As it says in the introduction to "Blueprint for Transformation," the report produced as part of API's Newspaper Next project, circulation, readership and print ad revenue are shrinking faster than online audiences and online spending are growing. Just today, Merrill Lynch analysts lowered their projections for newspaper ad revenue this year and next, cutting the 2006 forecast to "flat" from a 1.2% gain and slashing the 2007 estimate to a 1.5% decline from a 1.1% rise.
Problems and solutions
In the API report, as in life, it's easier to find the problems than the solutions; the "Blueprint" emphasis is finding frameworks with which to move forward and diversify.
Newspaper companies have to migrate from a "fixed and monolithic" business model to a "diverse and growing portfolio" of models, products and services that attract new readers and advertisers, according to the report. "A portfolio solution is necessary because a newspaper alone, or a newspaper and a news website, are no longer enough," it says. "These are solutions for a mass audience, but the mass audience is dispersing in many directions, never to return."
Newspaper Next and Innosight, the API's consultant on the project, helped newspaper companies conduct seven demonstration projects over four months to see what might be done on a smaller scale. The Boston Globe, for example, got help figuring out how to score more ad spending from very small businesses. It now plans to try selling small companies a search-engine marketing program that guarantees clicks to their websites for $200 to $1,000 a month.
The Dallas Morning News looked around and counted more than 700,000 mothers in the Dallas-Fort Worth area, of which the paper reached less than 105,000. Its Newspaper Next team started a "mommy blog" and is proposing a web-based activity planner called GuideFamily.com, with recommendations and tools for everything from summer camps to birthday parties. Revenue is estimated at $500,000 to $1 million by the site's third year.
Other suggested opportunities for papers of varying stripes include: "lite" commuter versions of core newspaper brands; luxe publications focused on topics such as fashion and real estate; free entertainment pubs distributed on racks and counter tops; and new non-dailies for smaller communities or neighborhoods.
"When it comes to building audiences," the executive summary says, "the good news for newspaper companies is that many of the opportunities are local."