More than a few people in the print media industry failed to see the winds of change as they approached. Much quicker than expected, digital media became the preferred source of information and the norm for the millennial generation and the highly educated and tech-savvy.
Those who were too distracted or arrogant to acknowledge the inevitability of this change were left jobless and desperately seeking new careers.
A select handful of visionary companies were able to prepare for and beat the tidal wave that threatened to run them to the ground. By diversifying and intertwining their print media platforms with a digital presence, these media outlets managed to retain their readership online and still entice people to pick up a physical copy.
These are the companies that are now leaders in the media sector. It is now clear that the way to stay ahead of rivals rests solidly on a clear embrace of digital ideals, with a view to promote the print format and to acknowledge the need to move with the times, rather than be left behind.
EVP – group trading and commercial managing director at Publicis Media Middle East, Amer El Hajj, says: “It is about time we adapt to the new era of single-digit growth in the media industry and acknowledge that poor-performing media will close their doors. But that doesn’t mean that well-established and great-performing publishing houses will surrender to this situation in the near future.”
The gap between print media and digital formats has become blurred. A good example of this is the fact that in 2013, Amazon CEO Jeff Bezos opted to buy The Washington Post.
Bezos was approached to buy the flailing newspaper by the Post’s former chairman, Don Graham, who sought to convince the industry-disruptive billionaire to take on the challenge. Graham’s reasoning was driven by the fact that Bezos had no experience of the news industry that could prejudice or bias the move into digital. His online pedigree earmarked him as the perfect candidate to lead The Washington Post forward.
As Bezos described it: “Don thought that because the newspaper business is being so disrupted by the Internet, someone who had a lot of Internet knowledge and technology knowledge could actually be helpful.”
Whilst Bezos started work back in 2013, it wasn’t until last year that his influence and determination to usher in a new era started to bear fruit. After a turbulent couple of years, 2017 is expected to be a year of profitability and growth, according to their CEO, Fred Ryan.
EMBRACING NEW TECHNOLOGIES
In a memo released to staff towards the end of 2016, Ryan hailed the performance of his team to elevate The Washington Post from stuttering to profit-making in just three years. “In addition to reinforcing our belief that there is a viable business model in quality journalism, this will provide additional funding for several new initiatives that build upon the successes of this year,” the memo read.
Methods to turn the sinking ship around included offering free subscriptions to readers who had subscribed to local newspapers, namely the Dallas Morning News, the Honolulu Star-Advertiser and the Minneapolis Star-Tribune.
Such impressive tie-ins have allowed The Washington Post to embark on a recruitment drive of 60 new staff, according to media reports.
One way for print media to make a turn in profit is to optimize their actual printing costs, which has been one of the ways that Rupert Murdoch’s Times newspaper has utilized to deliver an increase in profits, according to a report by The Financial Times.
This ‘substantial’ increase in profits was also enabled by a serious decrease in their editorial and marketing budgets, allowing for a profit of £21 million in the last recorded financial year, 2014/15. This impressive news came following recorded losses for every single year since 2002, aside from a £1.7 million profit the year before.
The Times has been one of the few newspapers in the UK to increase its print circulation, which many economists and business insiders heavily speculate is due to the paper’s paywall system, which prevents users from accessing articles online unless they subscribe, as opposed to other media such as The Guardian, which have succumbed to serious losses in recent years, as per The Financial Times’ report.
This method of discouraging readers from receiving articles for free could cut both ways, however. While it could turn readers towards other sources of news that they can access for free, it could also create such a stable demand of those who still wish to see high-quality content that they will, in fact, be happy to pay to access it. Those behind the initiation at the Times’ headquarters will be delighted that it appears their risk is paying off.
The head of sales, MENA region, at InSkin Media, Toby Daniell, says: “Globally, publishers are grappling with the challenge of how to respond to declining print circulation and reduced ad spend, with varying degrees of success. Of note is the success of DMG Media in the UK, whose £20 million (AED89 million) increase in Mail Online’s revenues offset an £18 million (AED80.1 million) decline in print advertising.”
“This example shows that not only is it possible for publishers to avoid financial loss, they can even increase their ad revenues by embracing the digital sector,” he adds.
MAGAZINES LOOKING UP
Surviving as a largely print media company is not the sole reserve of newspapers who are looking to conserve their dynasties, of course. Numerous magazines have been fighting the same issues over the past couple of decades, thanks to the advent of digital journalism. In terms of wide appeal, the variance of opinions and consistent growth of new content, rivaling Internet-based media is no easy task. The Economist, for example, posted profits of £61 million in 2016, after severing ties with the publishing company Pearson and also by introducing so-called “premium packages” of subscriptions to both print and digital content, as reported in The Guardian in July 2016.
ARE SUBSCRIPTIONS HERE TO STAY?
The chairman of the Economist Group, Rupert Pennant-Rea, said that, following the 2009 peak of print advertising revenue, “this means we are now well over halfway through the decline in print advertising that has hammered all ‘traditional’ media companies and we have made considerable progress in filling the gap.”
Despite this decline in advertising, the group is intent on delivering a different method of increasing readership and has shown that a willingness to break with tradition can leave print media companies still posting big profits.
“Globally, newspapers and magazines have figured out alternative solutions for their revenues; they imposed digital (edition) subscriptions on their readers to sign up for full access. From this subscription, they can make up the shortfall from ad [revenues],” adds Hajj of Publicis Media.
Other companies have improved their print subscription to use their database as a distribution network. Many firms have also branched out into other enterprises, such as in-house online live news TV stations. Magazines are more focused now on photoshoots and native editorial/advertorial, creating content together with advertisers.
Times have been tough for newspapers over the past ten years and the next ten may be even tougher. KPMG in its report Stop the presses: Newspapers are struggling, can an all-digital strategy be the path to profitability?, says: “Most say that print will exist in the future. But whether print can be a primary revenue stream for newspapers is coming into question.”
“Newspapers,” it adds, “will need to pivot and employ a fresh approach to the way they operate. Future business may be a significant departure from today’s models and, except for a few that offer premium content, almost every newspaper will need to go to a digital-only model.”