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Changing Tides in the Newspaper Business

Various pundits have been calling newspapers down and out in the media game. The reality, however, is not that simple. Instead, changing consumer interest has resulted in shifting demands for print media. Some companies are adapting to the changes, some will fall.

Steve Rubel points to data on the rise magazine advertising:

According to the Magazine Publishers of America, magazine advertising pages climbed to nearly 250,000 pages last year. While they’re down from their 2000 high of 286,000 pages, the trend line has been going up

And his analysis:

People like to peruse Vogue and GQ for the latest fashions and the ads are part of the experience. Second, I think it’s also because magazines are by their nature vertical and they allow people to dig deeper into the subjects that interest them.

I think the point of segmentation by verticals is the key here. The win is on two levels. On one hand, it engages the reader so boosts circulation. On the other hand, provides a targeted demographic to advertisers, thus boosting revenue and the quality of the product.

Not all magazines are winning:

… the rising tide is not lifting all boats. Time and Newsweek are both suffering as news really moves to the Web.

This gels with the comments of Peter Read Miller, a Sports Illustrated photographer, about the trends of his magazine. During his tenure, SI has gone from breaking the news of the games results, to a focus on the story behind the games. The four day lead time from the game to the publication is too long for SI to be first with the news.

Newspapers have much shorter lead times, typically a day, allowing them to have stayed relevant for longer. By having breaking news move to the web, the lead time expected by media consumers is now measured in hours or minutes, not days.

As with the magazine industry, some papers have failed to adjust to the change in their customer’s consumption of news. However, there are news groups that are bucking the trend.

A local example, is the Fairfax media group. Through some very smart moves their circulation is at a 12 year high.

For example, one of their major publications, the Age, is segmented into a host of magazine style sections. Each section is high in content, color, advertising, and is often in a tabloid paper size. This makes the entire paper, in essence, a collection of magazines.

They are also ahead of the local market in offerings such as blogs, photo slideshows and video content on their website, and have decided to reduce the physical width of the paper by5cm. (This last one is a big deal for a newspaper).

Perhaps part of their success has been in staying local. There is much speculation on the web that local is the next battle ground.

From Don Dodge:

Local search is a huge opportunity. The local newspapers are in a great position to own it…but they don’t.

And Tom Evslin:

The importance of these statistics is that there is now a critical mass of people who can and will take advantage of and interact with rich LOCAL content.

Newspapers are inherently local. They have relationships with end consumers through their circulation department, and with local advertisers through ad sales. In the next few years, successful media groups will be making better use of these key assets.

My read on the industry? Newspapers are far from dead, but the market is changing around them. This will cause pain for some, while providing much opportunity to those prepared for change.

I expect to see even more consolidation in the coming years, such as Rupert Murdoch’s offer for Dow Jones. This will allow media groups to further diversify their publications, much as Google has diversified their web offerings.

Disclaimer: All opinions (and errors) are my own and do not reflect those of my employer.