Aussie Newspapers in decline and denial

Sitting in my lawyer's waiting room today and glanced through my mate Mark Jones' paper, or as it is sometimes known, "The Australian Financial Review". Marketing editor Neil Shoebridge has a hilarious article entitled "Newspapers rise to challenge of the internet". You can try to read it here but, of course, the AFR want to charge you about $3.50 for the privilege

There are some great graphs which indicate that capital city newspapers' sales in Australia  declined 2001 - 2005 and that the per capita consumption of capital city newspapers from 1993 - 2005 have declined substantially, especially the Mon-Fri numbers. The graphs also indicate that capital city commercial free-to-air TV stations have declined 2001-2005 BUT, and I love this, the ABC and SBS are UP over that period. And yet the commercial FTA networks keep churning out more reality TV crap and not trying to produce intelligent programming. The graphs also show how the advertising split is breaking down, with newspapers, FTA TV, cinema and radio, all getting less of the pie in 2005 than they did in 1990.

However - and here is the bit that made me laugh out loud - according to the newspaper execs mentioned in the article, they are going to be around forever.

Here's an example:

"Newspapers are not facing and will never face an edge-of-the-cliff-type experience," says new Fairfax (the owner of the AFR) CEO David Kirk.

Now here's the thing. I've said this many times. Newspapers have not yet had a frontal assault from the online world. We do not yet have a digital medium which is as cheap, lightweight and convenient as paper. Will we, one day? Yes, I believe so. Witness the recent developments in diffractive planar optics.

And yet newspapers are already in decline. What will happen to them when they have real competition? Blogs aren't real competition - very few people have the technology today to read blogs in bed, on the train or in the cafe on their lunch break. How far away is that day though? 5 years? 10 years tops? I hesitate to predict, but I know it is coming. And every day it gets closer, the shelf life for newspapers as we know them  shortens. Now I don't think newspapers are going to completely disappear. I don't think journalism is going to disappear. I do, however, believe that the economics of this business is going to be under enormous and increasing negative pressure as the audience attention they can demand fragments across 100 million blogs and millions of podcasts.

Harold Mitchell, Australia's largest media buyer, disagrees with Kirk's optimism. He says

"Newspaper sales are in long-term decline and it is difficult to see that reversing. New technologies are making it easier for people to get the information and entertainment they want when they want it. People no longer feel an urgent need to buy a newspaper or watch the TV news to find out what's going on."

You go Harold.

There is another article by Shoebridge on the same spread about how Seek has, in 8 short years, taken the #1 spot in online employment ads market in Australia and in this article David Kirk makes a little more sense when he says

"You should never underestimate the power of technology and its ability to disrupt existing markets."   

He misses the true point of what's happening though. It isn't technology that is disrupting the news industry - it is the people who are dissatisfied with the news product as it currently exists and who are using the technology to create alternative sources of information and entertainment.

It's something newspapers, TV and radio would do well to tattoo on their foreheads so they don't forget:

It's the people, stupid.

Comments

[Phillip Molly Malone]

Does these declines and graphs included the numbers that don't buy the physical paper but still get the same stories from the same news sources online? The only times that I buy a physical paper is on Sunday to get the TV Guide (even then not always) (oh and occationally when I am out to lunch on my own). But the first places I check for the storys that interest me are realfooty.com.au (The AGE Footy site) and www.heraldsun.com.au/footy. So they still have my attention just not buying papers.

I am not sure you can give all the credit or assume that blogs are responsible for the complete decline. I am sure they are part of the cause (and maybe come more so) but I would image the Papers are canablising their own business with their online offerings as they need to as if they don't, someone else will.

In conclusion, yes blogs are important, but we are a long way off them being the thing to put a dint in their importance to the Main Stream Population.

JMTC
Molly

[Cameron Reilly]

yeah i agree with your last statement Molly, that's why I said newspapers haven't even had a frontal assault yet.

