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

December 22 2010

18:00

Martin Langeveld: Predicting more digital convergence and an AP clearinghouse, coming in 2011

Editor’s Note: We’re wrapping up 2010 by asking some of the smartest people in journalism what the new year will bring.

As we draw to a close, it’s time for this year’s predictions from Martin Langeveld, which are the closest thing we have to a tradition around here. We just posted a look back at Martin’s predictions for 2010, a year ago. Here’s what he foresees for 2011; check back next year to see how he did.

Digital convergence: News, mobile, tablets, social couponing, location-based services, RFID tags, gaming. My geezer head spins just thinking about all this, but look: All these things will not stay in separate silos. Why do you think AOL invested $50 million or more launching Patch in 500 markets, without a business model that makes sense to anyone? What’s coming down the pike is new intersections between all of these digital developments, and somehow, news is always in the picture because it’s at the top of people’s lists of content needs, right after email and search. There are business opportunities in tying all of these things together, so there are opportunities for news enterprises to be part of the action. Some attempts to find synergies will work, and some won’t.

But imagine for a moment: personalized news delivered to me on my tablet or smartphone, tailored to my demographics, preferences, and location; coupon offers and input from my social network, delivered on the same basis; the ability to interact with RFID tags on merchandise (and on just about anything else); more and more ability not only to view ads but to do transactions on tablets and phones — all of these delivered in a entertaining interfaces with gaming features (if I like games) or not (if I don’t). In other words: news delivered to me as part of a total environment aware of my location, my friends, my interests and preferences, essentially in a completely new online medium — not a web composed of sites I can browse at my leisure, but a medium delivered via a device or devices that understand me and understand what I want to know, including the news, information and commercial offers that are right for me. All of this is way too much to expect in 2011, but as a prediction, I think we’ll start to see some of the elements begin to come together, especially on the iPad.

The Associated Press clearinghouse for news. Lots of questions here: Will be it nonprofit or for-profit? Who will put up the money? Who will be in charge of it? What will it actually do? It will probably take all year to get the operation organized and launched, but I’m going to stick with the listing of opportunities I outlined when news of the clearinghouse broke. I continue to believe that the clearinghouse concept has the potential to transform the way that news content is generated, distributed and consumed. (Disclosure: I’m working on a project with the University of Missouri to explore potential business models enabled by news clearinghouses.)

Embracing real digital strategies. Among newspaper companies, Journal Register will continue to point the way: CEO John Paton ardently evangelizes for digital-first thinking — read his presentation to the recent (Nieman-cosponsored) INMA Transformation of News Summit, if you haven’t seen it. Is there another newspaper company CEO who agrees with Paton’s mantra, “Be Digital First and Print Last”? I doubt it, because what it means, in Patton’s words, is that you “put the digital people in charge, and stop listening to the newspaper people.” Most newspaper groups pay lip service to “digital first,” but in reality they’re focused on the daily print edition. And that’s why audience attention will continue to go to new media unencumbered by print, like Huffington Post, the Daily Beast, Patch, Gawker Media, and hosts of others. So for a prediction: Journal Register will outsource most of its printing, sell most of its real estate, bring the audience into its newsrooms with more news cafes like their first one in Torrington, Conn. It will announce by year end that 25 percent of its revenue is from digital sources. It will also launch online-only startups in cities and towns near its existing markets, perhaps with niche print spinoffs. And finally, toward the end of 2011, we’ll see some reluctant and tentative emulation of Paton’s strategies among a few other newspaper groups.

Newspaper advertising revenue. An extrapolation of the 2010 trend (see my 2010 scorecard) would mean 2011 quarters of, say gains of 2 percent, 4 percent, 6 percent and 8 percent. But for that to happen, marketers would have to decide, during Q4 of 2011, to direct 8 percent more money into advertising in a medium that continues to report “strategic” cuts in press runs and paid print circulation, that is not finding fresh eyeballs online, that has an audience profile getting older every year, and that has done little R&D or innovation to discover a digital future for itself. With sexy new opportunities to advertise on tablets and smartphones coming along daily, why would any brand, retailer, or advertising agency be looking to spend more in print? My prediction is for a very flat year, with the quarterly totals (for print plus online revenue) coming in at Q1: +1.5%, Q2: +2.0%, Q3: no change and Q4: -3%. That final quarter will revert to negative territory primarily because of major shifts in retail budgets to tablet and smartphone platforms and to digital competitors like Groupon.

