Is Traditional Publishing on its way out?

• What direction is Traditional News Media going?
  
• Recent Developments of Leading Publishing Companies
• The Future of Online News Media
• New York Times  & Financial Times Online Strategies

Now that the web offers nearly infinite ad space, display advertising has become a commodity and newspapers find it difficult to compete with ad networks that specialize in more efficient, targeted advertising packages across multiple platforms.

With the increase of different online search applications, we see more people turning to online resources to find instant real time information. Consumers now use several different media sources when searching for information on the web. Where does this leave traditional publishing companies?

According to Mashable, last year ad spending on newspapers was down 9.7% (magazines were down as well), while Internet ad spending had increased 7.5%, as did TV (up 10.5%) and radio ads (up 6%). The future doesn’t look any better for print, with Internet revenue set to overtake newspapers by 2014 or possibly sooner.

With new improved devices such as the iPad, smartphones, laptops and netbooks , there is no doubt that younger generations are more tech  savvy and increasingly mobile.

The convenience of digital  distribution means that many consumers no longer need or want newspapers or other  forms of print media.

With mounting print and distribution costs and the loss of classified advertising  revenue to websites like eBay, Craigslist and Google, traditional media is losing ground.

According to Mashable, in the States alone, Newspaper revenue fell by 28% in the first three quarters of 2009, after declines of 17.7% in 2008 and 9.4% in 2007.

As the number of subscribers dwindled, so did the value of print ads on a per-ad basis. Weekly news magazines suffered to a lesser extent; between 2002 and 2009, Newsweek lost 25% and Time lost 18% of its subscribers, while U.S. News & World Report closed its print edition and moved its operations fully to the web.

Recent Developments of Leading Publishing Companies.

As print media revenues continue to dwindle traditional media companies are beginning to look at partnering with Internet marketing companies in order to move into the online marketplace.

McClatchy

The McClatchy Company is the third largest newspaper company in the United States, with 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local websites in each of its markets which extends its audience reach. These websites offer users comprehensive news and information, advertising, e-commerce and other services.

The McClatchy Company has recently been offering WebVisible’s online marketing solution to local businesses in several markets, including Kansas City, Mo., Tacoma, Wash., and Fresno, Calif.

The program has been so successful  (advertising sales in March were roughly five times higher than the previous month) that McClatchy and WebVisible are planning to add new markets every month through the end of the year.

The move gives McClatchy’s local advertisers the most efficient way to get found by customers no matter how they’re looking — in newspaper listings, newspaper web sites or search engines, or via mobile phones or navigation devices.

Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high-growth markets. By using Web Visible the McClatchy Company is embracing the shift in advertising from traditional publishing to online media platforms.

Gannett Local

Gannett has recently become the latest to hop on this seismic shift in advertising trends.  The USA’s number one publisher recently opened GannettLocal, a small business marketing division based in Phoenix.

They will be selling online marketing services to small/local businesses and those services include SEO and local search marketing

GannettLocal chief Brad Robertson: “GannettLocal is a new business model focused on working with small and medium sized business to provide them a high-touch marketing consultation and a suite of multiplatform solutions (search engine marketing, e-mail, digital display, website, and geo-targeted print/flyers) delivered by a team of dedicated experts over the phone.”

The Future of Online News Media.

It seems the only way for news publishers to survive is by investing resources into innovation online. However, many newspapers while moving to the online marketplace cannot ignore the fact that their audience expects to read their news for free.

Experiments and testing has started in terms of looking at the behaviors of news consumption with digital and interactive forms of storytelling. More importantly, business models are needed that will help generate revenue while still keeping regular traffic flowing to these news sites.

The advice of Financial Times editor, Lionel Barber is;  “figuring out what is special, distinctive and original about a news organisation’s content and focusing on that in terms of charging.”

Many people believe that these companies may need to come up with new methods of advertising on their sites as the online marketplace is also being squeezed. If they don’t act soon, the future could look bleak for many of these news publishers.

What to do?

Some news media websites have tried using Paywalls in the past to charge people for reading their content, but these rarely worked and in many cases have lead to a huge decrease in online traffic to various news media sites. The simple fact is, if people need to find out information on the web they will go somewhere else and find it for free.

In January 2011, The New York Times will go behind a paywall. However it’s not a complete paywall, it more like a regulator for allowing only a certain amount of articles to be read for free during a given time period.

This regulated paywall is currently being used by the Financial Times and is described as a “metered system”, whereby visitors are limited to five articles per day before being prompted to pay for further access.

Whilst other publications fiddle with adapting their business models to mirror that of the Financial Times, it must be remembered that FT occupies a unique position in the market, enjoying the majority of its circulation amongst businesses as opposed to individuals.

It’s unlikely that The New York Times will remain one of the most-linked-to news sources on blogs or other social media platforms in 2011 if a paywall is in place.

The big question remains to be answered – Would you pay to see news articles from your favorite news sites?

What online news sites would you pay for? What ones would you not?

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