If velocity is distance over time, the iPad is moving fast. Ipsos Mendelsohn, a research group that studies media habits among affluent Americans, reports that newspaper and magazine use is down 16% from 2009 to 2010 among households earning more than $100,000. (Note: Use means time spent reading, not number of issues delivered to the home.) Mendelsohn’s survey of 13,804 affluent individuals found their Internet use jumped from 22.6 to 25.3 hours a week in the 12-month period. Those $100k households represent one-fifth of the U.S. population, and are one of the sweetest targets for advertisers. With so many eyeballs skipping away from old print, marketers will see declining results if they don’t put mobile and display media in their plans.
Mendelsohn’s president Bob Shullman told ClickZ, “Right now about 98% of the affluents are online — compared with 70% of the rest of the population — and they have lots and lots of digital devices.”
As for the iPad itself, Apple’s tablet is attracting affluent younger users. Nielsen has found those willing to drop $499 on a new technology gadget skew male (65%), younger than age 35 (63%), and relatively affluent (50% of the individuals earn more than $75,000 a year). This contrasts to only 30% of all mobile subscribers making more than $75,000 a year — indicating Apple is locking in the future affluents with its tablet devices.
If you target upscale customers, it’s time to rethink the media plan.
Newsday is the United States’ eighth-largest newspaper, so when it set up a “pay wall” at its web site in November, media circles buzzed. Could Newsday prove that forcing people to pay to read online newspaper content is a viable business model? Could Newsday, an example of a large local paper with a lock on a region’s news, use its unique editorial to build subscriptions online?
Early indications are — nope. Quantcast data shows monthly U.S. traffic, which had hovered for years in the 1.3 to 2.5 million person range, suddenly fell off a cliff to just over 600,000 individual people. Newsday may be hamstrung by the fact its web site is incredibly confusing to navigate for nonsubscribers — quick, click to Newsday.com and try to determine in 5 seconds how to sign up. But this failing experiment can’t make print publishers happy as they reconsider making readers pay for online content. The buzz is new tablet devices may give subscriptions a boost. Be careful, publishers. The long tail of substitutes is just a click away.
Here’s an idea: Take the dying, shrinking newspaper and move it in the opposite direction. Bigger. Bolder. Better.
The creative minds behind McSweeney’s are publishing a vision of what newspapers could be — a stunning 380 pages of original content, including an enormous 112-page broadsheet 15 inches by 22 inches, a magazine, books section, and — take that, AP newswire — a 32-page news section filled with local reporting. Titled the San Francisco Panorama, it launches in early December with contributions from 150 writers, artists and photographers. (Preview the sweetness here.)
How could the market possibly support such a huge endeavor? Why, once a year, if that. The editors suggest this is a one-shot deal. “We think that the best chance for newspapers’ survival is to do what the internet can’t: namely, use and explore the large-paper format as thoroughly as possible. To that end, we opted for a huge and luxurious broadsheet … and then unleashed artists and designers to show exactly how much the format can do.” Given the book-like effort, the pub will go on sale at bookstores around the country beyond the local San Francisco market.
All we can say is, wow. They even brought back the comic strip in its full-page, complexly plotted, type-font-you-can-read glory. And yes, it will include ads. It’s a newspaper we might actually pay for. It makes us miss what newsprint used to be.
Via Mark Wanczak.
Yesterday the Newspaper Association of America released the worst news yet for U.S. publishers: Q2 newspaper ad sales were off $2.8 billion from the year prior, and ad revenue for the first six months of 2009 crashed 29 percent. Analyst Ken Doctor of Outsell believes only half this decline can be blamed on recession, and the reduced spending level is part of a permanent reset as marketers move budgets to the web.
It’s worth pausing to consider the cause-and-effect behind this trend: marketers spend ad budgets chasing results; fewer dollars flowing to newsprint mean results there are scarce; scarcity of results means consumers are reading less in newspapers, and even when they do they are less likely to respond to the ad. We still recommend newspapers in media plans for some demos, but the importance of measuring results with hard data feeds is now greater than ever. The old days of popping ads into newspapers with no tracking are now a wrap.
The Associated Press and Rupert Murdoch have been making rumblings about charging for internet use of their content (technically, AP is cracking down on users repurposing its reports, while Murdoch will build pay walls around some of the content on his news sites). Economist Jodi Beggs explains why this won’t work. Demand curves slope from upper left to lower right, silly. You can’t raise prices without reducing demand, especially when 100 million competing sites give away news and entertainment for free.