Newspaper online ad revenue. This has been a bright spot in 2010, with gains of 4.9 percent, 13.9 percent, and 10.7 percent so far. Assume another gain in Q4. But there are several problems. First, at most newspapers a big fraction of so-called online revenue is hitched to print programs with online components, upsells, added values, or bonuses. So there’s no way to tell whether the reported numbers are real, representing actual gains purely in ads purchased on web sites, whether there’s a lot of creative accounting going on to make the online category look better than it actually is, or whether it would even exist without the print component. Secondly, there’s a lot of new competition at the local level for dollars that retailers earmark for web marketing. Groupon, alone, will do close to $1 billion in revenue this year, compared with about $3 billion total online revenue for all newspapers combined. Add the “Groupon clones” like LivingSocial, and the social couponing business is probably already at about 50 percent of newspaper online revenue, and could well pass it in 2011, very much at newspapers’ expense. That’s why I predict newspaper online revenue will be: Q1: +5.0 percent, Q2: +3.0 percent, Q3: no change and Q4: no change.

Newspaper circulation. The trendline here has been down, down, down, every six-month reporting period ending March 31 and September 30. Complicating the picture: newspapers have been selling combo packages, ABC-qualified, where a single subscriber counts for two because they are buying (sometimes on a forced basis) both a 7-day print subscription and a facsimile digital edition. Lots of inflated and un-real circulation will show up in the 2011 numbers. But if we look at print circulation alone, which ABC will continue to break out, demographics alone dictate a continuation of the negative trend. My prediction: down 5 percent in each of the spring and fall six-month ABC reporting periods. That will mean that by year’s end, print newspaper penetration will fall to about one in three households (a long way down from its postwar peak of 134 newspapers sold per 100 households in 1946).

Online news readership. There are a couple of ways to look at this. For newspaper websites, NAA recently switched from Nielsen to Comscore because they liked Comscore’s numbers better. As a base measure, Comscore is showing about 105 million monthly unique visitors and 4 billion pageviews to newspaper sites, with the average visitor spending 3.5 minutes per visit. Prediction: all three of those metrics will stay flat (plus or minus 10 percent) during 2011. The other way to look at it is: Where are Americans getting their news? The Pew Research Center looks at this on an annual basis, and in 2010 showed online, radio, and newspapers more or less tied as news sources for Americans. Is there any doubt where this is going? In 2011, Pew might add mobile as a distinct source, but it will show online clearly ahead of newspapers and radio, with mobile ascendant.

Newspaper chains. Nobody can afford to buy anybody else, and no non-newspaper companies want to buy newspapers. There might be some mergers, but really, there are no strategic opportunities for consolidation in this industry, because there are no major efficiencies or revenue opportunities to be gained. Everybody will just muddle along in 2011, with the exception of Journal Register, which as noted above will move into adjacent markets with digital products and generally show the way the rest should follow.

Stocks. The major indices will be up 15 to 20 percent by September, but they’ll drop back to a break-even position by the end of 2011. Newspaper stocks will not beat the market. Others: AOL and Google will beat the market; Yahoo and Microsoft will not.

17:00

Keeping Martin honest: Checking on Langeveld’s predictions for 2010

Editor’s Note: This year, we’re running lots of predictions of what 2011 will bring for journalism. But our friend Martin Langeveld has been sharing his predictions for the new-media world for a couple of years now.

In the spirit of accountability, we think it’s important to check back and see how those predictions fared. We did it last year, checking in on his 2009 predictions. And now we’ll check in on 2010.

Check in next year around this time as we look back at all the predictions for 2011 and how they turned out.

Newspaper ad revenue

PREDICTION: At least technically, the recession is over, with GDP growth measured at 2.8 percent in Q3 of 2009 and widely forecast in Q4 to exceed that rate. But newspaper revenue has not followed suit, dropping 28 percent in Q3. McClatchy and the New York Times Company (which both came in at about that level in Q3) hinted last week that Q4 would be better, in the negative low-to-mid 20 percent range. This is not unexpected — in the last few recessions with actual GDP contraction (1990-91 and 2001), newspaper revenue remained in negative territory for at least two quarters after the GDP returned to growth. But the newspaper dip has been bigger each time, and the current slide started (without precedent) a year and a half before the recession did, with a cumulative revenue loss of nearly 50 percent. Newspaper revenue has never grown by much more than 10 percent (year over year) in any one quarter, so no real recovery is likely. This is a permanently downsized industry. My call for revenue by quarter (including online revenue) during 2010 is: -11%, -10%, -6%, -2%.

