Tumblelog by Soup.io
Newer posts are loading.
You are at the newest post.
Click here to check if anything new just came in.

May 03 2012

14:55

The newsonomics of Pricing 101

When the price of your digital product is zero, that’s about how much you learn about customer pricing. Now, both the pricing and the learning is on the upswing.

The pay-for-digital content revolution is now fully upon us. Five years ago, only the music business had seen much rationalization, with Apple’s iTunes having bulled ahead with its new 99-cent order. Now, movies, TV shows, newspapers, and magazines are all embracing paid digital models, charging for single copies, pay-per-views, and subscriptions. From Hulu Plus to Netflix to Next Issue Media to Ongo to Press+ to The New York Times to Google Play to Amazon to Apple to Microsoft (buying into Nook this week), the move to paid media content is profound. The imperative to charge is clear, especially as legacy news and magazines see their share of the rapidly growing digital advertising pie (with that industry growing another 20 percent this year) actually decline.

Yes, it’s in part a 99-cent new world order as I wrote about last week (“The newsonomics of 99-cent media”), but there are wider lessons — some curiously counterintuitive — to be learned in the publishing world. Let’s call it the newsonomics of Pricing 101. The lessons here, gleaned from many conversations, are not definitive ones. In fact, they’re just pointers — with rich “how to” lessons found deeper in each.

Let’s not make any mistake this week, as the Audit Bureau of Circulation’s new numbers rolled out and confounded most everyone. Those ABC numbers wowed some with their high percentage growth rates. Let’s keep in mind that those growth numbers come on the heels of some of the worst newspaper quarterly reports issued in awhile. Not only is print advertising in a deepening tailspin, but digital advertising growth is stalled. Take all the ABC numbers you want and tell the world “We have astounding reach” — but if the audience can’t be monetized both with advertising and significant new circulation revenues, the numbers will be meaningless.

When it comes to dollars and sense, pricing matters a lot.

Let’s start with this basic principle: People won’t pay you for content if you don’t ask them to. That’s an inside-the-industry joke, but one with too much reality to sustain much laughter. It took the industry a long time to start testing offers and price points, as The Wall Street Journal and Walter Hussman’s Arkansas Democrat-Gazette provided lone wolf examples.

The corollary to that principle? If you don’t start to charge consumers — Warren Buffett on newspaper pricing: “You shouldn’t be giving away a product that you’re trying to sell.” — then you can’t learn how consumers respond to pricing. Once you start pricing, you can start learning, and adjust.

We can pick out at least nine emerging data points:

