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04
Nov
2011

Read all about it - but only in eNewspapers...

POSTED BY Global Administrator
As far as the daily papers go, it is fair to say that, generally speaking, I am an old-fashioned guy: I like my news in print format, starting on the back page, working my way through the sports pages in reverse order and then – having reached the horse racing section which is of little or no interest – turn back to Page 1 to learn more about whichever economy or government is on the point of collapse, which country is about to be/has been invaded or which hamster has allegedly been eaten by a minor celebrity.

It is an activity which I find greatly enriches one’s commute (the reading, I would hasten to point out, not the supposed consumption of small furry rodents).

But I fear that I am part of a dying breed; sales of daily newspapers have been in decline in many markets for a decade or more, and this decline has been accelerated by the emergence of your friend and mine, the consumer smartphone, which meant that not only could consumers access digital news 24/7, they could do so on a mobile terminal which travelled everywhere with them.

According to the Audit Bureau of Circulation, between mid-2006 and mid-2011 sales of national newspapers in the UK fell by 20%, to just over 9.5 million; over the same period in the US, the decline was even more pronounced, with sales of the top 10 daily newspapers falling by 30%. These lower circulation figures in turn promote a vicious circle; less readers mean brands are less inclined to advertise, or at least not for the rates they were previously prepared to pay. The upshot has been that an increasing number of newspaper chains have either filed for bankruptcy or have otherwise been obliged to cut costs to the bone by cutting staff and/or reducing the size of the physical ‘paper.

Hence the urgency of media organisations exploration of the digital channel as a way of staying afloat; hence the interest in this rather wonderful device called an iPad which has revolutionised the tablet space and which potentially offers a means of monetising the digital space by offering a newspaperesque experience on the mobile device.

A means. Potentially.

There are many hurdles in the way of newspaper extracting moolah from tablet or other mobile devices, or at least enough moolah to pay the wage bill. Not least among these is the simple fact that while consumers have been increasingly accustomed to paying for digital content via their mobile devices, these payments are typically of no more than a few dollars per item, or maybe up to ten dollars per month for a premium subscription item. In the US, a print subscription to a national newspaper is of the order of thirty dollars per month; in the UK and Japan, around fifty dollars. Consumers are simply not going to pay these prices for digital news, certainly not when there are a host of other news sources available offering similar content free of charge. Newspapers may be able to leverage the strength of their brand and offer content at a premium: but not a premium of thirty to fifty dollars per month.

The reality is that while it may be possible to sustain a digital-only edition – and even for that edition to thrive – it will become increasingly difficult to publish digital and print in tandem, with sales from the latter continuing, inevitably, irrevocably, on a downward spiral.

Our recent research indicated that sales of eNewspapers to portable devices would reach $1.1 billion globally by 2016, presenting a significant opportunity for publishers.

But as for their print bedfellows: while there may be a few exceptions to the general malaise (the Evening Standard has shown that it is perfectly possible to sustain one daily within a large metropolitan area solely on advertising), their future is bleak.

As bleak, in fact, as that of the alleged small, furry rodent.