REALITY: CLOSE, ONE CIGAR. Actuals for Q1, 2, and 3: -9.70%, -5.55%, – 5.39%. And Q4, while not a winner, will probably be “better” than Q3 (that is, another quarter of “moderating declines” in news chain boardroom-speak). So, a win on the trendline, and pretty close on the numbers.

Newspaper online revenue

PREDICTION: Newspaper online revenue will be the only bright spot, breaking even in Q1 and ramping up to 15% growth by Q4.

REALITY: CLOSE, ONE CIGAR. Actuals for Q1, 2, and 3: +4.90%, +13.90%, and +10.7%. Since Q1 beat my prediction and was the first positive result in eight quarters, I’d say that’s a win, and pretty close on the ramp-up, so far. Q4 might hit that 15%.

Newspaper circulation revenue

PREDICTION: Newspaper circulation revenue will grow, because publishers are realizing that print is now a niche they can and should charge for, rather than trying to keep marginal subscribers with non-stop discounting. But this means circulation will continue to drop. In 2009, we saw a drop of 7.1% in the 6-month period ending March 31, and a drop of 10.6 percent for the period ending Sept. 30. In 2010, we’ll see a losses of at lest 7.5% in each period.

REALITY: HALF A CIGAR. Actual drop in the March 31 period was 8.7%; actual drop in the Sept. 30 period was 5.0%. So, half a win here.

Newspaper bankruptcies

PREDICTION: I don’t think we’re out of the woods, or off the courthouse steps, although the newspaper bankruptcy flurry in 2009 was in the first half of the year. The trouble is the above-mentioned revenue decline. If it continues at double-digit rates, several companies will hit the wall, where they have no capital or credit resources left and where a “restructuring” is preferable and probably more strategic than continuing to slash expenses to match revenue losses. So I will predict at least one bankruptcy of a major newspaper company. In fact, let’s make that at least two.

REALITY: CORRECT — TWO CIGARS. Well, MediaNews Group filed its strategic bankruptcy in January, as did Morris Publishing. So this was a quick win. Canwest Ltd. Partnership, publisher of 12 Canadian papers, filed in January as well.

Newspaper closings and publishing frequency reductions

PREDICTION: Yup, there will be closings and frequency reductions. Those revenue and circulation declines will hit harder in some places than others, forcing more extinction than we saw in 2009.

REALITY: WRONG. Nope, everybody managed to hang on, nobody of any size closed.

Mergers

PREDICTION: It’s interesting that we saw very little M&A activity in 2009 — none of the players saw much opportunity to gain by consolidation. They all just hunkered down waiting for the recession to end. It has ended, but if my prediction is right and revenue doesn’t turn up or at least flatten by Q2, the urge to merge or otherwise restructure will set in. Expect to see at least a few fairly big newspaper firms merge or be acquired by other media outfits. (But, as in 2009, don’t expect Google to buy the New York Times or any other print media.)

REALITY: WRONG. Google didn’t buy the Times or any other newspaper, but by the same token, there were no significant mergers or acquisitions all year. So much for Dean Singleton’s promise of “consolidation” in the industry after MediaNews emerged from its quick bankruptcy.

Shakeups

PREDICTION: Given the fact that newspaper stocks generally outperformed the market (see my previous post), it’s not surprising that there were few changes in the executive suites. But if the industry continues to contract, those stock prices will head back down. Don’t be surprised to see some boards turn to new talent. If they do, they’ll bring in specialists from outside the industry good at creative downsizing and reinvention of business models. Sooner would be better than later, in some cases.

REALITY: NOT FLAT WRONG, BUT NOT CLOSE. Perhaps the closest any company came to truly shaking things up was Journal Register Company, which in January appointed as its CEO John Paton, an executive with experience in Hispanic media. He’s not an outsider, but he’s preaching a very different gospel that includes a clear vision for a web-based future for news. Elsewhere, Tribune, still dealing with bankruptcy, tossed CEO Randy Michaels, not for strategic reasons but because accusations of sexism and other dumb behavior were “tarnishing” the company’s name.

Hyperlocal

PREDICTION: There will be more and more launches of online and online/print combos focused on covering towns, neighborhoods, cities and regions, with both for-profit and nonprofit bizmods. Startups and major media firms looking to enter this “space” with standardized and mechanized approaches won’t do nearly as well as one-off ventures where real people take a risk, start a site, cover their market like a blanket, create a brand and sell themselves to local advertisers.