[Darren]

I was mildly amused by the Age the other day as they were boasting about the increases in numbers of those reading their online edition. I think the number was 1.4 million visitors per month. Sounds impressive until I realised that it's about how many visitors I get to my own blogs each month and is around the same number of visitors that b5media gets to its blogs each month (after just 6 months since launching).

The comparison is perhaps not that fair as we have a global audience and the Age is local - but on the other hand they have years of loyalty to build on and a marketing budget that makes the level of expense that most bloggers have look like nothing.

But if they think they're doing well and hitting the level that a guy sitting in his lounge room on a laptop can do then good luck to them ;-)

[Gnoll110]

Wholly agree, especially with the last bit about technology and people. Technology is just one element of the physical environment we interact with. By its natural it is the element that can, and currently is changing the fastest. The people, and here I also especially mean society, will change to the configuration that suits it best. This is achieved be a combination of economic forces and personal decisions.

So how long do these town criers have left?

[James Farmer]

You're hardly a regular guy sitting in his lounge room with a laptop D-Ro!

I think there are a couple of things worth considering about the site stats, and I'm guessing here) I'd imagine an exceedingly high % are return users as opposed to SE referrals or linkthroughs... mostly down to the pay-per-archive model, and added that to the lack of pinging / semantic structure / SEO it's hardly fair to compare them to a blog network even before you get to the local / global debate.

Which when you do get to is pretty interesting, just ask Benji :) In terms of ads would you rather have a strong localised presence or a splattered Google developed global one? OK, silly question, both are good in their own ways but there is plenty of advertising that you can't measure by clickthroughs.

But you were talking about paper weren't you Cam... yeh, 20, 30, 40 years down the track there might be something to compete with paper but I think, quite rightly, that people aren't getting that stressed about it - established media will just move over to that... it doesn't really disrupt a business model in my book.

What I do think will be interesting is what we get through the different mediums though - you may disagree entirely with this but I've got a itchy feeling that the web is great for breaking news, short items, casual stuff and - obviously - other media formats... whereas our old friend paper lends itself much more to in-depth, extensive, high quality journalism, like one of your books for example. So perhaps, rather than a complete wipe out of one medium, we're going to end up seeing a shift in type of content? Just a thought though.

[Cameron Reilly]

jesus, it didn't take YOU long to drink the MSM kool-aid, did it James? :-)

This whole "oh we'll just move to over to the new technology" argument doesn't hold up for me. Of course you will, but you will also then be contending with the 100 million OTHER content providers on that medium. The ONLY reason newspapers have the readership they do today is because they had an oligopoly on news for 150 years. And those days are gone forever. The question isn't whether or not newspapers will become digital - of course they will - the question is, can their current business model cope with unlimited competition?

[Simon]

Whenever I talk to people about why PR is valuable, I explain that most readers value the role newspapers play in filtering information for them so they end up reading a package of stories that appeals to them. So for PR people to get their clients into that package is very valuable, because readers trust newspapers to bring them relevant stuff. They trust them because newspapers employ skilled and experienced people to discover, present and filter information.

Now Cameron is right that newspapers' delivery mechanism is yet to be challenged. When the newspaper equivalent of an iPod arrives, there will be big challenges.

But what I do not see is alternative emerging to the source of trust that newspapers represent.

Roll your own newspaper style sites have been around for a decade without making a massive impression.

And I am also a firm believer that most people are and will remain passive media consumers. Many, many people are either uncritical (i.e; they are willing to watch what passes for current affairs in Australia) or so time-poor that the idea of sorting their own media is far-fetched. Why look for a blogger when the New York Times has great writers?

So yes, I agree the assault is yet to arrive. But I think it is the aggregating/filtering role that is newspapers' real strength. And I'm yet to see that challenged effectively.

[Bob M]

Cam, I agree with almost all of your comments: that's a rare thing. Last week I was in Melbourne and read The Age (hard copy) every day. I saw the series of ads they were running on the topic of The Age - versus - online stuff. One example purported to show that more people turned to The Age to read job ads than the internet, but in the very tiny small print at the bottom, it said it was based on figures from the year 2000 to 2006.