  • 33-45 percent of consumers who pay for digital subscriptions click to buy before they ever run into a paywall. That’s right — a third to a half of buyers just need to be told they will have to pay for continuing access, and they’re sold. As economists note that price is a signal of value, consumers understand the linkage. Assign what seems to be a fair price, and some readers pay up, especially if they are exposed to a “warning” screen, letting them know they’ve used up of critical number of “free” views. Maybe they want to avoid the bumping inconvenience — or maybe they just acknowledge the jig’s up.
  • If print readers are charged something extra for digital access, then non-print subscribers are more likely to buy a digital-only sub. Why pay for digital access is the other guys (the print subscribers) are getting it thrown in for “free”? Typically, Press+ sees a 20-percent-plus increase in signups on sites that charge print subscribers something extra. That extra may be just a third or so of the price digital-only subscribers pay (say, $2.95 instead of $6.95), but it makes a difference. Consequently, Press+ says 80-90 percent of its sites charge print subscribers for digital access. The company now powers 323 sites and thus has more access to collective data than any other news-selling source.
  • You can reverse the river, or at least channel it. The New York Times took a year, but figured it out righter than anyone expected. It bundled its Sunday print paper (still an ad behemoth) with digital, making that package $60 or so a year cheaper than digital alone. The result, of course, is that Sunday Times home delivery is up for first time since 2006. It’s not just NYT or the L.A. Times which have embraced Sunday/digital combos. In Minneapolis, the Star Tribune began a similar push in November. Now, of its 18,000 digital-only subscribers, 28 percent have agreed to an add on the Sunday paper, for just 30 cents a week, says CEO Mike Klingensmith (“A Twin Cities turnaround?”). So we see that consumers may well be more agnostic about platform than we thought. Given them an easy one-click way of buying even musty old print, and they will. Irony: If you hadn’t charged them for digital access, you probably wouldn’t have sold them on print.
  • New products create new markets. 70 percent of The Economist‘s digital subscribers are not former print subscribers, says Paul Rossi, managing director and executive vice president for the Americas. That’s surprising in one sense, but not in another. Newspaper company digital VPs will tell you that they’re surprised to see how little overlap there is between their print audience customer bases and their digital ones. The downside here: Many print customers seem not to value digital access that much. The Star Tribune is finding a low take rate of 3 percent of its Sunday-only print subscribers willing to take its digital-access upsell. One lesson: The building of a new digital-mainly audience won’t be easy and will require new product thinking; it’s not that easy just to port over established customers.
  • The all-access bundle must contain multiple consumer hooks. Sure, readers like to get mobile access as well as desktop and print, and maybe some video. Yet some may especially prize the special events or membership perks they are offered, as the L.A. Times is banking on (and start-ups Texas Tribune, MinnPost, and Global Post have applied outside the paywall model). Some will like the extras, like The Boston Globe telling its new 18,000 digital subscribers, as well as its print ones, that they now get “free” Sunday Supper ebooks (“The newsonomics of 100 products a year”). Sports fanatics or business data lovers will find other niches to value — and ones that make the whole bundle worthwhile. Archives — and the research riches they offer — will prove irresistible to some. In 2012, a bundle may offer a half dozen reasons to buy, casting a wide net, with the hope that at least one shiny lure will reel in the customers. By 2013, expect “dynamic, customized offers,” targeting would-be buyers by their specific interests to be more widely in use.
  • While pageviews may drop 10-15 percent with a paywall, unique visitors remain fairly constant. We see the phenomenon of those who do hit a paywall one month coming back in subsequent months, rather than fleeing forever. “It may be the second, third, or fourth month before someone says, ‘I guess I am a frequent visitor here, and I’ll play,’” says Press+’s Gordon Crovitz.
  • Archives find new life. Archives have lived in a corner of news and magazine websites for a long time. They’ve been used, but not highly used or highly monetized. Now, courtesy of the tablet, and a new way to charge, The Economist is finding that 20 percent of its single copy sales are of past issues. Readers will pay for the old in new wrappers, whether back e-issues, or niched ebooks. The all-access offer can be much wider than cross-platform, or multi-device. It can extend across time, from a century of yesterdays to alerts for tomorrow.
  • News media is probably underpriced. Take the high-end Economist. CEO Andrew Rashbass — speaking to MediaGuardian’s Changing Media Summit 2012, in a recommended video — said that a survey of its subscribers showed that a majority didn’t know how much they were paying for the Economist. When pressed to guess, most over-estimated the price. At the Columbia (Missouri) Daily Tribune, an early paywall leader in the middle of America, a recent price increase to $8.99 from $7.99 has so far resulted in no material loss of subscribers. At Europe’s Piano Media, early experience in Slovakia and Slovenia is that price isn’t a big factor, says Piano’s David Brauchli. “Payment for news on the web is really more a philosophical mindset rather than economic. People who are opposed to paying will always opposed to paying and those who see the value of paying don’t mind paying no matter what the price is.” That suggests pricing power. It makes sense that publishers, new to the pricing trade, have approached it gingerly. Yet the circulation revenue upside may well be substantial.
  • Bundle or unbundle — what’s the right way? Mainly, we don’t know yet, and the answer may be different for differing audience segments. The Economist started with print being a higher price than a separate digital sub. Then it raised the digital price to match that of print — to assert digital value. It now offers all-access: one price gets you both. Next up: You can buy either print or digital for the same price, but if you want both, you’ll pay more. It’s an evolution of testing, and so far, it’s been an upward one.

Overall, this is a revolution in more than pricing. It’s a revolution in thinking and, really, publisher identity.

The Boston Globe’s Jeff Moriarty sums it up well, as his company aims (as has the Financial Times before it: “The newsonomics of the FT as an internet retailer”) to emulate a little digital-first company called Amazon:

I think overall publishers have to start thinking more like e-commerce companies. More like Amazon. You can’t just throw up a wall or an app and expect it to just sell itself. We’re still building that muscle here at the Globe, and some of our colleagues in the industry are even farther along. We have extensive real-time and daily analytics and are employing multivariate testing to try offers and designs to refine the experience that works best for each type of user.

Photo by Jessica Wilson used under a Creative Commons license.

May 05 2011

14:30

The newsonomics of the new ABCs of journalism

Editor’s Note: Each week, Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of news for the Lab.

This week brought us the long-worked-on new counting metrics for American daily newspaper journalism.

ABC, the Audit Bureau of Circulations, has long provided The Number.

The Number — really The Numbers, a daily number and a Sunday number — have been the reader numbers dailies measured themselves by, twice a year, spring and fall. Who’s up, who’s down, who’s number one — it’s really a horse-race number, simple to report by the publishers and simple to report by those covering the industry. Of course, The Number has been in horrific decline. Take a look at the State of the News Media circulation chart (a third of the way down a long page) and you can see 15 straight reporting periods in single-digit decline, tracked since 2003. Clearly, circulation is still dropping, though it will take the next six-month comparisons, using these new metrics, to establish new benchmarking.

That’s one of the reasons The Number is gone — optics do count — but more importantly the nature of ad buying has changed dramatically in that same period. Newspaper ad revenues have been halved while online ad revenues will approximate newspaper ad revenues this year or next. While halved to $25 billion annually or so, newspapers, with the new ABCs, have made a directional shift to satisfying those advertisers; recall that even the New York Times, the digital leader with 25 percent of its ad revenues being digital, still depends on the print for three-quarters of its dollars.

