagents quitting the category are exercising more control over their own businesses.

The criteria for such a decision is, in my opinion:

  1. Return on floorspace.
  2. Customer value in the paper purchase visit transaction.
  3. Customer value over the long term outside the paper purchase transaction.
  4. The preferred identity of the business. For example, are papers a service that it is good for the business to offer?
  5. The ease of the supply relationship.
  6. Whether the print product fits the strategic direction of the retail business.

I am at the point of considering this decision in one of my businesses. It has been under consideration for a few months, I think we are ready to make a decision.

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Media disruption

Highly recommended: Press, BBC TV mini-series

Press is a six episode BBC mini-series about two rival newspapers and abut the challenges faced by publishers and, in particular, their print product. I have seen then just-aired series and highly recommend it to anyone interested in newspapers. The battle between the Post and the Herald has some resonates when thinking about News and Fairfax titles.

Here is a brief trailer for the series:

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Media disruption

No surprise on Cosmopolitan closure

Bauer Media has announced that Cosmopolitan magazine will close. here is part of the story from Mediaweek today with more:

Bauer Media has announced the closure of Cosmopolitan Australia. The December issue will be its last.

The magazine has been published in Australia for over four decades and was a Hearst Magazines title published in Australia under licence to Bauer. Remaining Hearst titles in the Bauer stable are Harper’s Bazaar and Elle.

Cosmopolitan launched in Australia as part of what was then called Magazine Promotions, the Fairfax magazine arm. Later rebranded as Fairfax Magazines, the title moved along with most of the Fairfax’s other magazine brands to ACP Magazines.

Launch editor was Australian magazine legend Sylvia Rayner, who started the title in Australia in 1973, moving across from Woman’s Day where she was fashion editor.

Bauer Media CEO for ANZ Paul Dykzeul said this week: “It has not been an easy decision to make. However, the commercial viability of the magazine in Australia is no longer sustainable.

“Magazine closures are never easy, desirable or done without careful consideration for all of those involved. We have to ensure that we are continually reshaping and defining the business so that our readers of today, and those of tomorrow, remain engaged with the content we publish and the platforms upon which we deliver.

“We are incredibly proud of the brand and the people who have been involved and represented over the last 45 years. It has helped to launch the careers of media personalities, supported great brands and causes, and inspired millions of young women across the country.

“We would like to thank everyone who has contributed to the brand and its legacy over the years.”

Business is business. Newsagents checking their own sales data will know the titles facing similar challenges.

Cosmopolitan has been a good title. The challenge today is that this consumer is able to find satisfaction through other more visual, interactive and timely platforms. This sits at the core of challenges facing all publishers.

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magazines

Newspaper publishers shed more staff

Mumbrella has reported more jobs lost at News Corp in Marketing. This is on the back of job cuts at Fairfax a few weeks ago.

A spokesperson for News Corp told Mumbrella today: “A number of changes to the state marketing teams were announced this week. It follows the restructure of the group marketing function a month ago. The changes at a state level are designed to align roles and responsibilities to those at a group level. Unfortunately this has resulted in a small number of roles being made redundant.”

This sounds like marketing will be more national than state based.

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Media disruption

News Corp circulation results

The latest News Corp annual report provides a glimpse into the performance of its Australian Newspapers. When considering the data included and considering previous circulation data we can see declines. For example, as reported in Crikey today,  the circulation of the Herald Sun is down 8.5%.

Newsagents see the challenges of print every day in sales numbers.

Here is the part of the News Corp. Annual Report dealing with Australia in its entirety:

News Corp Australia

News Corp Australia is one of the leading news and information providers in Australia by readership, owning over 200 newspapers covering a national, regional and suburban footprint. During the year ended May 31, 2018, its daily, Sunday, weekly and bi-weekly newspapers were read by over
8.4 million Australians on average every week. In addition, its digital mastheads and other websites are among the leading digital news properties in Australia based on monthly unique audience data.

News Corp Australia’s news portfolio includes The Australian and The Weekend Australian (National), The Daily Telegraph and The Sunday Telegraph (Sydney), Herald Sun and Sunday Herald Sun (Melbourne), The Courier Mail and The Sunday Mail (Brisbane) and The Advertiser and Sunday Mail (Adelaide), as well as paid digital platforms for each. In addition, News Corp Australia owns a large number of community newspapers in all major capital cities and leading regional publications in Geelong, across the state of Queensland and in the capital cities of Hobart and Darwin.