REALITY: CORRECT. This is happening in spades. AOL’s Patch launched hundreds of sites. It may be a “standardized” approach, but it’s not “mechanized,” and hired more journalists than any company has in decades. At the same time, one-off ventures continue to sprout in towns and cities everywhere.

Paid content

PREDICTION: At the end of 2008, this wasn’t yet much of a discussion topic. It became the obsession of 2009, but the year is ending with few actual moves toward full paywalls or more nuanced models. Steve Brill’s Journalism Online promises a beta rollout soon and claims a client list numbering well over 1000 publications. Those are not commitments to use JO’s system — rather, they’re signatories to a non-binding letter of intent that gives them access to some of the findings from JO’s beta test. Many publishers, including many who have signed that letter, remain firmly on the sidelines, realizing that they have little content that’s unique or valuable enough to readers to charge for. JO itself has not speculated what kind of content might garner reader revenue, although its founders have been clear that they’re not recommending across-the-board paywalls. So where are we heading in 2010? My predictions are that by the end of the year, most daily papers will still be publishing the vast majority of their content free on the Web; that most of those experimenting with pay systems will be disappointed; and that the few broad paywalls in place now at local and regional dailies will prove of no value in stemming print circulation declines.

REALITY: CORRECT. Most papers are still publishing the vast majority of their content free on the web. ALSO CORRECT: Broad paywalls have done little to stem the decline in print. JURY STILL OUT: But it’s too soon to tell whether those experimenting with paywalls are disappointed. All eyes are on the impending paywall start at the New York Times.

Gadgets

PREDICTION: The recently announced consortium led by Time Inc. to publish magazine and (eventually) newspaper content on tablets and other platforms will see the first fruits of its efforts late in the year as Apple and several others unveil tablet devices — essentially oversized iPhones that don’t make phone calls but have 10-inch screens and make great color readers. Expect pricing in the $500 ballpark plus a data plan, which could include a selection of magazine subscriptions (sort of like channels in cable packages, but with more a la carte choice). If newspapers are on the ball, they can join Time’s consortium and be part of the plan. Tablet sales will put a pretty good dent in Kindle sales. One wish/hope for the (as yet un-named) publisher consortium: atomize the content and let me pick individual articles — don’t force me to subscribe to a magazine or buy a whole copy. In other words, don’t attempt to replicate the print model on a tablet.

REALITY: CORRECT, MORE CIGARS. My iPad description and data plan price point were right on the mark. It’s hard to say for sure whether iPad sales have put much of a dent in Kindle sales, since Amazon doesn’t release numbers, but Kindle sales are way up after a price cut. The magazine consortium, now called Next Issue Media, still has no retail product, but it does look like it intends to “replicate the print model on a tablet” rather than recognizing atomization. Meanwhile, the Associated Press is recognizing atomization with its plan for a rights clearinghouse for news content.

Social networks

PREDICTION: Twitter usage will continue to be flat (it has lost traffic slowly but steadily since summer). Facebook will continue to grow internationally but is probably close to maxing out in the U.S. With Facebook now cash-flow positive, and Twitter still essentially revenue-less, could Zuckerberg and Evan Williams be holding deal talks sometime during the year? It wouldn’t surprise me.

REALITY: WRONG, MOSTLY. Twitter is still fairly flat in web traffic, but it’s growing via mobile and Twitter clients, so its real traffic is hard to gauge. No talks between Twitter and Facebook, though.

Privacy

PREDICTION: The Federal Trade Commission will recommend to Congress a new set of online privacy initiatives requiring clearer “opt-in” provisions governing how personal information of Web users may be used for things like targeting ads and content. Anticipating this, Facebook, Google and others will continue to maneuver to lock consumers into opt-in settings that allow broad use of personal data without having to ask consumers to reset their preferences in response to the legislation. In the end, Congress will dither but not pass a major overhaul of privacy regs.

REALITY: CORRECT. Indeed, we don’t have any major overhaul by Congress, but we’re actually seeing more responsible behavior from all of the big players with regard to privacy, including better user controls on privacy just announced by Microsoft.