So The Number is all but gone. Sure, there’s still “Total Circulation,” and that’s led some to do apples-to-apples comparison to the last set of numbers from last fall. It’s not a fruitful exercise, given the magnitude of the changes.

“ABC and the industry never intended that ‘total circulation’ to be a metric of success,” John Murray, the Newspaper Association of America’s vice president of audience development told me this week.

That’s because there is a now a whole raft of numbers, a new set collected by publishers, verified by ABC and used, over time, quite differently by advertisers. Trying to understand the difference between the old report and the new report is best done either dead sober or after a six-pack; anywhere in between may leave you wanting. I appreciate Poynter’s Rick Edmonds thorough picking through the changes, the new lexicon and taxonomy, and I won’t repeat his observations.

What’s significant to me about the changes are two big things, one theoretical and one practical, and therein, I think, lie the newsonomics of the new ABC report.

The big picture recognition here, as publishers and major advertisers have wrestled the new system to the ground, is that the age of simple mass is gone. Counting is increasingly about niche. How many of the readers are paid readers of print? How many read e-editions, and, of those, how many read replicas and how many read dynamic products? How many readers get free, but requested, packets of news and ads, and how many readers get the packets because they’ve been targeted (affluent households) just because of where they live? And there’s more nuance than that.

Just as the digital marketing world has increasingly provided agencies and advertisers with a trove of audience data, the print world is slowly responding. While advertisers can only track these differing print niches with differing coupon codes, or a spectrum of differing 1-800 call-in numbers, print at least can be niched in some ways, even though it doesn’t offer the intensive harvesting of data that digital does. Of course, the various e-alternatives, from “online” to tablet to smartphone, are offering advertisers the ability to say “I’ll take this, but not that” and to mix and match print and digital buying as never before. While advertisers could do some picking and choosing before, they were often flying blind and these new categories of circulation counting — verified circulation and branded editions to “requested” or “targeted” delivery — give them better data on which to make those choices. Consider the data advertisers get with this first report just the beginning of new sets of metrics to come.

On a practical level, we can see a couple of fundamental ways the new ABCs will impact the marketplace:

  • Sunday and preprints: Sunday Select is the flavor of the age, as companies from Gannett to McClatchy to Belo eagerly make up for declining paid Sunday circulation with packets of news and ads delivered to non-payers. “Paid is no longer the determinant of value,” says Murray — and that’s a huge change for an industry that long differentiated its ad appeal on the basis of paying customers. If readers opt in (“requested”), that’s a big plus for advertisers. Why? That shows “engagement,” that magic word all online publishers seek. Opt-out (or “targeted”) denotes a little lesser value, but since those being targeted are higher-demographic households, advertisers still like to reach them. In the new stats, though, they’ll be able to see how many paid, how many requested and how many targeted editions got distributed on Sunday. Some will try to differentiate results among the three. I asked John Murray where advertisers are at in tracking the differing results among paid, requested, and targeted, on a scale from one to ten. “I’d put them at 2s and 9s,” he told me, explaining with a couple of numbers how much in transition we are. Some — think Best Buy, for instance — are 9s, trying to track and compare everything, including differing print deliveries. Others are 2s, still essentially buying mass, but planning on doing more tracking over time.

Sunday is huge for newspapers, as a third or more of their revenue is driven by that one day. And preprints, or the Sunday circulars — all those glossy colorful ad inserts from the big box stores — are now make or break for that Sunday take. “Media [reading] habits are changing faster than ad habits,” says Randy Novak, a Gatehouse veteran and now vice president of industry research and relations for Geomentum, a local focused ad agency. “People like to touch those preprints.”

Let’s complete the value circle here. Who loves those preprints? Twenty-five to 44-year-old women, says Murray, and they are coveted consumers. Consider Sunday and its preprints to be the biggest raison d’etre of the new ABCs.

Further, add in a Wednesday or a Thursday midweek market day, says Novak, and you’ve got a newer, winning formula. We begin to see further definition of a strategy that is emerging at daily newspaper companies. That strategy: Sunday print/daily digital, especially tablet, as a coming subscription/ad satisfying program coming to a city near you by 2013-14 (“The newsonomics of Sunday paper/daily tablet subscriptions“). Or Sunday/Wednesday print, and the rest digital. We’re headed there, I believe, as the economics of advertising and the emerging reading habits of news readers merge to forge new revenue and cost-saving plans. (One thing to watch closely in the next sets of ABC reports: How well Sunday print paid is doing.)

  • Proving — and disproving — e-edition value: E-replica editions have been used by some papers to artificially pump up those sagging circulation numbers (“How much can we trust e-edition numbers?“). Publishers have told me privately that while they packaged — and counted — those replica products, only a small percentage of readers actively used them. Starting with the ABC fall report, there will be some effort to count usage — a nod to advertisers who figured out the scheme. In addition, we’re already seeing “replica” and “non-replica” parsed out, which should help separate out the e-chaff. More interestingly, as we see increasingly nuanced reporting of specific tablet and smartphone usage, we’ll be getting an emerging picture both of how news is really being read and how marketers can effectively read readers via these new platforms.

