The demise of the UK’s Observer newspaper marks the end of another cultural institution.
But why are newspapers disappearing so fast?
Everyone seems to be talking about the collapse of the industry; analysis and comment lament the seemingly inevitable death of ‘quality’ journalism, and the industry’s obsession with the ad-supported model.
Some have even launched campaigns to save the newspapers that people have stopped buying.
But it’s time to face up to a simple truth.
Newspapers are dying because they no longer add value.
That doesn’t mean that news or journalism no longer add value; indeed, they’re in greater demand now than ever before.
But success depends on benefits, not products.
People have stopped buying newspapers because they no longer deliver a benefit that justifies the price involved.
We only make sacrifices when we perceive a subsequent benefit or value.
But that value is in the eye of the beholder – a personal perception based on individual context.
Historically, newspapers provided value by delivering up-to-date information, critical analysis, and commentary.
But they’ve lost their monopoly.
Today, almost every aspect of a newspaper’s value has been surpassed by cheaper or free alternatives:
Websites like Twitter break the headlines almost instantaneously;
Free-to-air TV news delivers the in-depth content in a more dramatic and engaging manner;
Blogs deliver a broader spectrum of analysis, commentary, and opinion;
Classifieds have been replaced by cheaper, more convenient services such as Craigslist.
In light of this, it’s no surprise that newspaper circulation has dropped, taking advertising revenue with it.
This falling revenue results in staff cuts, which in turn affect content, and the cycle spirals out of control.
But this only demonstrates that the model – the benefit delivery system – is broken.
People still want the benefits delivered by newspapers, but they’ve found better value elsewhere.
But the fact that few of these sites deliver any significant profit of their own accord demonstrates the severity of the news model’s inadequacies.
Something has to change.
Perhaps news providers could learn something from brands facing similar challenges.
For all its mistakes, the music industry is beginning to build revenue models that are better suited to today’s world.
The licensing structures being explored by artists, labels, and services like Spotify and Nokia’s Comes With Music provide the same customer benefit as before, but successfully create mutual reward through new delivery models.
This new approach works because of its value equation.
If news providers are to survive, they need to spend time building such a value equation themselves.
Licensing may be one option, but the key to success is to work out the benefit that people are actually seeking.
Critically, this may not be what news providers have delivered in the past.
Many companies make the mistake of continuously trying to improve an old product, without understanding whether this will deliver what people really want [John has some related thoughts on that here].
If they are to survive, news brands need to think beyond themselves – they need to question their consumers and listen to their responses, rather than getting caught up in endless introspection and self-analysis.
Once again, the advice is: it’s about them, not you.
It sounds very simplistic, but I think the answer is that straightforward.
The same people who wrote for newspapers can still provide the same valuable service; they just need to find a new way of delivering their value.
Ultimately, the marketing principle will always hold true: find a profitable way to satisfy people’s wants, needs, and desires, and you will have a successful business.
Great piece in Marketing Pilgrim today about NewsCorp.’s move to a paid subscription model.
Here’s what author Jordan McCollum had to say:
But the more you charge, the fewer people will buy something. I hope News Corp isn’t counting on keeping its already-struggling ad revenue the same with fewer page views once it goes to subscription-only. That struggling ad revenue may be exactly what prompted this move, but further limiting the pageviews and by extension the ad rate you can reasonably expect, News Corp may be shooting itself in the foot.
Once again, the conclusion I draw from this is that the approaches to generating revenue that defined the old model are probably not the best any more.
Meanwhile, news brands continue to bash their heads against brick walls.
The industry needs real change, not just repackaging of the same, broken approach.
It would be great to hear your thoughts.
Image credit: “Shredded Paper” by Konstantin Sutyagin [please let me know if you’d like me to remove this image]
Many thanks to Ian Shapira at the Washington Post for an inspiring article that prompted this post. Such thanks seem ironic given the nature of his comments, but thought provocation has always been the purpose of editorial, and regardless of where Ian and his peers share their opinions, I will continue to find them immensely valuable.