Thursday, September 20, 2007

The Internet and the Triumph of the Print Media

This may seem a funny title. The decline of the print media in this increasingly competitive and visual world has been long forecast. Yet I have been watching the media for a long time, and I see the opposite happening.

Now before I go on, could you do something for me please.

Go first to the ninemsn site. Until very recently, this was the most popular site in Australia on raw visitor numbers, in part because of the link with Microsoft. Now go the Sydney Morning Herald site. This is now reported to have more visitors than ninemsn. If you dig in a bit, you will see why. The SMH site just has far more content, is far more interesting.

There is an old saying that content is king, and it's true. And in this context, newspapers generate far more content than TV networks.

All media outlets depend on sale of advertising for their primary revenue. To maintain this, you must maintain control of your viewing or reading audience.

Newspapers have been pinched in two directions. Their primary readership has been in decline in face of increasing competition for scarce reader time. Then, too, they have faced on-line competition in classifieds in areas such as job ads.

But their competitors have had their own problems. Free to air TV's viewing audience has been eroded by competition not just from pay TV, but also from an increasing variety of on-line options. So long as free to air remained the only way of reaching a mass audience, they were able to maintain advertising revenue. Now even this is under threat.

In the midst of all this turmoil, newspapers have emerged as key assets. Newspaper readership has been in slow decline, but papers like the SMH have developed content rich web sites that now attract huge readership. So losses and gains.

Now before going on, I would like you to visit a post on the New England Australia blog, Newcastle's Information Black Hole. Then, once you have read the post, click through to the Newcastle Herald web site.

This is, without a doubt, one of the worst newspaper web sites I have seen. It is a symptom of a business problem that has posed real problems for the Fairfax group. To understand this, we need to consider on-line business models.

How to make money out of an on-line presence is the core issue. Fairfax concluded that selling news and information was the way to go. After all, we have content, let's sell it. Wrong!

The real market value of a newspaper story is very low. Put a price on it and you will get a few people to buy. But you will chase away people like me, sending me to other sites. This then leads to falls in visitors that in turn reduces your capacity to sell ads.

The only thing that has saved the SMH is the fact that lots of free content has been put up despite the overall group policy.

We have recently seen my point in action, demonstrated by one of the world's canniest business people, Rupert Murdoch. Mr Murdoch brought the Wall Street Journal for content and brand reasons. Now it is reported that he is going to abolish charges for accessing Journal content.

This makes perfect sense. Mr Murdoch wants to use content and brand across all his platforms. This is best achieved by making core content free.

1 comment:

john said...
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