Just as we’re moving away from the One Number for print, we’re emerging from a time of counting those rudimentary uniques and pageviews online, with time spent digitally the big issue of the day for all publishers, but especially for those trying to sell those digital subscriptions. Where we may be headed: Time on Brand, as the biggest — and/or best — news brands try to satisfy readers, and bring along marketers to serve them — on a changing-through-day array of devices.

November 22 2010

19:00

How much can we trust e-edition numbers? Depends on the paper

The latest numbers from the Audit Bureau of Circulations, tracking from March 2009 to September 2010, show a major proliferation in the number of e-editions reported by newspapers. Nearly 450 papers currently have weekday e-editions, which tallies to over 2 million subscribers and a 47-percent increase since this time last year.

As print circulation falls, e-editions swell in numbers. Not so startling. But the data can be misleading: Ballooning e-edition numbers don’t necessarily point to wholesale reader rejection of print, or even widespread usage of e-editions. For some local newspapers, if you want a print subscription, newspapers make it very financially agreeable — and in some cases give you no choice — to throw on an e-edition subscription as well.

Look no further than some of the smaller-market papers that cracked paidContent’s top-25 chart of newspaper e-edition subscriptions. Like, say, number 18, The Bend Bulletin, which grew from 1,108 e-edition subscriptions to 24,611 between Sept. 2009 and Sept. 2010. That’s an increase of over 2,000 percent (!) for a company that doesn’t circulate more than 35,000 weekday papers. But local Bulletin readers don’t even have the option of a print-only subscription, according to the paper’s website: It’s an e-edition or bust.

Or take number 25, The Schenectady Gazette. After launching a free site three years ago, the paper put up a paywall 18 months later and began offering a weekly print-plus-e-edition subscription package for one penny more per day than the print-only option — $3.99 versus $4.00 a week. You’d be hard pressed to find a better way to spend 52 cents a year.

Around the time the Gazette changed its subscription offering, weekly paid print circulation sat at 45,421. By September 2010, that number jumped by 16,052, nearly 35 percent. In roughly that same period, Gazette e-edition circulation increased by 17,796. The paper’s e-edition actually generates ad revenue by proving to potential advertisers that readers are local, Gazette general manager Dan Beck told me. “We have created, in an odd way, a more valuable reader to our advertisers,” Beck said. “We know they are our readers and they are local, they’re from here.”

“My overall sense is that this is more about marketing and new, more favorable metrics for newspaper companies than any kind of dramatic change in reading habits,” says Newsonomics author and Lab contributor Ken Doctor. Indeed, it’s difficult to tell whether e-edition subscriptions equate in any way to usage. Doctor cites “the snowbird reader of a northern paper” as one possible explanation.

The traditional e-edition essentially replicates the print product in digital format; ABC numbers cover these replicas, plus non-replica e-editions, like The Wall Street Journal and the soon-to-be-paywalled New York Times. ABC tracking includes online-only and Kindle subscriptions, which exist on a different account than print subscriptions, and products like TimesReader or GlobeReader as well.

All but two of the top 25 saw percentage increases in that September-to-September period, a phenomenon Doctor partly attributes to the slew of subscription bundles that surfaced over past year. He suggests the conventional e-edition isn’t attractive enough to compete with tablet versions as they continue to improve: “It’s a small, niche product, useful to those who like the newspaper in the format of the print paper. As tablets offer greater choice as digital news reading devices, e-editions will probably wither.”

We’ll see in March 2011, when ABC begins itemizing its e-edition circulation report by weekly subscription versus single-issue purchases, university subscriptions, and mobile readership.

May 04 2010

14:00

Moderating declines: Parsing the NAA’s spin on newspaper circ data

Newspapers could borrow a line from a recent Dilbert comic strip: “We’ve been doing great since we redefined success as a slowing of failure.” Or perhaps it was the other way around, and Dilbert creator Scott Adams was inspired to write that line in a recent strip by the inventive terminology of newspaper executives describing “sequential improvement” and “moderating declines” in their revenue trends despite continuing losses in the double digit range.

Currently, the industry is reporting first-quarter earnings, and last week the Audit Bureau of Circulations released unaudited “publisher’s statements” reporting paid circulation for the six months ending March 31. The numbers are down, but the spin is up.

On the circulation front, the Audit Bureau of Circulations reported that circulation fell 8.7 percent on weekdays and 6.5 percent on Sundays, among newspapers filing publisher’s statements. This compares with drops of 10.6 percent weekdays and 7.6 percent Sundays for the prior six-month period, enough of an improvement for Newspaper Association of America CEO John Sturm to declare that “the data indicates the declines are moderating.”