That made me think that I'd really be more persuaded by figures for just 2006, or at most the past 12 months. I can smell their fear.

[disclosure: I own John Fairfax shares]

[Gnoll110]

James, I'll add to Cameron's comments. Underlying all this was a move from a technological environment was the only cheap non-personal communications was mass produced printing, in a broadcast model. Radio & TV over the last 70 years only paralleled this, in new technologies.

The net (micro computers & high speed comms) change the environment, breaks the trend.

Now small scale publishing to small groups becomes that much more viable. It can compete because it can add high value for the small group with a low entry cost.

This also shatters the demographic that the old broadcast models generated and that were self-maintaining in the old status quo.

The old market was a handful of aggregating/filtering mobs doing it for everyone on an area by area basis. Is this where we will be in 20 or 50 year?

I don't know where we will end up, but I do know it won't be where we were.

[Cameron Reilly]

Simon, I think the perception that newspapers (or TV current affairs shows) are trusted can be challenged. I've seen way too many surveys in recent years that position journalists below used car salesmen on trust scale. And too many of us now have read/watched Michael Moore. We've read Chomsky. We know about The New York Times and Jayson Blair. We know about Dan Rather. We aren't the dumb consumers you might think we are.

And I'm also going to challenge this idea about passive media consumers. I hear that a lot and I think it's bullshit. I think we've been passive for 150 years because we had limited options otherwise.

Simon, why do you think newspaper sales are dropping, TV viewship is dropping? Do you really think people are so dumb that they can't make their own decisions about what they read, watch and listen to?

You know, we make decisions in every other aspect of our lives, I don't think media consumption is so different. And I think the longer the old media continue to believe their own hype, about trust and passivity, the longer they are going to be in free fall.

It's time the media started to treat their audience with more respect.

I'm going to call this the "Naomi Factor".

[Simon]

I agree that there is general distrust and cynicism in the community about the media. Given the trash dished out by much of it, that's reasonable.

But if you look at recent figures, readerships and sales for quality media are on the rise.

And at the same time, 2 million people a night in Australia sit down to watch either ACA or Today Tonight. 35 million Americans watched the latest American Idol. A million people a day are watching Big Brother. 2 million a week watch The Footy Show. 300,000 a day tune in to Alan Jones in Sydney.

Sure plenty of people have read Moore/Chomsky and know about mistakes like Blair/Rather.

I believe that plenty more don't care and that converting them into active participants is a hell of a job.

[Cameron Reilly]

So, Simon, you obviously don't consider News and Fairfax's week-day city papers "quality media"? Because apparently they aren't on the rise. What data are you looking at?

I believe most people watch inane TV or listen to inane radio because
a) they have been programmed to do that for 50 years and
b) most of them are not yet aware of their options

And, the bottom line is, as big as those numbers still are, they are already in smaller than they were five years ago. I'm betting they will be substantially smaller again in another five years.

[Rob Irwin]

And, the bottom line is, as big as those numbers still are, they are already in smaller than they were five years ago. I'm betting they will be substantially smaller again in another five years.

Yes, but does that mean the curve will continue until they disappear? Not automatically, no.

[mick]

It's hard to imagine it. But I'm wondering whether the internet will be here in a few years' time. Not that I think it's about redundancy, rather that this string highlights the increasing speed of fragmentation.

Assuming that blogland will evolve into more BLOGLAND and so on, what will media be - in the aggregated sense? Entertainment media looks like being podcasts etc. Primary sources look like being just that in news media. So.

Does anyone think Jack Anderson has value? Or, for that matter, the collective staff of the NYT or the Nihon Keozai Shimbun?

[Cameron Reilly]

disappear? no. become so small that the economics of the business fundamentally alters so that they are completely unrecognizable? yes.

[Gnoll110]

The individual people & teams have value as content producers.