Mobile

PREDICTION (with thanks to Art Howe of Verve Wireless): By the end of 2010 a huge shift toward mobile consumption of news will be evident. In 2009, mobile news was just getting on the radar screen, but during the year several million people downloaded the AP’s mobile app to their iPhones, and several million more adopted apps from individual publishers. By the end of 2010, with many more smartphone users, news apps will find tens of millions of new users (Art might project 100 million), and that’s with tablets just appearing on the playing field. During 2009, Web readership of news (though not of newspaper content) overtook news in printed newspapers. Looking out to sometime in 2011 or 2012, more people will get their news from a mobile device than from a desktop or laptop, and news in print will be left completely in the dust.

REALITY: JURY STILL OUT, BUT LOOKING CORRECT. To my knowledge, nobody has a handle on how many news apps have been sold or downloaded, but certainly it’s in the tens of millions, counting both smartphone and tablet apps. One the other hand, a lot of people with apps on their phones don’t use them. As to where mobile ranks among news delivery media, the surveys haven’t picked up the trends yet, but wait till next year.

Stocks

PREDICTION: I accurately predicted the Dow’s rise during 2009 and that newspaper stocks would beat the market (see previous post), but neglected to place a bet on the market for 2010, so here goes: The Dow will rise by 8% (from its Dec. 31 close), but newspaper stocks will sink as revenue fails to rebound quarter after quarter.

REALITY: ON THE MONEY. As of mid-afternoon December 15, the Dow is up 10.19% for the year, so I claim a win on that score. The S&P 500 is up 11.11%, and the NASDAQ is up 15.63%. Among newspaper groups, McClatchy (up 33%), Journal Communications (up 26%) and E.W. Scripps (up 44%) handily beat the market, but all the other players indeed sank or underperformed the market: New York Times Company is down 23%, News Corp. is up 5%, Lee Enterprises is down 30 percent, Media General is down 30% and Gannett is up 4%.

January 08 2010

15:00

What 2010 will bring newspapers: Bad revenue news, bad bankruptcy news, and maybe a nice tablet

[Yesterday, we showed how our Martin Langeveld's predictions for 2009 turned out. A few hits, a few misses, but lots of thoughts provoked. Here's his list of what we can expect in 2010. —Josh]

Newspaper ad revenue: At least technically, the recession is over, with GDP growth measured at 2.2 percent in Q3 of 2009 and widely forecast in Q4 to exceed that rate. But newspaper revenue has not followed suit, dropping 28 percent in Q3. McClatchy and the New York Times Company (which both came in at about that level in Q3) hinted recently that Q4 would be better, in the negative low-to-mid 20 percent range. This is not unexpected — in the last few recessions with actual GDP contraction (1990-91 and 2001), newspaper revenue remained in negative territory for at least two quarters after the GDP returned to growth. But the newspaper dip has been bigger each time, and the current slide started (without precedent) a year and a half before the recession did, with a cumulative revenue loss of nearly 50 percent. Newspaper revenue has never grown by much more than 10 percent (year over year) in any one quarter, so no real recovery is likely; this is a permanently downsized industry. My call for revenue by quarter during 2010 is: -11%, -10%, -6%, -2%.

Newspaper online revenue (included in the overall prediction above) will be the only bright spot, breaking even in Q1 and ramping up to 15% growth by Q4.

Newspaper circulation revenue will grow, because publishers are realizing that print is now a niche they can and should charge for, rather than trying to keep marginal subscribers with non-stop discounting. But this means circulation will continue to drop. In 2009, we saw drops of 7.1 percent in the six-month period ending March 31 and 10.6 percent for the period ending Sept. 30. In 2010, we’ll see a losses of at least 7.5% in each period.

Newspaper bankruptcies: I don’t think we’re out of the woods, or off the courthouse steps, although the newspaper bankruptcy flurry in 2009 was in the first half of the year. The trouble is the above-mentioned revenue decline. If it continues at double-digit rates, several companies will hit the wall, where they have no capital or credit resources left and where a “restructuring” is preferable and probably more strategic than continuing to slash expenses to match revenue losses. So I will predict at least one bankruptcy of a major newspaper company. In fact, let’s make that at least two.

Newspaper closings and publishing-frequency reductions: Yup, there will be closing and frequency reductions. Those revenue and circulation declines will hit harder in some places than others, forcing more extinction than we saw in 2009.

Mergers: It’s interesting that we saw very little M&A activity in 2009 — none of the players saw much opportunity to gain by consolidation. They all just hunkered down waiting for the recession to end. It has ended, but if my prediction is right and revenue doesn’t turn up or at least flatten by Q2, the urge to merge or otherwise restructure will set in. Expect to see at least a few fairly big newspaper firms merge or be acquired by other media outfits. (But, as in 2009, don’t expect Google to buy the New York Times or any other print media.)