Actually, it’s hard to discern real moderation in the rate of decline. The losses in the most recent period are indeed a bit less severe than those in the prior (Sept. 30) period, but they are worse than the drop in the period before that, or in any previous period. If we ignore the Sept. 30 data as an outlier, we actually have a trend that’s been worsening steadily for the last six years:

Nothing about that final uptick indicates that it’s a reversal of the trend — it would take two or three periods of “improvement” in the form of “moderating declines” to make that a valid conclusion. In fact, both of the upticks in the trendline disappear if we take the statistically reasonable step of averaging spring and fall six-month circulation changes into annual figures and graphing those:

Moreover, viewed in long-term context, this latest minor slowdown in the rate of decline disappears entirely when newspaper circulation is viewed in the context of population: Since 1945, the number of papers sold per 100 households has dropped steadily, declining in 61 of the last 64 years.

(The circulation numbers on which this chart is based come from Editor & Publisher via NAA; E&P hasn’t released its Yearbook with a 2009 figure, so 2009 is my estimate based on the last two ABC cycles and estimated census households.)

It’s also quite possible that the uptick is entirely the result of some of the new options newspapers have in counting their circulation. Some of the declines of the past few years have come from ditching distribution in unprofitable outlying areas, and cutting back on “third-party” programs in which advertisers were persuaded to pay for bulk distribution, free to recipients, at community events or door-to-door in targeted areas. The value of this circulation was always questionable, but now ABC rules are permitting substitution of new forms of questionable circulation.

Take, for instance, the Bend (Ore.) Bulletin, where weekday circulation grew 34.3 percent. How? Since Jan. 1, with ABC approval, the paper has been counting e-subscriptions sold to current print subscribers for an extra 50 cents per month. As long as the subscriber can choose to opt in or out of the added digital subscription, the e-subscription counts as one paid subscription in addition to the printed one, even if the customer never accesses it. Applying this stratagem for only three months of six-month reporting period, the Bulletin tacked 12,462 weekday e-subs to its “core” print circulation of 29,072 (which is actually down by more than 1,000 from 30,155 a year ago). And next time around, counting the e-subs for six full months, it expects to report circulation of about 54,000.

How much of that is going on, and to what extent is it responsible for that uptick? I haven’t delved into the data, but Paid Content did, and reported that e-edition circulation was up significantly: the digital editions of the top 25 newspaper e-editions rose 40 percent, from to 1,363,212, versus 973,721 a year earlier.

There’s are other questionable figures being circulated, as well. In his statement on the ABC data, Sturm also cited readers-per-copy data that appears, at first glance, to mitigate the downward trend in copies sold: “Newspaper print products are also finding their way into more people’s hands, with readers-per-copy increasing by 7.5 percent in just the last three years to 3.3 adults on average, according to a recent analysis from Scarborough Research and Newspaper National Network LLP.” Here’s the graph:

Missing from this statement is the important qualifying statement that the Scarborough study applies to 25 selected “top markets,” not to all newspapers.

For its report (PDF download), Scarborough chose the 25 largest newspapers omitting “national” newspapers (New York Times, Wall Street Journal, and USA Today), as well as omitting papers in the midst of major circulation pattern transitions (Denver Post, Detroit Free Press, Philadelphia Inquirer, San Jose Mercury-News, Seattle Times and Seattle Post-Intelligencer).

In response to email inquiries, NAA’s research director Jim Conaghan and communications chief Jeff Sigmund defended Sturm’s statement. “He correctly cites the Scarborough research,” Conaghan wrote. “John Sturm’s statement references research conducted by Scarborough which was based on an analysis of the top 25 markets,” Sigmund wrote. But Sturm’s statement leaves out the important qualifier of the 25 markets. Conaghan also wrote to me: “You need to carefully read what is contained in the Scarborough report. Large markets/papers, survey data. The old NAA estimates were derived by a different method, and would represent total U.S.” By “old NAA estimates” he meant a 2007 report available at the NAA site that found 2.128 readers per copy weekdays and 2.477 on Sunday. (That study, in a footnote, discounts the validity of the Sunday number, stating: “Projection relatively unstable for Sunday RPC. Use with caution.”

Now, as that quote suggests, readers-per-copy (a.k.a. the “pass-along rate”) is a notoriously difficult thing to measure. But it has been tracked by Scarborough and others for a very long time and has been pretty consistently cited (and drilled into the heads of newspaper advertising representatives) as being around 2.3, plus or minus a point or two. This allowed salespeople for a 30,000-circulation newspaper to tell retailers that readership was actually about 75,000. The readers-per-copy factoid was included for years in NAA’s own “Facts About Newspapers,” a vest-pocket sized booklet of data distributed annually to advertisers and publishers. In 2000, Facts About Newspapers claimed 2.1 readers per copy, and 2.2 on Sundays. In 2004, it was 2.3 on weekdays, 2.4 on Sundays. In 2007, as cited above, it was 2.1 weekdays and (with a grain of salt in the NAA footnote) 2.5 on Sundays. When I started in the business, in the late 1970s, I recall that it was 2.6. In 1983, Scarborough and Simmons both came up with about 2.7, but that was noted as seeming to be on the high side. The average U.S. household is about 2.57 people, another reason why any reader-per-copy finding above that level is questionable. I think Conaghan is right on the money to say that Sturm’s claim of 3.3 can not be applied to any markets outside the those selected 25 and that reality is still in range of 2.2 to 2.5 as it has been for 50 years.

