Last week, I blogged about
the fact that a certain careers website said that journalism was the
first worst job/career field right now, noting that, from the inside,
that was no surprise.
Well, I'm probably going to do a few follow-up posts, looking at more specific issues.
Today, I throw out more specific ideas about advertising and circulation/paywall issues.
First, although paywalls aren't the answer, they're part of the answer. Period.
Newspapers
are reporting more of their ad dollars are coming from the web, but
that's because hardcopy ad dollars continue to sink, even as the country
partway comes out of the recession. Newspapers need to get honest with
themselves and permanently write off half of their hardcopy losses since
2007. And, that may be conservative.
Until newspapers do this, and accept this, they're not going to
be able to better address the future, not just at individual newspaper
levels, but at corporate levels.
As for the current disparity between traditional web ad rates and
mobile-specific ad rates, reportedly as high as 5-1? Within in a decade,
that difference will be no greater than 2-1, driven primarily by
greater use of mobile devices, greater competition for eyeballs, etc.
Remember
how much higher traditional web ad rates were a decade ago? The same
things drove them down as will drive down mobile rates. More
mobile-specific content, portals, and sites increases openings for ads
and competition for eyeballs gets more scattered. Ergo, rates go down.
So, looking ahead to the future, newspapers need to be honest about that, too.
The
Net, in its various delivery forms, has just the opposite problem as
old newspaper media. You got plenty of room for editorial content, of
course, but, because of ephemeral attention in many cases, there's
limited "space" for ads. Plus, add in ad-block software, etc., and web
rates plummeted.
I have no doubt that for both Android
and iOS for Apple, somebody will invent the equivalent of ad-block
programs, too. It's going to happen. Somehow. Jailbreaking of specific
apps as well as mobile operationg systems will be involved, in all
likelihood. But, it will happen.
The even bigger thing is that corporate chains have probably not even
fully digested that 25 percent profit margins, along with hardcopy ad
riches, are gone for good. I think many of them think that the much
lower overhead for the Net will alleviate that. But, if Net dollars are
dropping, or flat, still, and mobile dollars, while rising, are still
smaller potatoes yet, that's not a "replacement." Plus, per part two of
this series, as readers often demand fancier content, the overhead
differential probably isn't quite so great as these owners imagine or
hope.
So, back to those profit margins. Owners, and investors, need to
digest that the day of 20 percent margins, even, for even the biggest
dailies, are gone. Even with two more years of economic recovery, they
need to get comfortable with 15 percent as "good." And, therefore, to
stop laying off ever more editorial staff, cutting content, etc., while
rewarding the CEOs who do that.
Think of this as the dot-com boom in reverse. The worst of the
dot-com financial bust for papers is over. BUT ... not all of it is
over. AND ... not all the lessons have been learned.
On circulation? A dollar is as high as even big metros outside the
two coasts (and I really mean coastal California, on one hand, and the
Boston-DC axis on the other) can go for several years. Ditto for the $3
mark on Sundays. That's your ceiling.
I'm glad to see a major metro like the Dallas Morning News has
therefore finally gotten into the paywall spirit. I don't currently live
in Dallas, so I wouldn't pay, and I don't know how much it costs. But,
it was needed. That's even as, here in central Texas, the Austin
American-Statesman, still free online, bleeds even more.
Of course, the AP, and now, Reuters with a largely expanded American
presence, and somewhat AFP, have to be in the mix. Not all three can
jointly deal with rates for news aggregators without explicit
Congressional antitrust waivers, of course. But, individual papers can
only do so much.
Of course, AP's long-term chairman of the board, Dean Singleton, was
as stupid about this issue with AP as he ultimately was with the
finances of MediaNews, running it into bankruptcy.
And, why didn't a court impose a five-year hiatus on him buying
newspapers after getting out of Chapter 11? That could be a blog post by
itself.
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