So, When Do Print Newspapers Disappear?

Philip M. Stone November 3, 2010 Follow on Twitter

When you run the Future Exploration Network think tank you’re expected to make some pretty fascinating future predictions, and the latest by Australian futurist Ross Dawson certainly hit the global headlines – that print newspapers in the US will cease within seven years, within nine years in Britain, and in 10 years in Canada and Norway.

Well, if that’s really the case then it’s actually an improvement, because back in 2008 at the World Economic Forum in Switzerland such futurists as Paul Saffo of Stanford and Peter Schwartz, chairman of Global Business Network, suggested that print newspapers will disappear by 2014, so newspapers must be doing something right if Dawson is now postponing their demise until at least 2017.

Of course, ever since the Internet and digital news services became such powerhouses we’ve heard numerous similar predictions about the end of print, so, no need to pay attention to Dawson, right? Hopefully, but a new American poll indicates there are a lot of Americans who think print newspapers will disappear within 10 years. They know something publishers won’t admit to?

The 24/7 Wall Street/Harris Poll of 2,095 US adults said that 81% believe the use of news in print will continue its decline and 55% said they think traditional media will disappear in 10 years. Already more than half of those questioned said they rely for digital delivery of their news fix, and for those aged between 18 – 34 two-thirds said they rely solely on digital.

More than 78% said there will always be a need for a newspaper, and 67% said they actually prefer to have news the traditional way – print and television -- but having said that 55% said traditional media as we know it today will disappear in 10 years, and 43% said the day of the printed newspaper is past. That is not good news!

In reality nothing newspapers have done except to cut their costs to the bone have helped print stay alive. Yes, some digital services are working but for most newspapers more than 80% of revenue still comes from print. The public loves newspaper web sites – according the Newspaper Association of America in September there were more than 100 million unique visitors to newspaper web sites – but how to get people to pay for what you gave away for so long?

There are various experiments out there with pay walls, and the hope is that mobile and tablet business will save the day – those users seem quite prepared to pay but probably not as much as publishers want them to pay – but the truth is digital business models are still in their infancy, and yet here the doomsayers are predicting there’s no longer than seven years for US printed newspapers.

Not that publishers never had the warning that their days of reckoning were approaching.  Back in 1996 at Columbia University Mike Slade, CEO of Starwave Corporation, made predictions that have come uncannily true. Remember this was the time when the Internet was just beginning to make itself felt and a good five years before anyone heard of Craigslist, and yet Slade predicted:

 “• Well over half of the content in a given daily edition will be a commodity content, such as feeds from The Associated Press and syndicated comics and columns; the other half the product of (give or take) 50 to 100 people with journalism degrees.

“• A relatively small percentage of a given metro area wil subscribe to a daily paper;

“• Newspapers rely on classified ads, which one day will be supplanted by free online classified ads.”  He sure got that one right!

His advice then: Build a defensible business model. The industry wasn’t listening and is now really paying the cost.

Remember back in 2006 when former GE boss Jack Welch and a syndicate said they would take the Boston Globe off The New York Times Company’s hands for around $550 million? The Times Company had bought the newspaper for $1.1 billion back in 1993 and since it was one of the first deals by the then new pup, Arthur Sulzberger, the offer to lose some $550 million wasn’t taken up, which raises that old saying these days that a bird in the hand is worth two in the bush. Why? There are stories in Boston that others now want to buy the newspaper and its valuation is put at anywhere between $80 million to $120 million. Welch, meanwhile,  must go to bed each night thanking God that he was turned down.

And if newspapers are having it tough what about their vendors. The Associated Press as recently as 2008 was earning some $220 million a year from US newspapers, but that figure is now down some 37% to about $140 million and expected to fall at least another $5 million a year for some time to come, according to an interview President Tom Curley gave to Poynter. Most astounding is that US newspapers now provide just 20% of AP’s total revenue – no wonder the company is continually announcing new projects on which to try and open new money streams.

Futurists, forecasters, and credit agencies  have little good to say about print these days but when the public itself says print is nice to have but not necessary, then that really hits home. Why should advertisers think any differently? Falling print circulation just makes the advertising sale that much harder, and lumping web readership with print readership doesn’t fool anyone. Savvy advertisers understand overlap and demand transparency. Without it they will continue to vote with their feet away from print, and a bad situation just gets that much more worse.

See also in ftm Knowledge...

Media Business Models Emerging

After a rough transition media business models are emerging. Challenges remain. There are Web models, mobile models, free models, pay models and a few newer models. It makes for exciting times. This ftm Knowledge file examines emerging business models and the speed-of-light changes. 123 pages PDF (May 2010)

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