Dirk Singer, head of the London PR shop Cow, believes attention to advertising across the board — not just newspaper readership — is what is declining, and as consumers shift media habits online ironically television networks may come out the winner. Dirk writes:
So the elephant in the room is that if we are talking about the age of news brands, we are not just talking about newspapers. It’s easy enough for the rest of us to migrate to the online services of TV news networks (and A List blogs which are no longer blogs in the 2004 sense) – TV news channels (mostly) not being in the business of charging to watch content anyway. Indeed, they’d probably welcome the opportunity to get a bigger slice of the online pie.
Good point. Newspapers and blogs and television newscasts are all starting to look the same. Blogger Robert Scoble’s posts are filled with video. The New York Times’ site has a news video section. FoxNews.com is filled with articles and columns. If it’s all the same, what matters next is who can fund the content.
When your product is free, you need money from somewhere else
TV remains the cash king. The average U.S. consumer watches 5 hours and 9 minutes of live TV a day, taking in just over 1 hour of paid sponsorships. This in turn gives broadcast and cable TV about $75 billion in advertising in the U.S. — a lot of money to cross subsidize online free content. The irony of our intellectual user-generated-content age is that passive couch potatoes may fund the revolution.
Photo: Rock Creek
All newspapers are struggling to find the right new pricing model as readers flock to the internet, where ad revenue is far less than that of print editions. Now the craziest idea appears from The Newport Daily News of Rhode Island. The Daily News has announced it will charge $145 a year for a print subscription, $245 a year if you want both print and access to their web site, and $345 a year if you want just the web site.
Um. That’s right. You pay a $100 penalty if you want to read Newport news only on the web. Jim Brady, former executive editor of the WashingtonPost.com, says the model reeks of desperation:
“Newport’s strategy suggests it believes it can drive people away from its own web site and back to the newspaper. And maybe it can — for a few years. But as future generations continue to abandon print, this strategy will reveal itself to be short-sighted. By penalizing people who only want to use the paper’s web site, the Daily News is likely guaranteeing itself future irrelevancy.”
We respect the challenge, because even the big boys are in trouble. Back in January Michael Hirschorn wrote in The Atlantic that The New York Times, $1 billion in debt with only $46 million in cash reserves, still had no pricing strategy to deal with consumers rushing online. About 1 million people read the Times print edition each day vs. 20 million online — yet the print version generates the lion’s share of revenues, and if the paper stuff were shut down, web revenue would support only 20% of the current Times staff. NYT has toyed with charging online subscriptions to backfill the holes in online revenue, but keeps backing away, fearful that its web readers might do the same.
Good luck, Newport. But rest assured, we won’t be reading you online.
Sad but true. Via Matt Mansour.
The bad news for newspapers keeps coming. Thousands of observers have now become “death of newspaper bloggers,” but it’s obvious that the proliferation of desktop computers, laptops, and cell phones have made sheets of smudgy-inked paper obsolete. Dirk Singer, our PR friend over in London, has perhaps the simplest explanation of why papers are in trouble — readers have moved online, advertising dollars have not followed, and for every paper that tries to charge readers for content online, there are 10 others that won’t.
However, journalism will obviously survive. Blogs, including this one, can’t make up for dedicated, real reporting. Someone has to interview people, wade through documents, and see what’s really going on.
The second problem with newspapers failing is the potential absence of editors who help select news stories they think you should read. Admit it. If you didn’t have an editor at The New York Times telling you about starving people in Africa, you’d certainly never search for it.
The economics are changing, and huge printing presses and the associated costs with chopping down forests will have to go away. Perhaps there have always been too many journalists — one reason why the starting salary for editorial assistants is often below $20k in the U.S., because dozens of people have always clamored for every single job.
The job market will shrink. The papers will move online. There will be fewer advertising dollars. It’s all inevitable. But the role of real journalists, and real editors who help pick the stories you need to see, will always be around. The only ray of light we see is the tightening market may actually improve journalistic quality, as the best of the best fight to remain, sharing via dedicated expertise what happened in the world today.
Wired and “freemium” guru Chris Anderson had dinner recently with Jon Lund, chief of the Danish Internet Advertising Bureau, and learned about a free business model gone sour. It seems in fall of 2006 a new newspaper called Nyhedsavisen entered the Danish market with a “double-free” model — the paper cost nothing, and it would also be delivered to homes for free. It was a foray by the Icelandic media group Dagsbrun to capture the Danish ad market but ended up decimating the nation’s newspaper industry, as other publishers tried to match the double-free model. In the end, three papers went bankrupt and the industry lost $150 million.
What’s intriguing about the tale is how demand plummets when oversupply swamps consumers, even if the goods are free. Local accounts say Danes got fed up with six newspapers a day. Reminds us a bit of all the social media and mobile free apps competing for attention in the U.S. … or worse, the advertisers trying to buy their way into social media conversations with paid posts that no one welcomes. If supply saturates and prices can’t move lower than free, demand is going to run away.