Doctor, a columnist at Nieman Journalism Lab with his “Newsonomics” analysis, will moderate a “CEO Town Hall” session with Phillip Crawley, CEO of The Globe and Mail in Canada, and Jean-Luc Breysee, Deputy CEO of Group Figaro in France, on Monday during the eSummit.
WAN-IFRA: The engagement with audiences appears to be better than ever before. Do you think the pandemic has played a role in winning back trust in newspaper organisations, if so, how can they leverage that loyalty in business terms?
Ken Doctor: We’ve seen unprecedented short-term membership bumps in news subscription sales. Technology provider Zuora has reported increased subscription growth of 110%, among its clients, in the last three months. That tracks closely what I’ve seen: those news sources that have devoted significant resources to local Covid coverage have been rewarded by their readers, with new subscriptions. In fact, they’ve re-proven the unique value of local reporting. Even superior national reporting can’t do what the locals have done. The lesson: high-quality, unique local content sells.
You have covered consolidation in the US quite extensively. How will the pandemic affect that? Accelerate it even more so?
Consolidation is already picking up more speed. The reason is the same as it was pre-pandemic, but with even more urgency: M&A is a prime strategy to reduce expenses, and cost reduction is top of mind for all publishers. With Alden Global Media closer to assuming fuller control of Tribune Publishing, and McClatchy exiting bankruptcy court, we may well see what were seven independent newspapers companies falling into three or four companies by year’s end. And they will likely be largely controlled by financial companies.
Do you have a sense of this situation in Europe?
I don’t have a good enough view. The longer-standing family and private ownership structure in Europe has clearly cushioned the continent from some of the excesses of financialization of the newspaper business in North America.
With the huge hits on advertising revenue, what are some of the key alternate revenue streams you see emerging out of this crisis?
The new ad losses – with somewhere between 15% and 30% of pre-pandemic ad revenues not expected to return even when society fully reopens – have accelerated the intense focus on reader revenue. That’s job one for newspaper publishers. We see a lot of experimentation with virtual events, mainly to replace lost sponsor revenue expected from physical events. Those physical events were the key new alternative many publishers had turned to, so in addition to the lost ad revenue, that’s been another hit to income.
And what do you think about some of the non-profit models and government funding long-term?
All high-quality journalism, whether produced by for-profits or non-profits, is welcome. At this perilous moment, we’re seeing a greater shrinking of the for-profit press, with a few notable exceptions.
Overall, the non-profit model is small, diverse and enthusiastic – but not coming close to replacing the volume of local reporting that has been lost in the great shrinkage of the press. We’re seeing more serious business and tech-based thinking in some of these enterprises. That’s very welcome, and needs to grow rapidly.
I’ve announced my own experimental local news model, an interesting hybrid as a for-profit, public benefit corporation. I hope Lookout Local changes the conversation about what’s possible and necessary in rebuilding local news in the 2020s. More news on it soon.
As to government support, there’s a wide mix of proposals in formation. Short-term ones, such as payroll support, clearly have been helpful. There are intriguing longer-term ones that would provide both potential news company owners and/or subscribers tax benefits. We’ll see how many actually get tested in North America, Europe and/or Australia.
As critical as is the financial feeding of journalists’ jobs, I believe we all need to keep a couple of arms’ lengths from government influence in the essential independence of news media. That’s as fundamental to our survival as is the money that supports it.