Sturm also pointed to the online newspaper audience, stating: “The latest Nielsen Online data found that newspaper websites attracted a record 74.4 million unique visitors per month on average in the first quarter of 2010 — more than one-third (37 percent) of all Internet users.” Left unsaid: the monthly UV average for this quarter was probably boosted in February by traffic related to the Olympics. The February UV count was 76.1 million, an all-time high. In March, with 10 percent more days than February, UV’s were 5 percent lower at 72.1 million.

But everyone knows by now that UVs are not a very good indicator, and “time spent on site” is what counts, at least if you’re trying to sell advertising. By that score, Q1 did not shape up very well for newspapers: in January, the average visitor spent 33:09 minutes at newspaper sites, in February, 29:06 minutes, and in March 32.21 minutes. These are three of the four shortest attention spans recorded by Nielsen Online for NAA since January 2004 (with the caveat that data before June 2009, which showed significantly higher times spent, was based on a different survey sample and can’t be compared with later stats).

Here’s the trend line for attention, or time spent, at newspaper websites since the June 2009 methodology change.

When that trend starts to demonstrate clear and strong “sequential improvement,” newspapers will have something to shout from the rooftops.

January 07 2010

19:11

Keeping Martin honest: Checking on Langeveld’s predictions for 2009

[A little over one year ago, our friend Martin Langeveld made a series of predictions about what 2009 would bring for the news business — in particular the newspaper business. I even wrote about them at the time and offered up a few counter-predictions. Here's Martin's rundown of how he fared. Up next, we'll post his predictions for 2010. —Josh]

PREDICTION: No other newspaper companies will file for bankruptcy.

WRONG. By the end of 2008, only Tribune had declared. Since then, the Star-Tribune, the Chicago Sun-Times, Journal Register Company, and the Philadelphia newspapers made trips to the courthouse, most of them right after the first of the year.

PREDICTION: Several cities, besides Denver, that today still have multiple daily newspapers will become single-newspaper towns.

RIGHT: Hearst closed the Seattle Post-Intelligencer (in print, at least), Gannett closed the Tucson Citizen, making those cities one-paper towns. In February, Clarity Media Group closed the Baltimore Examiner, a free daily, leaving the field to the Sun. And Freedom is closing the East Valley Tribune in Mesa, which cuts out a nearby competitor in the Phoenix metro area.

PREDICTION: Whatever gets announced by the Detroit Newspaper Partnership in terms of frequency reduction will be emulated in several more cities (including both single and multiple newspaper markets) within the first half of the year.

WRONG: Nothing similar to the Detroit arrangement has been tried elsewhere.

PREDICTION: Even if both papers in Detroit somehow maintain a seven-day schedule, we’ll see several other major cities and a dozen or more smaller markets cut back from six or seven days to one to four days per week.

WRONG, mostly: We did see a few other outright closings including the Ann Arbor News (with a replacement paper published twice a week), and some eliminations of one or two publishing days. But only the Register-Pajaronian of Watsonville, Calif. announced it will go from six days to three, back in January.

PREDICTION: As part of that shift, some major dailies will switch their Sunday package fully to Saturday and drop Sunday publication entirely. They will see this step as saving production cost, increasing sales via longer shelf life in stores, improving results for advertisers, and driving more weekend website traffic. The “weekend edition” will be more feature-y, less news-y.

WRONG: This really falls in the department of wishful thinking; it’s a strategy I’ve been advocating for the last year or so to follow the audience to the web, jettison the overhead of printing and delivery, but retain the most profitable portion of the print product.

PREDICTION: There will be at least one, and probably several, mergers between some of the top newspaper chains in the country. Top candidate: Media News merges with Hearst. Dow Jones will finally shed Ottaway in a deal engineered by Boston Herald owner (and recently-appointed Ottaway chief) Pat Purcell.

WRONG AGAIN, but this one is going back into the 2010 hopper. Lack of capital by most of the players, and the perception or hope that values may improve, put a big damper on mergers and acquisitions, but there should be renewed interest ahead.

PREDICTION: Google will not buy the New York Times Co., or any other media property. Google is smart enough to stick with its business, which is organizing information, not generating content. On the other hand, Amazon may decide that they are in the content business…And then there’s the long shot possibility that Michael Bloomberg loses his re-election bid next fall, which might generate a 2010 prediction, if NYT is still independent at that point.

RIGHT about Google, and NOT APPLICABLE about Bloomberg (but Bloomberg did acquire BusinessWeek). The Google-NYT pipe dream still gets mentioned on occasion, but it won’t happen.

