Media disruption

In Launceston yesterday I discovered from newsagents that Fairfax charges a Remote area publishing fee for The Age, the Melbourne newspaper, which is printed locally, in Launceston, for Tasmanian customers.

This seems like an odd charge to me. Fair enough if freight was involved but it’s not. It’s a fee for using a local printing facility. I would have thought that this benefited Fairfax.

My understanding is that the fee is one reason sales of The Age in Tasmania are down.

I’d like newsagents to share other charges they see from publishers for local printing of interstate papers or freight applied for shipping such papers in.

While not the same as is happening in Port Lincoln about which I wrote last week, it’s similar in that publishers are recouping more costs now their products are not as popular.

Nowhere are the changes in the news distribution model more apparent than in The Times in the UK today.

Across a two-page spread the publisher makes the case for migrating consumers from print to digital. Today’s ad is not the first.

Central to the pitch is that it is about much more than news. It’s about belonging to a club with exclusive benefits and having access to the content you want updated live without the need to wait for the old delivery method to catch up.

Newsagents who wonder about the future of print ought to look at this ad carefully. It is a newspaper publisher making a pitch that is directly competitive to all involved in print newspaper distribution and sales. This is the publisher investing in their future.

If you look at the membership benefits and how they are pitched, the news itself is secondary. What an extraordinary shift!

Newspaper publishers are trying similar offers in Australia but they do not feel as structured and clear in focus as is this offer from The Times.

We must run our newsagency businesses with zero reliance on print newspapers and make the most of them every day we have them.

Click on the image to see the ad in detail.

The Times here in the UK today has a double page ad promoting online over digital. The comparison table makes the case for the value in a £6 for the digital package versus a £10 spend for the print product. The irony is the use of the print product to push people from it.

Canadian publisher Transcontinental Inc announced earlier this week that they would close 20 newspapers.

In the wake of this announcement, Transcontinental Inc. is also announcing that it is reorganizing its weekly newspaper portfolio and effective today will stop publishing 20 of its titles, which for the most part will be integrated with other publications it holds in the same regions.

This is what happens when newspapers don’t make a profit from their product.

This offer in The Daily Telegraph is stunning: 12 weeks of Saturday and Sunday newspapers home delivered for $40 plus you get a $20 gift voucher, access to all News digital sites, foxsports.com.au access and +Rewards benefits program access.

It’s hard to see what the hero product here and the loss leader being used to support the hero. While I am no marketing expert it looks at first glance like a confused offer. However, knowing News I am sure that each item is in the package for good reason. The gift card is the lure, foxsports.com.au is the bait, digital access to News sites is the hero and the weekend delivery is there because the company has to have this as it transitions.

Given the production and distributor cost, I’d say the twenty four copies of home delivered weekend newspapers for $20.00 are the loss leader as many dads would like the Fox Sports access as well as digital access from their phones and devices for everyday news.

I don’t begrudge News making this offer, it’s what they need to do for their business. The ad is something newsagents need to consider as they themselves plan for their future.

With the pay wall for News Corp’s Perth Now online news removed last week I wonder if other News sites will follow or is this a WA specific move responding to two strong local and free sites. If it is the latter other competitors will see the move as News blinking.

I received another email from Fairfax offering a six month subscription at a discount of 50% off the usual digital access price. The biggest discount is for digital only access – that’s 50%. If you select the seven-day print and digital offer for six months the discount is only 20%.

Fairfax is pushing digital first. Is this because digital is their future? With their mastheads experiencing double-digit declines in sales in the latest audit, again, it’s no wonder they are so focussed on the lower distribution cost model of digital. It makes sense.

$7.50 a month for six months! If it wasn’t so easy to get free access to their stories I’d probably consider this offer.

Stop Press – The Last Days of Newspapers byRachel Buchannan is a compelling read by a respected journalist and historian. It’s a homage to Australian and New Zealand print newspapers and a call out for for future of journalism. Newsagents come in for a mention as a business channel affected by the declining sales of print newspapers. I recommend the book for those interested in the future of the print product.

A phenomenon in the latest newsagency sales benchmark study is the increase in newspaper revenue for many newsagency businesses where unit sales of newspapers declined. This speaks to the considerable increase in cover prices over what was being charged a year ago. If only newspaper publishers had acted on newspaper prices sooner – we’d have all been better off.

Digiday has published a fascinating report into the digital challenges being confronted by The New York Times. The graphs in the report show excellent growth in digital access while at the same time showing the high cost of serving the declining and unprofitable print consumer. It’s the biggest single challenge facing newspaper companies, the reason for so many changes at Fairfax and more to come.

The biggest single challenge publishers face is how to monetise traffic to their sites and individual stories. The reason this is a challenge is because they have looked at with experience in and from the perspective of selling display ads and classified ads in the print world. Monetisation of digital content needs a completely different .NET approach. A publisher who gets this and acts should do well. A traditional pay wall is not the answer.

If I was running a publishing business I’d be pursuing multiple models at once – including following the model that is working so well for in-game purchasing as people are happy to pay a small fee to get to the next step.  Let me buy a story for a few cents. Let me follow a story for a bit more.  However, with so much content available freely it is hard for a publisher to have a genuine exclusive like game makers have. I’d also be investing in a Twitter like platform for trusted news – people will want that with Twitter being filled more with junk content and advertising.

Look at the MH370 story. While I would not sign up to a masthead based on the story I’d have paid for 7, 14, or 30 days of trusted coverage on this story alone.

Publishers need to come up with new entry points to paying for content – beyond the masthead.

The decline in revenue for newspaper publishers continued as evidenced with the release of the latest data. The revenue challenge has more to do with ad revenue than circulation revenue whereas the cost challenge is more to do with distribution than editorial.

Smart publishers will realise that they could make more money setting their content free from mastheads. I am more likely to purchase news stories than I am to subscribe to a branded news outlet. I suspect that I am not alone.

Focussing on making money from your core competency is a better business plan in my view.