For many years now – more than a decade, in fact – we’ve heard predictions of the death of newspapers. But in recent months, I’ve detected a significant shift, which I’d like to talk about.
I will cite three reports in particular.
BCG Report on Transformation
The first is the most recent one I’ve come across – a report by the Boston Consulting Group or BCG, titled “Transforming Print Media.”
BCG consultants must have learnt from the newspapers they’ve worked with, because their newspoint was in the very first paragraph of their report. Here’s their intro:
“Conventional wisdom says newspaper and magazine publishing is a dying business. Based on our work with print media companies in North and South America, Europe and Asia, we believe that the conventional wisdom is wrong.”
When I read this, I went – Alleluia!
Some of us in SPH have long believed this. I’ve been saying so at these annual awards every year.
BCG goes on to explain why: “In most countries, print media companies continue to have commanding brands and strong consumer relationships.” And print media continue to generate “enviable cash flows.”
However, the news is not uniformly good. Because, at the same time, “demographic evolution, technological revolution and changing preferences for how people consume media have made deep inroads into circulation and advertising”.
I quote BCG’s three opening paragraphs because they summarise precisely the performance of SPH papers.
We continue to have commanding brands. And our customer relationships have remained strong. But after several years of growth, revenues of our newspapers and magazines slipped 1 per cent to $1.003 billion for the FY ended Aug 2012. Our profit fell by a larger extent because our costs went up. Still, it was a creditable performance.
FY 2013 is looking to be another challenging year. I will come back to this.
Poynter article – Print’s extended shelf life
The second article I want to cite is from Poynter, dated 24th Jan – just last month. Poynter noted two reports which shared the same conclusion: “an extended economic shelf life for print, even as audiences swing digital and the search for viable digital news products continues”.
Note the key words – “an extended economic shelf life for print.”
Poynter also cited an article titled “Ten years that shook the media world” which noted that the direction we are moving is “clearly toward ‘new’ media, but ‘old’ media are still very much with us and do not appear to be about to disappear wholesale.”
The paper’s conclusion? “The print to digital transition will play out over decades rather than just the next few years.”
So now we’re talking decades, not years.
INMA’s Outlook – Print + Digital
The third report is INMA’s Annual Outlook, written by its executive director, Earl Wilkinson, a big digital fan. But this time he says: “… We are too obsessed about print versus digital. Where we are … is neither print nor digital. We are a print + digital industry… a hybrid industry.”
This is a subtle but significant change. It cheered me because our EMND papers have gone print + digital in a big way.
What I’m most proud of is the All-in-One pricing we introduced in September 2011 after the launch of The Straits Times apps for tablets and smartphones.
A key aspect of our pricing is that we charge the same price for our digital products as our print papers. For The Straits Times, the standalone online version costs $26.65 a month – same as a one-month home subscription to our paper. The ST mobile app also costs the same on our e-shop (the iTunes price is 30% more).
This is significant because it has removed the tension between print and digital. It’s also made our all-in-one price ($4 more than our print price) a compelling one.
By end-August last year (when we closed our FY), the ST had achieved almost 30,000 digital subscriptions, bringing its total average daily circulation (both print and digital) to a high of 374,000, a growth of 5 per cent. In the last six months, we more than doubled the digital number.
Had we charged less for our digital products, we would surely have garnered more digital subscriptions, like The New York Times and the Financial Times have. But it would have been at the expense of print sales.
Looking back, this has been a decade-long journey. We were among the first media companies in the world to introduce digital paywalls, starting with BT. A Guardian article on 1 Jan this year reported how paywalls have only now become increasingly prevalent at newspaper websites across the United States.
Eleven of America’s 20 largest selling newspapers are either charging for access or plan to charge. Just this month, we read that YouTube will soon introduce paid subscriptions for individual channels.
When I meet my counterparts overseas, they regret having moved too slowly to charge, and by too little.
Just this month, Cosmopolitan magazine in the US made news when they charged more for their online version than the print edition. Cosmo print readers get their first-year subscription at US$10. But if they want the iPad edition, they have to fork out US$19.99.
As one blogger put it: “This is a pricing manoeuvre so bold it may make even Cosmo readers blush.”
I predict that many publications – both magazines and newspapers – will strive to emulate Cosmo. This is hugely significant because it means print media has wrested back some pricing power.
For SPH, the bottomline is, we have built a successful business model for our print + digital products, both online and mobile. We can and will grow from here.
In January, ST.com and AsiaOne hit historically high pageviews – 85 million and 66 million respectively. STOMP is now SPH’s most popular site, with a further 86 million pageviews. Our unique visitor numbers are also up across the board.
Later this year, The New Paper will turn 25 and will relaunch as a bold, new multi-media product. It will pioneer yet another new business model: a print + digital price for newsstand sales.
The Challenge Ahead
But even as we succeed with our print + digital strategy, we have to scale an even bigger mountain this year. We have to transform our entire newspaper operation.
Our newsrooms have already begun to do this. I’m happy to see ST is now a multi-media product – print, online, mobile, video, as well as social media – with our staff working together across platforms. Sumiko Tan has been driving this and I’m pleased with the results so far.
What I hope we will achieve is reach younger readers. In all countries, and especially in the last decade, the young – those in their 20s and early 30s – have deserted the print media. In the US, only 6% of them read papers, compared to 48% of those over 65. The figures are not as bad in Singapore, but we’ll become like the US if we do nothing.
So engaging our young, through all our channels, is a top priority, even as we continue to serve our loyal older readers.
To succeed, we must have the right blend of youth and experience in our newsrooms, both digital natives and print junkies.
But even this will not be enough to transform our media business for the digital age. The BCG report spelt out what transformation means – “a complete overhaul in how we think, plan, operate, and define success in virtually every aspect of our business.”
And the critical question is how to balance the twin goals of maintaining our print revenues while planning and executing what BCG calls “a long-term vision for a very different future”.
So this, then, is the task we will be embarking on this year. You will soon hear more on this. You may see even less of me. But I will strive to consult widely and be as open and transparent as I can.
I know there will be anxieties about cost cuts, but I want to assure everyone that cost-cutting is not the main aim. We want to transform mindsets and our whole culture. And it’s not just the cost side of the equation we will review. We will also look at increasing revenues and new profit streams.
So, 2013 looks set to be the start of important changes for us. If we succeed, we will have a more agile EMND and with a new strategy for the digital age ahead of us. It will ensure that we stay among the world’s most successful media companies.