All this time, publishers have frantically sought answers on how to turn things around. Judging from the desperate financial results emanating from company after company, the media seem to have few answers.
Are the answers not the wrong ones, but rather the questions?
There are not enough fingers in the average newsroom these days to count the number of times we all have heard this: “With the Internet, newspapers made the mistake of starting to publish news for free, and now we need start to start charging.”
The problem is, newspapers have always given away the news. On top of that, they have also given away the paper on which the news was printed. And they even gave away a large portion of the distribution cost.
So the wrong question, leading to the wrong answers, is, “How can we start charging for news again?”
A better question: “Since declining print advertising and circulation revenue no longer sustain quality journalism delivered for free, what new revenue sources can we develop to sustain the creation of quality content?” I personally believe that leads to better discussions and ultimately more viable solutions.
Then there is this ubiquitous assertion: “Every 10 dollars in print revenue is 1 dollar in digital.” How depressing is that? What opportunities or solutions does that statement open up? Why not try this: “For every reader in print, we need 10 in digital”? I think that statement would lead to more creative, positive and action-oriented results.
The need to innovate
And finally, one of my favourites: “Newspapers need to innovate new business models to drive new revenue.”
It is a simple fact that per household, newspaper penetration has declined since the 1960s and 1970s.
If the massive resources at media companies’ disposal 40 years ago engendered little or no innovation, how could the current cash-strapped environment prove different? Publishing is not like the stock market; in our industry, past performance is an indication of future gains.
Fortunately, there are a few media companies globally that have proven their ability to either innovate or pull out of the market early enough to focus on other things. For the rest, an alternative thought could be: “If we need to reinvent ourselves and become more agile, why not partner or affiliate with innovative companies and offer them access to our market via our reach, and leverage that via mutual business benefit?”
Considered separately, each one of those questions/statements has a major influence on the outcome. When combined, they change the strategy, mindset and business model of a company.
“How do we start getting paid for news, in an environment where digital revenue is 10 percent of print’s income?” leads to a paywall, a major reduction in resources, lower-quality journalism and the slow but eventual demise of a media company.
“What new revenue sources could we find in an environment where we would have a 10-times larger audience in digital than what we have in print?” leads to re-alignment of resources to grow, launch, partner and affiliate with new digital initiatives.
Some of those initiatives will fail, but some will thrive. In any case, it is a path that is more rewarding, more positive and easier to communicate to staff and shareholders. While it is not without risk, the risk compared to eventual demise should be a reasonable one.
With several years of start-up experience after many years in media, I have learned a lot about agile businesses. One characteristic of agility is determining whether the question is correct before jumping into answers and conclusions.
As a media company, are you asking the right questions? And, yes, I think that is the right question!!!
Niko Ruokosuo is an international media executive with 20 years of management experience in Scandinavia, Central Europe, North America and the Middle East in diversified media companies and associations in each market. He is a shareholder and advisor in three startups: one in Finland, one in the USA, and one in Saudi Arabia. He served as research manager at the former IFRA (now WAN-IFRA).