News today from Press Gazette that The Times is upping its weekday price to 90p. When all newspapers are facing severe structural pressures on their business models this seems a small but sensible step.
It follows last month’s Chapter 11 filing by Tribune, publisher of papers including the Chicago Tribune and Los Angeles Times, a seismic event for all in the news media. While the underlying cause of Tribune’s collapse was the enormous debt burden it assumed when taken private in 2007, what felled the company was the steep slide in advertising revenue. There are both short-term and long-term trends at work here: right now, we are all in the teeth of a nasty recession so you would expect ad revenues to drop; but there is also the long-term erosion of newspaper readership, as we increasingly turn to online and free news outlets to keep up to date.
The problem is more acute for US newspapers than UK ones, according to New York Times media correspondent Richard Pérez-Peña. Interviewed recently on Radio 4’s Media Show he said that US papers typically make 75% of their revenue from advertising, while the UK press is less ad dependent. He added that US papers have lost some 25% of their ad revenue over the past two years.
While UK media may have slightly more room to breathe in revenue terms, they too are facing sharp declines in readership. Virtually all our major daily and Sunday newspapers are seeing their audiences drop year-on-year.
Although all newspapers are working hard to grow their online advertising revenues, right now those are pretty minor when compared to their traditional print ad income.
So, just as we were all gearing up for Christmas there was a lot of discussion about what newspapers should be doing to get out of this hole. Well worth checking out is the discussion on Mitch Joel’s Six Pixels of Separation podcast, episode 135.
Some of the common themes that are coming up are that to make a profit newspapers will have to enhance their online readerships, charge more, shrink their staff, offer more specialist coverage, offer fewer sections, perhaps even publish less frequently (it seems an odd thought, but with a flood of online and broadcast news, do we still need daily newspapers?).
One of the toughest nuts to crack is clearly whether to charge more. In an age when free newspapers litter virtually every train carriage in London, it is clearly a risk to up your prices. Well done The Times, therefore, for taking the Brave Pills.
As 2009 gets underway, these are the issues that newspaper executives will be wresting with. While nobody can readily identify which combination of actions will work, our contribution to the debate is to wonder if BreakingViews offers a model that will be part of the answer. BreakingViews was set up in 1999 by Hugo Dixon, former editor of the Financial Times’ Lex column, to offer an independent source of financial insights. It has since grown to become a provider of news content to many of the world’s top newspapers as well as direct subscribers. It is specialist, multi-platform, valued and profitable.
Both for enterprising journalists looking to start a business and for hard pressed newspaper bosses looking to deliver more for less, could BreakingViews offer inspiration for the New Year?