Reinventing Print Media
Among its other effects, the global recession is catalyzing a permanent change in the media landscape. After years of gradual audience erosion, the pressure on newspapers and magazines has accelerated. Severe cutbacks in conventional advertising — even when subscriptions or newsstand sales are robust — are slicing deeply into publishers’ revenues and shredding profitability. And it has affected print more than any other medium. Print players have faced other cyclical downturns in which their businesses declined faster than other ad- supported media. But few print media companies can afford this time to simply batten down the hatches and ride out the current storm. The two major forces that are washing away the profitability of print media were at work long before the current recession.
The first force is the ongoing shift in where marketers focus their spending. Marketers have accelerated shifts in spending away from paid advertising to other priorities — including their own Web sites, in-store marketing, loyalty programs, and word-of-mouth campaigns — and they aren’t likely to switch back.
The second long-term trend devastating print profitability is the rise of digital media. Print has been hardest hit by this shift, since print ad pages are priced at a significant premium over other kinds of advertising, and marketers have been slower to cut broadcast and cable TV ad spending because of the value they place on sight, sound, and motion for brand campaigns.
Hope on the Horizon
To anyone who cares about newspapers and magazines — their publishers, their readers, their employees, the marketers who advertise in them, and those who recognize the value of journalism to a vibrant society — the situation seems dire and unsolvable.
But there is a way forward for print media companies that can help them adapt their business models to succeed in the new digital marketing environment.
The first strategy is to develop deeper relationships with readers around targeted interest areas. This builds on a strength that has always been at the heart of publishing: Strong print brands enjoy a trusted relationship with their audience; readers are loyal to print publications because they provide high-quality content about specific interest areas. Digital media afford opportunities to deepen and extend those relationships.
The second strategy is to tap into revenue streams beyond advertising and circulation. New publishing models will include marketing services such as custom content, consumer insights, and lead generation, and new offerings for customers such as premium content and data-based applications.
The third strategy is to reinvent the content delivery model (with a particular focus on lowering costs) and to emphasize a “profitable core” of unique and brand-defining material. Print media companies need to avoid the formula-driven approaches to cost cutting that have been prevalent so far, and instead adopt approaches that better align their cost of content with the revenues generated.
The fourth success strategy for the media company of the future is to innovate with new products and pricing models. As the pace of change continues to quicken in the digital world, as new devices for accessing printed content continue to emerge, and as new applications are developed to exploit online content, this will lead to as-yet-untapped opportunities for media companies.
We believe that companies that pursue these four strategies can have an attractive future if they make the most of these new opportunities while building on their traditional strengths.