PREDICTION: There will be a mini-dotcom bust, featuring closings or fire sales of numerous web enterprises launched on the model of “generate traffic now, monetize later.”

WRONG, at least on the mini-bust scenario. Certainly there were closings of various digital enterprises, but it didn’t look like a tidal wave.

PREDICTION: The fifty newspaper execs who gathered at API’s November Summit for an Industry in Crisis will not bother to reconvene six months later (which would be April) as they agreed to do.

RIGHT. There was a very low-key round two with fewer participants in January, without any announced outcomes, and that was it. [Although there was also the May summit in Chicago, which featured many of the same players. —Ed.]

PREDICTION: Newspaper advertising revenue will decline year-over-year 10 percent in the first quarter and 5 percent in the second. It will stabilize, or nearly so, in the second half, but will have a loss for the year. For the year, newspapers will slip below 12 percent of total advertising revenue (from 15 percent in 2007 and around 13.5 percent in 2008). But online advertising at newspaper sites will resume strong upward growth.

WRONG, and way too optimistic. Full-year results won’t be known for months, but the first three quarters have seen losses in the 30 percent ballpark. Gannett and New York Times have suggested Q4 will come in “better” at “only” about 25 percent down. My 12 percent reference was to newspaper share of the total ad market, a metric that has become harder to track this year due to changes in methodology at McCann, but the actual for 2009 ultimately will sugar out at about 10 percent.

PREDICTION: Newspaper circulation, aggregated, will be steady (up or down no more than 1 percent) in each of the 6-month ABC reporting periods ending March 31 and September 30. Losses in print circulation will be offset by gains in ABC-countable paid digital subscriptions, including facsimile editions and e-reader editions.

WRONG, and also way too optimistic. The March period drop was 7.1 percent, the September drop was 10.6 percent, and digital subscription didn’t have much impact.

PREDICTION: At least 25 daily newspapers will close outright. This includes the Rocky Mountain News, and it will include other papers in multi-newspaper markets. But most closings will be in smaller markets.

WRONG, and too pessimistic. About half a dozen daily papers closed for good during the year.

PREDICTION: One hundred or more independent local startup sites focused on local news will be launched. A number of them will launch weekly newspapers, as well, repurposing the content they’ve already published online. Some of these enterprises are for-profit, some are nonprofit. There will be some steps toward formation of a national association of local online news publishers, perhaps initiated by one of the journalism schools.

Hard to tell, but probably RIGHT. Nobody is really keeping track of how many hyperlocals are active, or their comings and goings. An authoritative central database would be a Good Thing.

PREDICTION: The Dow Industrials will be up 15 percent for the year. The stocks of newspaper firms will beat the market.

RIGHT. The Dow finished the year up 18.8 percent. (This prediction is the one that got the most “you must be dreaming” reactions last year.

And RIGHT about newspapers beating the market (as measured by the Dow Industrials), which got even bigger laughs from the skeptics. There is no index of newspaper stocks, but on the whole, they’ve done well. It helps to have started in the sub-basement at year-end 2008, of course, which was the basis of my prediction. Among those beating the Dow, based on numbers gathered by Poynter’s Rick Edmonds, were New York Times (+69%), AH Belo (+164%), Lee Enterprises (+746%), McClatchy (+343%), Journal Communications (+59%), EW Scripps (+215%), Media General (+348%), and Gannett (+86%). Only Washington Post Co. (+13%) lagged the market. Not listed, of course, are those still in bankruptcy.

PREDICTION: At least one publicly-owned newspaper chain will go private.

NOPE.

PREDICTION: A survey will show that the median age of people reading a printed newspaper at least 5 days per week is is now over 60.

UNKNOWN: I’m not aware of a 2009 survey of this metric, but I’ll wager that the median age figure is correct.

PREDICTION: Reading news on a Kindle or other e-reader will grow by leaps and bounds. E-readers will be the hot gadget of the year. The New York Times, which currently has over 10,000 subscribers on Kindle, will push that number to 75,000. The Times will report that 75 percent of these subscribers were not previously readers of the print edition, and half of them are under 40. The Wall Street Journal and Washington Post will not be far behind in e-reader subscriptions.

UNKNOWN, as far as the subscription counts go: newspapers and Kindle have not announced e-reader subscription levels during the year. The Times now has at least 30,000, as does the Wall Street Journal (according to a post by Staci Kramer in November; see my comment there as well). There have been a number of new e-reader introductions, but none of them look much better than their predecessors as news readers. My guess would be that by year end, the Times will have closer to 40,000 Kindle readers and the Journal 35,000. During 2010, 75,000 should be attainable for the Times, especially counting all e-editions (which include the Times Reader and 53,353 weekdays and 34,435 Sundays for the six months ending Sept. 30.

PREDICTION: The advent of a color Kindle (or other brand color e-reader) will be rumored in November 2009, but won’t be introduced before the end of the year.