The following table provides information regarding key properties within News Corp Australia’s portfolio:

News Corp Australia’s broad portfolio of digital properties also includes news.com.au, the leading general interest site in Australia that provides breaking news, finance, entertainment, lifestyle, technology and sports news and delivers an average monthly unique audience of approximately 9.1 million based on Nielsen monthly total audience ratings for the year ended June 30, 2018. In addition, News Corp Australia owns other premier properties such as taste.com.au, a leading food and recipe site, and kidspot.com.au, a leading parenting website, as well as various other digital media assets. As of June 30, 2018, News Corp Australia’s other assets included a 13.5% interest in HT&E Limited, which operates a portfolio of Australian radio and outdoor media assets, and a 30.2% interest in Hipages Group Pty Ltd., which operates a leading on-demand home improvement services marketplace.

Further into the report is this interesting par on ad revenue:

The Company’s print and digital advertising revenue is also affected generally by overall national and local economic and business conditions, including consumer spending, housing sales, auto sales, unemployment rates and job creation, advertisers’ budgeting and buying patterns, which tend to be cyclical, as well as federal, state and local election cycles. In addition, certain sectors of the economy account for a significant portion of the Company’s advertising revenues, including retail, technology and finance. Some of these sectors, such as retail, are more susceptible to weakness in economic conditions and have also been under pressure from increased online competition. A decline in the economic prospects of these and other advertisers or the economy in general could alter current or prospective advertisers’ spending priorities or result in consolidation or closures across various industries, which may also reduce the Company’s overall advertising revenue.

Then this on newsprint:

Newsprint Prices May Continue to Be Volatile and Difficult to Predict and Control, and any Increase in Newsprint Costs may Adversely Affect the Company’s Business, Results of Operations and Financial Condition.

Newsprint is one of the largest expenses of the Company’s newspaper publishing units. During the quarter ended June 30, 2018, the Company’s average cost per ton of newsprint was approximately 1% lower than its historical average annual cost per ton over the past five fiscal years on a constant currency basis. The price of newsprint has historically been volatile, and a number of factors may cause prices to increase, including: (1) the closure and consolidation of newsprint mills, which has reduced the number of suppliers over the years; (2) the imposition of tariffs or other restrictions on non-U.S. suppliers of paper; (3) an increase in supplier operating expenses due to rising raw material or energy costs or other factors; (4) failure to maintain the Company’s current consumption levels; and (5) the inability to maintain the Company’s existing relationships with its newsprint suppliers. Any increase in the cost of newsprint could have an adverse effect on the Company’s business, results of operations and financial condition.

And this on print media disruption:

The News and Information Services segment’s advertising volume and rates, circulation and the price of paper are the key variables whose fluctuations can have a material effect on the Company’s operating results and cash flow. The Company has to anticipate the level of advertising volume and rates, circulation and paper prices in managing its businesses to maximize operating profit during expanding and contracting economic cycles. The Company continues to be exposed to risks associated with paper used for printing. Paper is a basic commodity and its price is sensitive to the balance of supply and demand. The Company’s expenses are affected by the cyclical increases and decreases in the price of paper and other factors that may affect paper prices, including tariffs or other restrictions on non-U.S. paper suppliers. The News and Information Services segment’s products compete for readership, audience and advertising with local and national competitors and also compete with other media alternatives in their respective markets. Competition for circulation and subscriptions is based on the content of the products provided, pricing and, from time to time, various promotions. The success of these products also depends upon advertisers’ judgments as to the most effective use of their advertising budgets. Competition for advertising is based upon the reach of the products, advertising rates and advertiser results. Such judgments are based on factors such as cost, availability of alternative media, distribution and quality of consumer demographics.

The Company’s traditional print business faces challenges from alternative media formats and shifting consumer preferences. The Company is also exposed to the impact of long-term structural movements in advertising spending, in particular, the move in advertising from print to digital. These alternative media formats could impact the Company’s overall performance, positively or negatively. In addition, technologies have been and will continue to be developed that allow users to block advertising on websites and mobile devices, which may impact advertising rates or revenues.

