Despite the predictions of doom mongers, at every point of media evolution, newspapers have continued to respond – eventually – to each new challenge, having navigated the rollercoaster of the economic cycles. I might say that of the last 30 years but the reflective ups and downs have been going on since the 2008 GFC.
For some newspapers, it looks as if a second slide is upon us, especially for those in Europe.
So we need to be prepared but recognise our industry is terrible at preparing for recovery. Our actions during down times often inhibit recovery and renewal. Decisions now, addressing economic uncertainty, with the inevitable further cuts, will not necessarily address opportunities in three years.
Daily to weekly may be one way of addressing both the short and long term positions.
When I read the Newspaper Association of America’s report on daily to weekly [last year], I confess to being dubious but it got me thinking. My emotional attachment to the daily newspaper concept has been dramatically altered by work on a couple of projects, where I have focused on the economic and industry realities.
Print readers’ frequency of reading and purchase is declining. Reading frequency is a far greater source of circulation decline than brand attachment.
Advertisers are not advertising every day. Display ads appear once, or sometimes twice a week. Classified advertising tends to be focused in ghettos – cars, real estate, jobs and so on.
A daily newspaper does not necessarily attract a larger monthly user base to its website. I have plenty of examples where the local weekly audience is not only as strong relative to circulation but is more loyal in terms of repeat visits. So how does all this translate in terms of customer behaviour?
Newspapers’ economics vary greatly from country to country but the following assumptions are reasonable: In single-copy markets, the circulation figure, of say 30,000 copies typically reflects a buying group of 60,000 people buying three times a week. If a paper converts to weekly sale, circulation on that day will rise.
The same is true of advertising. Much of the revenue remains in specific segments – auto, jobs, real estate – which feature in weekly supplements. So it is reasonable to assume a high proportion of revenue that is spread across the week – at least 70 percent, in my experience – can be funnelled into the weekly offering.
Such repackaging will result in a far larger advertising volume, justifying a higher editorial content, a better product with more reading life, and possibly a higher cover price. Online content still needs to be daily so one cannot assume dramatic reductions in editorial costs.
Similarly, the reduction in production times does not negate all operating and capital costs. Costs would vary at each newspaper, as would market response. But my model suggests that assuming editorial and overhead costs are halved and those in advertising are cut by 40 percent, and most other things are pro-rata to revenue, then profit margins improve by 13 percent.
These assumptions are vague but to me the argument – while not good for everyone – will be excellent for some, particularly those newspapers with a high proportion of ad revenue to circulation.
It’s only one option but in these confusing times everything is worth a good look.
Jim Chisholm is an independent media consultant based in France. He can be contacted at email@example.com