RIGHT: plenty of rumors, but no color e-reader, except Fujitsu’s Flepia, which is expensive, experimental, and only for sale in Japan.

PREDICTION: Some newspaper companies will buy or launch news aggregation sites. Others will find ways to collaborate with aggregators.

RIGHT: Hearst launched its topic pages site LMK.com. And various companies are working with EVRI, Daylife and others to bring aggregated feeds to their sites.

PREDICTION: As newsrooms, with or without corporate direction, begin to truly embrace an online-first culture, outbound links embedded in news copy, blog-style, as well as standalone outbound linking, will proliferate on newspaper sites. A reporter without an active blog will start to be seen as a dinosaur.

MORE WISHFUL THINKING, although there’s progress. Many reporters still don’t blog, still don’t tweet, and many papers are still on content management systems that inhibit embedded links.

PREDICTION: The Reuters-Politico deal will inspire other networking arrangements whereby one content generator shares content with others, in return for right to place ads on the participating web sites on a revenue-sharing basis.

YES, we’re seeing more sharing of content, with various financial arrangements.

PREDICTION: The Obama administration will launch a White House wiki to help citizens follow the Changes, and in time will add staff blogs, public commenting, and other public interaction.

NOT SO FAR, although a new Open Government Initiative was recently announced by the White House. This grew out of some wiki-like public input earlier in the year.

PREDICTION: The Washington Post will launch a news wiki with pages on current news topics that will be updated with new developments.

YES — kicked off in January, it’s called WhoRunsGov.com.

PREDICTION: The New York Times will launch a sophisticated new Facebook application built around news content. The basic idea will be that the content of the news (and advertising) package you get by being a Times fan on Facebook will be influenced by the interests and social connections you have established on Facebook. There will be discussion of, if not experimentation with, applying a personal CPM based on social connections, which could result in a rewards system for participating individuals.

NO. Although the Times has continued to come out with innovative online experiments, this was not one of them.

PREDICTION: Craigslist will partner with a newspaper consortium in a project to generate and deliver classified advertising. There will be no new revenue in the model, but the goal will be to get more people to go to newspaper web sites to find classified ads. There will be talk of expanding this collaboration to include eBay.

NO. This still seems like a good idea, but probably it should have happened in 2006 and the opportunity has passed.

PREDICTION: Look for some big deals among the social networks. In particular, Twitter will begin to falter as it proves to be unable to identify a clearly attainable revenue stream. By year-end, it will either be acquired or will be seeking to merge or be acquired. The most likely buyer remains Facebook, but interest will come from others as well and Twitter will work hard to generate an auction that produces a high valuation for the company.

NO DEAL, so far. But RIGHT about Twitter beginning to falter and still having no “clearly attainable” revenue stream in sight. Twitter’s unique visitors and site visits, as measured by Compete.com, peaked last summer and have been declining, slowly, ever since. Quantcast agrees. [But note that neither of those traffic stats count people interacting with Twitter via the API, through Twitter apps, or by texting. —Ed.]

PREDICTION: Some innovative new approaches to journalism will emanate from Cedar Rapids, Iowa.

YES, as described in this post and this post. See also the blogs of Steve Buttry and Chuck Peters. The Cedar Rapids Gazette and its affiliated TV station and web site are in the process of reinventing and reconstructing their entire workflow for news gathering and distribution.

PREDICTION: A major motion picture or HBO series featuring a journalism theme (perhaps a blogger involved in saving the world from nefarious schemes) will generate renewed interest in journalism as a career.

RIGHT. Well, I’m not sure if it has generated renewed interest in journalism as a career, but the movie State of Play featured both print reporters and bloggers. And Julie of Julie & Julia was a blogger, as well. [Bit of a reach there, Martin. —Ed.]

[ADDENDUM: I posted about Martin's predictions when he made them and wrote this:

I’d agree with most, although (a) I think there will be at least one other newspaper company bankruptcy, (b) I think Q3/Q4 revenue numbers will be down from 2008, not flat, (c) circ will be down, not stable, (d) newspaper stocks won’t beat the market, (e) the Kindle boom won’t be as big as he thinks for newspapers, and (f) Twitter won’t be in major trouble in [2009] — Facebook is more likely to feel the pinch with its high server-farm costs.

I was right on (a), (b), and (c) and wrong on (d). Gimme half credit for (f), since Twitter is now profitable and Facebook didn’t seem too affected by server expenses. Uncertain on (e), but I’ll eat my hat if “75 percent of [NYT Kindle] subscribers were not previously readers of the print edition, and half of them are under 40.” —Josh]

Photo of fortune-teller postcard by Cheryl Hicks used under a Creative Commons license.

Older posts are this way If this message doesn't go away, click anywhere on the page to continue loading posts.
Could not load more posts
Maybe Soup is currently being updated? I'll try again automatically in a few seconds...
Just a second, loading more posts...
You've reached the end.

Don't be the product, buy the product!

Schweinderl