As a multi-platform news provider, the Company recognizes the importance of maximizing revenues from a variety of media formats and platforms, both in terms of paid-for content and in new advertising models, and continues to invest in its digital products. Smartphones, tablets and similar devices, their related applications, and other technologies, provide continued opportunities for the Company to make its content available to a new audience of readers, introduce new or different pricing schemes, and develop its products to continue to attract advertisers and/or affect the relationship between content providers and consumers. The Company continues to develop and implement strategies to exploit its content across a variety of media channels and platforms.

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Media disruption

No wonder people are placing fewer classifieds in newspapers

I had cause to place a death notice in a News Corp. newspaper early last week. The website was clunky. I selected a price point based on the word count but the website dropped me to a lower word count and then bumped me up to where I was in the first place. It was cumbersome and frustrating.

However, that is not my main complaint. Here it is…

In the death notice there was mention of a memorial service, within the word count limit. They would not permit this. Either I had to create two separate ads, one in death notices and one in funeral notices for a higher cost, or move the whole ad from death notices to funeral notices.

Due to an apparent arbitrary rule of News Corp. I either spend more on two notices or end up in a category that I considered inappropriate. This is a rule of yesteryear, a rule that, to me, demonstrates why fewer people run classifieds in newspapers.

It is not as if the mechanics and structures of the classified columns will not permit memorial service details in death notices. There is no reason for the rule from what I can see except to maximise revenue for the publisher.

What is interesting is that I ran the same ad in a small local regional newspaper, not part of the News Corp. world, and they accepted and ran the ad without issue. In their world a death notice can include a memorial service notice. Indeed, the experience with the regional publisher was simpler, faster and more enjoyable than with News.

Based on my personal experience with News Corp. classified ads, I think it is a broken out of date business that charges as if it is the only platform for these life moment notices. Thankfully, there are more options, which can be used depending on the generation one wants to reach with such a notice.

For all their focus on digital delivery, pay walls and more, News Corp. has their classifieds business rooted in the past, in an era when print was the only platform.

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Ethics

Big media news: Fairfax and Nine announce plans to merge

Here is the ASX announcement:

MERGER OF NINE ENTERTAINMENT AND FAIRFAX MEDIA

The recommended transaction:

  • –  Creates Australia’s largest integrated media player
  • –  Enhances position with agencies and advertisers in a consolidating environment
  • –  Enables optimisation of, and incremental investment in, content across FTA, BVOD, SVOD and digital
  • –  Offers data solutions at scale combined with premium content
  • –  Combines Nine’s and Fairfax’s proven brand building capabilities to accelerate Domain’s growth profile

26 July 2018: Nine Entertainment Co. Holdings Limited (Nine) (ASX:NEC) and Fairfax Media Limited (Fairfax) (ASX:FXJ) are pleased to announce that the companies have entered into a Scheme Implementation Agreement under which the companies will merge to establish Nine as one of Australia’s leading independent media companies (Proposed Transaction). The Proposed Transaction will, subject to required approvals, be implemented by Nine acquiring all Fairfax shares under a Scheme of Arrangement (Scheme).

Following completion of the Proposed Transaction, Nine shareholders will own 51.1% of the combined entity with Fairfax shareholders owning the remaining 48.9%. The combined business will be led by Nine’s current Chief Executive Officer, Hugh Marks. Three current Fairfax Directors will be invited to join the Board of the combined business, which will be chaired by Nine Chairman, Peter Costello and include two further current Nine directors.

The combined business will include Nine’s free-to-air television network, a portfolio of high growth digital businesses, including Domain, Stan and 9Now, as well as Fairfax’s mastheads and radio interests through Macquarie Media.

Under the Proposed Transaction, Fairfax shareholders will receive consideration comprising:

  •   0.3627 Nine shares for each Fairfax share held (Scrip Consideration)
  •   $0.025 cash consideration per Fairfax Share (Cash Consideration) together, Aggregate Consideration.

    The Aggregate Consideration implies a:

  •   21.9% premium to Fairfax’s closing price on 25 July 2018 of $0.770
  •   22.6% premium to Fairfax’s one month VWAP to 25 July 2018 of $0.766

    The Directors of Fairfax will unanimously recommend that Fairfax shareholders vote in favour of the Scheme in the absence of a superior proposal and subject to an independent expert concluding that the Proposed Transaction is in the best interest of Fairfax shareholders.