Shakeups: Given the fact that newspaper stocks generally outperformed the market, it’s not surprising that there were few changes in the executive suites. But if the industry continues to contract, those stock prices will head back down. Don’t be surprised to see some boards turn to new talent. If they do, they’ll bring in specialists from outside the industry good at creative downsizing and reinvention of business models. Sooner would be better than later, in some cases.

Hyperlocal: There will be more and more launches of online and online/print combos focused on covering towns, neighborhoods, cities and regions, with both for-profit and nonprofit business models. Startups and major media firms looking to enter this space with standardized and mechanized approaches won’t do nearly as well as one-off ventures where real people take a risk, start a site, cover their market like a blanket, create a brand and sell themselves to local advertisers.

Paid content: At the end of 2008, this wasn’t yet much of a discussion topic. It became the obsession of 2009, but the year is ending with few actual moves toward full paywalls or more nuanced models. Steve Brill’s Journalism Online promises a beta rollout soon and claims a client list numbering well over 1,000 publications. Those are not commitments to use JO’s system — rather, they’re signatories to a non-binding letter of intent that gives them access to some of the findings from JO’s beta test. Many publishers, including many who have signed that letter, remain firmly on the sidelines, realizing that they have little content that’s unique or valuable enough to readers to charge for. JO itself has not speculated what kind of content might garner reader revenue, although its founders have been clear that they’re not recommending across-the-board paywalls.

So where are we heading in 2010? My predictions are that by the end of the year, most daily papers will still be publishing the vast majority of their content free on the web; that most of those experimenting with pay systems will be disappointed; and that the few broad paywalls in place now at local and regional dailies will prove of no value in stemming print circulation declines.

Gadgets: The recently announced consortium led by Time Inc. to publish magazine and (eventually) newspaper content on tablets and other platforms will see the first fruits of its efforts late in the year as Apple and several others unveil tablet devices — essentially oversized iPhones that don’t make phone calls but have 10-inch screens and make great color readers. Expect pricing in the $500 ballpark plus a data plan, which could include a selection of magazine subscriptions (sort of like channels in cable packages, but with more à la carte choice). If newspapers are on the ball, they can join Time’s consortium and be part of the plan. Tablet sales will put a pretty good dent in Kindle sales. One wish/hope for the (as yet unnamed) publisher consortium: Atomize the content and let me pick individual articles — don’t force me to subscribe to a magazine or buy a whole copy. In other words, don’t attempt to replicate the print model on a tablet.

Social networks: Twitter’s own site usage will continue to be flat (it has actually lost traffic slowly but steadily since summer), but that probably means more people are accessing Twitter through various apps on computers and smartphones, so actual engagement is hard to gauge.  Facebook will continue to grow internationally but is probably close to maxing out in the U.S. With Facebook now cash-flow positive, and Twitter still essentially revenue-less except for lucrative search deals with Google and Bing, could Mark Zuckerberg and Evan Williams be holding deal talks sometime during the year? It wouldn’t surprise me.

Privacy: The Federal Trade Commission will recommend to Congress a new set of online privacy initiatives requiring clearer “opt-in” provisions governing how personal information of web users may be used for things like targeting ads and content. Anticipating this, Facebook, Google and others will continue to maneuver to lock consumers into opt-in settings that allow broad use of personal data without having to ask consumers to reset their preferences in response to the legislation. In the end, Congress will dither but not pass a major overhaul of privacy regs.

Mobile (with thanks to Art Howe of Verve Wireless): By the end of 2010 a huge shift toward mobile consumption of news will be evident. In 2009, mobile news was just getting on the radar screen, but during the year several million people downloaded the AP’s mobile app to their iPhones, and several million more adopted apps from individual publishers. By the end of 2010, with many more smartphone users, news apps will find tens of millions of new users (Art might project 100 million), and that’s with tablets just appearing on the playing field. During 2009, web readership of news (though not of newspaper content) overtook news in printed newspapers. Looking out to sometime in 2011 or 2012, more people will get their news from a mobile device than from a desktop or laptop, and news in print will be left completely in the dust.

Stocks: I accurately predicted the Dow’s rise during 2009 and that newspaper stocks would beat the market. The Dow will rise by 8% (from its Dec. 31 close), but newspaper stocks will sink as revenue fails to rebound quarter after quarter.

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