Predicting the future of the newspaper industry.
By Jack Peat, Editor of The London Economic
One day we will tell future generations that news used to be distributed on paper sheets.
Make no mistake, digital technologies will have as big an impact on the way news is dispersed as the printing press did at the start of the second millennium. As we move into the third millennium, change is the only constant and we are presented with new capabilities daily, suggesting the digital revolution hasn’t happened; it’s happening.
Guardian News and Media is one of many daily nationals to report a sharp drop in losses thanks to a significant boost in digital revenue for the year to the end of March 2013. Online income for the Guardian and Observer publisher was said to be up 28.9 per cent to £55.9 million and exceeded the decline in print revenue, going from £37 million in 2010/11 to £56 million in 2012/13.
Guardian Media Group chief executive Andrew Miller said: “The financial impact of our digital-first strategy, launched two years ago, is clearly demonstrated in our performance in 2012/13.
“A sharp increase in the contribution of our digital operations to revenue was a striking feature, enabling a modest increase in overall group revenues. Having committed to digital earlier than our peers, we are now reaping the benefits.”
The most exciting aspect of the digital revolution – from a monetary perspective – isn’t showcased by the pop-up ads and banners seen on the web versions of print newspapers. Advertising is driving web-based news revenue, but it is the tip of the iceberg in terms of online capabilities. What’s more, digital is an all-encompassing term which has ramifications for news far beyond display advertising. Mobile and social comes under the ‘digital’ umbrella, both of which have already started revolutionise news, and will continue to change how news distributors view their digital arms.
Let’s go digital
Let’s rethink what we mean by “digital technologies” and “digital revenue”. The Guardian results are based on display advertising and sponsorship, which rose from £18 million to £25 million, and subscriptions, e-commerce and other digital revenue, which was up from £13 million to £15 million. But most of the aforementioned income streams have either passed their sell by date or have serious limitations in terms of revenue growth.
Go online and you are presented with choice. If you are asked to pay for a news item on Simon Cowell’s new baby or the latest CBI survey, a simple Google search or even a change to your cookie settings will bring you the same news item for free. For that reason, online revenue is understandably limited.
Digital, however, is an all-encompassing term with a far larger scope than the web. Research suggests consumers are far more happy to pay for products if they can be used on a mobile device. Like buying a book on a Kindle or an app on an iPad, newspapers must find a way to embrace mobile capabilities rather than simply replicating print online.
What does the future hold
The London Economic is moving into the digital space with a fresh perspective. We are not evolving, but starting from scratch with an appetite for change. It is our belief that the confines of columned news is obsolete compared to mobile screens which can support a range of multimedia with social capabilities. Crucially, news of the future isn’t news of today replicated on new devices; it is something completely new.
You think, we read
News is traditionally written in a pyramid style, with the essential items at the top dispersing more knowledge and insight as you move down the page. This traditional paradigm is likely to be significantly altered, given that people read web or mobile-based content in different ways to print.
Contemporary digital news must be quick and digestible. Readers will have two things on their mind when news breaks; What happened, and what does it mean? It will be up to digital platforms to answer those questions succinctly, and provide editorial afterthought which is more leisurely than fast-paced breaking news.
No prizes for coming second
In an age of social media, there are no prizes for coming second. Viral can be the difference between a minute or two, and having the knowhow and prudence to break news as and when it happens will invariably impact results. Social media is the biggest distribution channel in the world but relies on getting there first in order to succeed.
We as consumers unconsciously read news with an agenda. Behind every newspaper story is an editorial slant, a political input or a corporate message, but that could easily be changed. As long as news is distributed through institutions such as newspapers or national broadcasters governing the news has never been a problem. But as Wikileaks and various other whistleblowing organisations have show, the internet is beyond the grasp of power groups, which could usher in an age of news without an agenda.
Supporting new industries
London is growing into the tech capital of Europe and competing on a global stage in producing some of the most innovative entrepreneurs out there. American-born entrepreneur Julie Meyer recently Tweeted her support for The London Economic, saying “we need a fantastic newspaper that covers the tech epicentre like the San Jose Mercury does”, and who better to project digital hype than a digital newspaper?
Protecting the earth
There is a sustainability case to be made on behalf of digital newspapers. The environmental cost of printing daily newspapers is huge, not to mention the toll it has on urban landscapes which become littered with print copy. One day the letter box will be obsolete and newspaper stands will bare little more than tourist souvenirs, and when we reach that point, the world will look far better for it.
There is a three-pronged approach to making money as a media outlet. Advertising and advertorials make up the lion’s share of the revenue stream, supported by subscription or newsstand revenue and ancillary takings such as recruitment services or ecommerce. As mobile becomes more dominant, we expect revenue from subscriptions to overtake advertising revenue, and ancillary revenue to grow as more channels are supported.
Digital newspapers are the future, but not from an evolutionary standpoint. Daily nationals have all adopted digital packages by replicating print news online, but digital platforms operate under an entirely different paradigm. The way we write, the way we sell and the things we support are to be radically altered by digital capabilities, suggesting that New Age news isn’t a re-think, but a revolution.