    Commenting on the Proposed Transaction, Nine’s Chairman Peter Costello said: “Both Nine and Fairfax have played an important role in shaping the Australian media landscape over many years. The combination of our businesses and our people best positions us to deliver new opportunities and innovations for our shareholders, staff and all Australians in the years ahead.”

    Fairfax’s Chairman Nick Falloon commented: “The Fairfax Board has carefully considered the Proposed Transaction and believes it represents compelling value for Fairfax shareholders. The structure of the Proposed Transaction provides an exciting opportunity for our shareholders to maintain their exposure to Fairfax’s growing businesses whilst also participating in the combination benefits with Nine.”

 PAGE 1

For personal use only

The merger is expected to deliver annualised pro-forma cost savings of at least $50m which will be fully implemented over two years. The Proposed Transaction, on a pro forma basis, reflecting the full benefit of the cost savings, is expected to be earnings per share neutral for Nine shareholders, prior to any consolidation adjustments.

Importantly, the combination unlocks the potential for significant value creation by combining the content, brands, audience reach and data across the respective businesses, including majority owned group companies Domain and Macquarie Media. After completing the Proposed Transaction, Nine will review the scope and breadth of the combined business, to align with its strategic objectives and its digital future.

Nine Chief Executive Officer Hugh Marks commented: “Nine’s strong operating momentum has allowed us to invest in the future of our business through each of 9Now, Digital Publishing and of course, Stan. This merger with Fairfax will add another dimension, creating a unique, all-platform, media business that will reach more than half of Australia each day through television, online, print and radio.

For our audiences and employees, this means we will continue to be able to invest in premium local content across news, sport, entertainment and lifestyle. For our agency partners and advertisers, we will provide an expanded marketing platform with even greater advertising solutions underpinned by a significantly enhanced data proposition. For our shareholders, the merged business will generate an increasing percentage of its earnings from high growth digital businesses that provide a compelling opportunity to generate both incremental value and cash flow into the future.”

Fairfax Chief Executive Officer Greg Hywood said: “The Proposed Transaction for Fairfax reflects the success of Fairfax’s transformation strategy which has created value for shareholders through targeted investment in high growth businesses, such as Domain and Stan, and prudent management of our media assets. The combination with Nine provides an exciting opportunity to continue to drive incremental value well into the future.”

“We are confident that the strength of the combined management team and staff will ensure the continuation of our quality journalism.”

For the year to June 2018, Nine is expecting to report Group EBITDA at the upper end of the previously announced range of $250-260m, and to declare a second half dividend of $0.05 per share, fully franked. Fairfax is expecting to report Group operating EBITDA of $272–275m which is in line with analysts’ consensus, and to declare a second half dividend of $0.018 per share (franked at $0.0083 per share). In both cases, these declared dividends will not be affected by the Proposed Transaction.

Scheme Implementation Agreement (SIA)

Fairfax and Nine have entered into the attached SIA, which contains the customary terms and conditions on which Fairfax and Nine will now implement the merger. The SIA includes a number of customary clauses, and is subject to conditions precedent including Fairfax Shareholder approval, court approval and no regulatory intervention.

Timetable and next steps

Fairfax shareholders do not need to take any action in relation to the Proposed Transaction at this stage. A Scheme Booklet containing information in relation to the Proposed Transaction, reasons for the Fairfax Directors’ recommendation, an Independent Expert’s Report and details of the Scheme will be sent to shareholders in the coming weeks.

It is anticipated that the Proposed Transaction will complete before the end of this calendar year.

Nine is being advised by Jefferies as financial adviser, and Ashurst as legal counsel.

Fairfax is being advised by Macquarie Capital as financial adviser, and King & Wood Mallesons as legal counsel.

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Media disruption

Crikey: Warren Buffet ‘abandons’ newspapers

Newspaper supporters have, over recent years, pointed to Warren Buffet and his investment in newspapers to support their view that newspapers have a future. This, yesterday, from Crikey:

How Warren Buffett abandoned newspapers. Rather than sell or close his 70 or so weakening newspapers now clustered in BH Media, CEO Warren Buffett has decided to outsource the management of 30 daily papers to a rival print group in middle America. The deal shows he’s all but abandoned newspapers. Under the deal, Lee Enterprises, an Iowa-based regional newspaper group, will manage BH Media’s 30 dailies for the next five years for a fee of US$50 million. Lee owns 46 dailies and more than 300 other publications. BH Media’s print circulation has dropped about 15% since 2015. It has struggled to build digital subscriptions and advertising as audiences have shifted from print to online.

