During the week, newmatilda carried an advance story on a radio program that aired this morning on ABC discussing the perceived decline in quality journalism. This discussion is part of a broader discussion on the decline of the newspaper press, especially in the US.
I think that the newspaper press is very important, especially to local communities. I also think that the media in general, the press in particular, has lost its way. I am using this post to tease out some of the issues.
I want to start with a series of apparently disconnected points.
Consider the ninemsn web site. Shallow, isn't it? It's been losing market share for some time because it lacks content.
Last February, one of Australia's most famous magazines, the Bulletin, closed because it was losing money. A story at the time said:
A spokeswoman for PBL Media confirmed that the The Bulletin's website will not continue either. An insider said the website cannot stand alone as a profitable enterprise.
How dumb can you get. In one blow, they closed not just a main source of content, but also an on-line expression that had real traction. The key issue to my mind was to find the best way of integrating at least the web site into an overall media model.
This brings me to the concept of network economics, a field of economics especially applicable to major systems such as telecommunications networks.
In simple terms, the value of a network comes from the total system. The more people on the system, the greater the value of the network. Such systems tend to be marked by high fixed costs, but rapidly declining variable costs. At the margin, the on-going cost of servicing a new customer may in fact be zero.
Now think about the job sites such as Seek. The cost of servicing a new job applicant is very low, close to zero. The cash cost to the job searcher is zero. This obviously attracts people to the site.
But the site also has to attract jobs. So it needs employers or their agents to place jobs on the site. To this end, prices are set low. Print newspapers are the losers. Yet the web sites also still depend upon newspapers to provide job ads. Without them, their costs of servicing job providers would be higher. So there is still an uneasy symbiotic relationship.
The story does not end here.
Some newspapers, I have Rural Press in mind, have responded in quite a clever way. If you place a job ad in, say, the Northern Daily Leader in Tamworth, it also appears in other regional media such as The Armidale Express and on the on-line site My Career. This increases job coverage in the Express, but also gives My Career an edge over Seek whose coverage of non-metro jobs is quite poor.
Extending my argument, I access a lot of newspaper web sites. I also read print copies. The two serve quite different needs.
If you look at the Sydney Morning Herald web site, it has far more content than ninemsn. This holds true for other TV news sites, including the Al Jazeera English language site. I use the Al Jazeera site quite a bit, but it generally takes me less than ten minutes to scan the whole site.
Yet even with the on-line edition of the Herald with its greater content, it rarely takes me more than ten to fifteen minutes to exhaust new content. By contrast, the print edition of the same paper has far greater content.
There are practical reasons for this. As a rough rule of thumb, one that I break all the time, content on web page has to be limited to around 60% of the equivalent printed page. It is simply harder to read a screen than a printed page.
So printed papers offer significant advantages. However, this has not stopped their circulation decline in many places. Noticeably, the decline has been less in Australia.
This brings me to another issue, the nature of the distribution system.
Despite the continuing attacks over time by Professor Fells and others on the newsagency system as anti-competitive, it has made newspapers readily available in a way not seen in some other places. Even here, as with PBL and the Bulletin, the newspapers are sometimes their own worst enemy.
In Protect newsagents, Michael Gorey traces the decline of the newsagency system. He is right. Some "newsagencies" now have neither newspapers nor, for that matter, books. If the proprietors fail to protect their distribution systems, then they place the survival of their papers under greater threat.
There were several other stories on Michael's blog that bear upon the issues that I am talking about.
Syndicated content talks, as the title suggests, about the rise of syndicated content. Michael's focus is on the Adelaide Advertiser, but it is a broader issue.
I see this all the time in web searches, identical stories across mastheads. You will also see it if you go to, say, the Sydney Morning Herald site and then go to the bottom and look at the stories on other Fairfax papers.
If you think of a print newspaper as a stand-alone business, this makes sense at one level through cost reduction. However, it creates a problem at a second level.
With the exception of the Financial Review and the Australian, all our newspapers are in fact local papers. Here the Sydney Morning Herald or Age are in fact no different than the Moree Champion or Blayney Chronicle. They are bigger and carry a bigger range of news, but the local element is still critical.
The key risk with syndication is that it creates a sameness, while reducing content, local in particular. I will talk a little more about the localisation issue in a moment, but first I want to introduce another post of Michael's.
In Idle speculation on Fairfax, Michael discusses the current problems faced by the Fairfax empire and wonders what they might sell next. Let's tease this out a little.
The newspaper flagships of the empire are the Sydney Morning Herald and Melbourne's The Age.
If you look at the web sites, you will see that they are almost identical in design. Outside localisation, the only differences between them is the absence of any reference to Fairfax and Fairfax Digital on the Melbourne site.
Oddly, the SMH site carries no reference at all to the Sun-Herald, the Fairfax Sydney Sunday paper. But then, Fairfax is struggling with this paper's role just at present.
You can see on both sites the promotion of and links to the on-line services - Drive, Domain etc - that the empire has been developing as an alternative to the now declining streams of income especially from classified. Again oddly, there is very little cross-promotion for these that I am aware of in the print editions of the paper.
Now click on Fairfax Digital on the SMH site. This carries you through to a listing of various sites and topics. I made the mistake of clicking on the Financial Review. This is pay for view only. Worse, once there, I could not get back to the main site.
In all, I do not think that Fairfax has properly addressed how all these various bits - print and on-line - might fit together. There is no really coherent strategy that I can see. Worse, some elements such as pay for view are actually counter-productive in the way that they are presently structured.
Now if you look again at the SMH web site, you will see that there is no reference at all to regional NSW, notwithstanding the fact that the merger with Rural Press gave Fairfax close to a monopoly position in the print press across large slabs of NSW including much of New England. Again, no cross-linking.
Rural Press still has its own web site, although this has lost focus to some degree. It is not immediately apparent how you find the 160 paper and magazines across Australia. However, if you click on yourguide, tou will find the paper list. Note the sudden re-appearance of the name Fairfax Digital. I wonder what the branding strategy is?
Now here I want to change directions and dig down a bit. The key thing to remember about the local papers in regional NSW is that they occupy a far more important local position than does the SMH itself.
The Newcastle Herald is the major newspaper in the largest urban area in NSW outside Sydney. The first thing to note about the site, and this is true of all Rural Press sites, is that it's quite passive. It is there as a service, but no more.
Unlike the SMH site, and that's not perfect by any means, there is no real reason to visit the site other to check on the latest stories selected for on-line publication. That's good, but it's not enough. The web site is not being addressed as an entity in its own right.
This has become a very long post, and I have barely scratched the surface. Just to summarise to this point.
The two key issues are platform and network economics.
Platform includes both the print version and on-line editions. Network economics refers to the way in which economics are affected by total network economics, not just the returns from an individual activity.
The strength of the print media lies in content creation. Network economics suggest that this cost should be spread across the whole network, rather than treated individually. To do this, individual activities/platforms need to be identified, have their own strategies and then be cross-linked and promoted. Here present business models are failing.
All this may sound an odd post for this blog. It's not because New England depends upon its media.
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