It's the channels & business models that will be that are up in the air.

Speaking of two people chasing the same lunch.

I picked up the AFR weekend edition (I do this a few time a year, if a front page banner catches my eye). I see that Google looks like a threat to Telstra's Sensis business.

I would post a link to it, but AFR appears to be subsidiary of ‘Dinosaur Press’.

Google begins to map its way around Australia
Google's assault on Sensis and its dominance of the Australian mapping and directory business has begun with the unofficial launch of Google Maps.
The Financial Review 20/05/2006 Cost - $3.30 463 words

[Simon Sharwood]

The source for newspaper circulations being on the up is the latest CAB Audit, which found the broadsheets up a couple of percent.

Add in their stellar web numbers (smh.com.au and theage.com.au and the News Ltd. equivalents) and there is a strong case for their overall audiences to be even higher.

I agree that overall the numbers may be lower, but there is more competition. DVD, Pay TV AND new media have all errupted in the last five years. Claiming all the eyeballs have gone online is optimistic.

Then there's the aggregation question. Today, only TV has sufficient audience to make it worth spending a lot of money on content. Lost, for example, simply won't be made for a micro audience.

Some media consumers will be happy to consume lower-budget stuff, some of which will be excellent quality, some of which will not.

I think of it in terms of mainstream vs. fringe theatre. You can have a great night out at your local theatre company. But to see the form in all its splendour, chance are you'll be heading to the big end of town where the best people and the most resources accrete to reach the largest audience, which nearly always means catering to the lowest common denominator.

That leaves plenty of people willing to look for alternatives. But also plenty happy to trust the big players.

[Cameron Reilly]

Warren Buffett has some interesting points on the subject. Read this.

[Cameron Reilly]

Gnoll, I hear the AFR would actually prefer to charge in tuppenies and farthings but that damned federal government we have just went and moved to dollars without approval!

[Gnoll110]

Simon, we not talking about their overall circulation, but specially the 'hard copy' ink on paper market.

We will see if they can generate the same 'rivers of gold' from their on-line presence, after the ink on paper market stabilizes (when we have symmetrical high-speed board-band to most everyone who wants it). When all the products that come out of this ‘bright future’ are accessible to most everyone who wants them!

I didn’t know where we are going, but I'm sure it's not were we have been.

[Simon Sharwood]

"I didn’t know where we are going, but I'm sure it's not were we have been."

Agreed! Agreed!

"the ink on paper market stabilizes (when we have symmetrical high-speed board-band to most everyone who wants it)."

Unsure, unsure! The lovely thing about newspapers is their simple user interface and low cost. I find it peculiar that to get on board with new media punters are expected to invest in a $1000+ information appliance that delivers a less comfortable experience than today's technology. (Using a mobile for this stuff is a joke.)

That will change. But broadband alone is not the fix. Better devices is the fix. Sony's eReader thingy looks promising, so does UMPC/Origami. Nokia's 770 Tablet is a step in the right direction (but apparently is a total dog).

Once the devices and networks are in place that challenge newspapers convenience AND distribution, things get realy interesting. Now is all pre-fight trash talk, and as "The Man" so amply demonstrates, most of that is pretty funny to watch but mostly inconsequential.

[Cameron Reilly]

Simon, I think we're in agreement over your last few points. The ultimate replacement form facter for newspapers isnt here yet. But I think we all know they are coming.

[Gnoll110]

Simon, you are right, devices etc also effect where the paper market will stabilize.

I was talking specifically about the nets effect on papers! The net will stop being a factor for change in paper fortunes once it becomes ubiquitous. ‘Symmetrical high-speed board-band to most everyone who wants it, at a reasonable cost’, is just me working definition on ubiquitous internet.

When you have multiple factor affecting a market, it become hard to attribute blame ;)

Look at the development of small cars over the last 30 years. How much of their increased popularity comes from increased oil cost, how much from congestion in our cities and how much from other factors?