Buffett told CNBC earlier this year that be believes only two newspapers, The New York Times and the Wall Street Journal, are assured to survive the current climate, because people will pay for them online.

The 15% circulation decline mentioned in this piece is less than the decline achieved by many Australian capital city newspapers in the same period.

We need to run our businesses to not rely on newspaper traffic whatsoever.

While I do not want newspaper sales to decline or daily newspapers to close, the former continues apace and thew latter will happen. The only reasonable topic of discussion is when. This is why every newsagent needs to fortify their business to ensure it can withstand the decline in shopper traffic following the closure of a daily newspaper or more.

The way we do this is by attracting new traffic. This can be done anywhere. While it is hard work, it can be done.

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Media disruption

News Corp. shows the future of news access is digital

Check out the ink and paper being invested in in the Cairns Post promoting the digital news delivery channel, as seen Tuesday this week.

On the front page…

Pages 10 and 11…

In the sports pages…

For the record, the publisher is doing what I would do if I were them. The circulation level for the paper along with a drop in ad revenue and increased production and distribution costs mean the question of closure of print is a discussion of timing only.

Newsagents need to be running businesses that do not rely whatsoever on newspaper customers and revenue for success.

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Media disruption

A Twitter wedding

Twitter is leveraging the royal wedding to show off its platform not only for serving individual tweets but bringing together coverage for what is an international event. What they will be doing later today shows how far this platform has come and, through this, challenge the relevance of newspapers for reporting news, which is usually old news.

The image is in a pitch I received from Twitter by e mail as well as in my Twitter feed.

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Media disruption

UK newspaper circulation results reflect the challenge for the print medium for news

The latest UK newspaper circulation results released by the Audit Bureau and detailed by the Press Gazette reflect challenges for the news print medium we see in Australia. Over the counter sales continue to decline, as does newspaper shopper foot traffic.

Newsagents have to run their businesses to not rely on newspaper traffic. By all means sell papers and promote them when relevant, but do not rely on them at the core of your business. Those days are gone. Newspapers as not a viable, anticipated, daily purchase.

Regulars here will not read this as new information. Indeed, it has been the trend for more than ten years. Early adopters have businesses that have no reliance whatsoever on newspapers, as it should be.

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Media disruption

Pitching the alternate newspaper distribution union model

Check out this as in the NT News, which I saw when I was in Darwin recently.

It is not a new pitch. I first saw something similar years ago. I am surprised, however, ad the full page pitch – and the price. It is high by overseas standards.

Here are the details of the offer.

With print ad revenue collapsing and print production and distribution costs, publishers will only support print for so long. Hence, the need to develop alternate distribution channels.

There is nothing new here. However, there will be newsagents who are shocked when their capital city daily newspaper ceases daily production. Plans for business success in that situation should be well advanced and reflect cited in the business model today.

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Media disruption

Phillipines’ leading magazine published exits print

Check out the story by Mediaweek yesterday about this stunning move from print to digital:

Dramatic move by Philippines’ leading magazine publisher in transition to digital

The Philippines’ leading magazine publisher, Summit Media – which launched its first magazine in June 1995 – will no longer publish print editions of its magazines, which include Cosmopolitan, FHM, Preview, Top Gear, Town & Country, and Yes!

The company said, “This month, Summit Media completes its full digital transformation. The 450-strong company can now be called digital first as it bids farewell to its magazine past, closing the six remaining print editions of brands already thriving online as Cosmo.ph, Preview.ph, Pep.ph, Topgear.com.ph, FHM.com.ph, and Townandcountry.ph.”

Summit Media president Lisa Gokongwei-Cheng commented: “As we embark on our new journey towards a wholly digital future, we look back at the values that made us successful, and one thing that stands out is our respect for our audiences. Our brands, each with its own strong voice and well-defined identity, have resonated with our audiences because they stand for something, which is why for 23 years Summit published the most successful and well-loved magazines in the country’s history.

“Today, we embrace the way our highly connected audiences now prefer to consume content. As we follow them from print to digital, we will continue our relentless pursuit and delivery of quality, up-to-the-minute content and a dynamic and engaging editorial experience, this time aided by data, which now pervades and informs many of our editorial decisions.

“In the past three years, Summit Media has become the leading creator of digital native advertising content in the country, generating more volume than all our competitors combined. On top of this transformation, the company’s other pillars – out-of-home (OOH) media, book publishing, and content marketing – remain robust.”

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magazines

Strong digital subs growth for Fairfax

Fairfax this week reported strong growth in digital subscriptions.

In the six months to December 31, The Australian Financial Review, The Sydney Morning Herald and The Age grew their total paid digital subscriber base by close to 50,000, the strongest half in four years, taking total subscribers across Fairfax’s three major titles to more than 283,000. Digital subscription revenue rose 11 per cent in the first half in the metro business.

This is an excellent result for the company, even considering the cost of obtaining and maintaining digital subs. It is a base and it reflects migration from print to digital.

Whereas print newspapers are primarily an advertising delivery medium, digital news platforms have the opportunity to be primarily news and analysis delivery platforms, driven by demonstrated reader interest.

The Fairfax boss said the company has been able to use data to better understand exactly what readers want and give it to them in ways media businesses have traditionally not been able to.

“This feeds into subscriptions. If more of your revenues are dependent upon subscriptions and less on advertising, clearly, you’re going to be saying ‘well, what do our subscribers want?’ So the focus becomes on your core audience rather than a mass audience. This all evolves, we’re always part of an endless learning process.”

Newsagents with business models that rely on print need to read the details of the Fairfax results and contemplate the results in the context of their own businesses. There is much to consider here if your business is reliant on print related revenue.

The live question is with such growth in digital subscriptions and continued declines in print, when?

Note: in case the article is now behind a paywall, click here.

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Media disruption

The New York Times offers augmented reality experience

The New York Times has launched an augmented reality offer. They explain the benefits:

Integrating augmented reality into our work expands New York Times journalism in a few important ways.

First, by using your smartphone as a “window,” we are extending stories beyond the inches of a screen, by digitally adding objects into your space at real scale. And those objects — a border wall or a work of art — can have provocative explanatory value, because you can get close to them.

This technology also allows us to explore the evolving nature of how we share ideas and tell stories. Next week, The Times will debut AR in an article about the Winter Olympics. Just like with the honor box, your phone will allow you to see the athletes three-dimensionally, from different angles. This is all part of our effort to lean toward the future of storytelling. We invite our readers to come along.

This is a smart move as it leverages handheld technology to enhance the news engagement experience. Innovation like this is vital for publishers for the future.

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Media disruption

Newsagents need to be prepared for the day daily newspapers close print editions

Regardless of the spin from newspaper publishers, we are approaching the day when capital city and major regional daily newspapers will cease to be published daily.

As the largest single channel retailing print newspapers in Australia, small business newsagents need to be prepared for this, we need to ensure, today, that our businesses can sustain such a move.

This will happen. Daily newspapers will close. The decline in sales is driving it. The decline in advertising revenue makes it unavoidable.

The print model for news has run its race. The costs of printing the product and distributing it to shops and homes is too high.

I appreciate plenty in the newsagency channel will disagree with me or will hope I am wrong. The thing is, there is now downside in business planning on the basis of me being right. This business planning would / should focus on making the business attractive for people who do not visit today and on how to attract those people to the business.

New business and new traffic are key to success in 2018 as fewer people will walk through your front door for traditional newsagency products. So, we need non traditional newsagency products, promoted outside the business, to attract new shoppers.

Acting now, hopefully, long before now, gives you the best opportunity for successful trading through what I think will be a very disruptive couple of years, far more disruptive than the last ten years combined. In disruption we can find opportunity.

However, my call is that you do not wait for a daily newspaper to close. Act now. Rely less, today, on newspaper traffic.

Acting now looks like this:

  1. Placing newspapers in a lower cost location, away from the entrance and high value real-estate.
  2. Sourcing new product categories that you do not carry today.
  3. Pitching the new categories in marketing outside the business.
  4. Getting the business known as a destination for multiple sought-after categories in your area, categories people would drive at least an hour to shop and purchase.
  5. Spending less time on what is declining and more time on what could be.
  6. Doing everything possible to ensure your business does not look traditional.

I appreciate that no one involved with the newsagency channel wants newspapers to close. However, it will happen. The test is whether you have, by then, created a business that will flourish without daily newspaper traffic.

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Media disruption
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