The steps that print media companies have taken to respond to shifts in marketing budgets have been largely unsuccessful. Digital advertising is falling well short of replacing the dramatic decline in print advertising. Unfortunately, charging for content online is unlikely to materially reduce the pressure on print publishers. Journalism and information have already become commodities on the Web. Only a few print publications—such as The Wall Street Journal and Financial Times—are successfully charging for their content online, and they are all oriented toward business professionals. And although publishers are experimenting with new paid-content models such as Kindle sales, multititle subscriptions, or micropayments, the evidence so far suggests they are unlikely to succeed on a scale that would come close to replacing lost print advertising.
To anyone who cares about newspapers and magazines (their publishers, their readers, their employees, the marketers advertising in them), the situation seems dire and unsolvable.
But there is a way forward that allows print media companies to succeed in the new digital environment. It can already be seen in the efforts of some innovative players. A growing body of research suggests that a combination of four strategies is required if the media company of the future is to make money.
Develop deeper relationships with readers around targeted interest areas. Strong print brands enjoy a trusted relationship with their audiences because they provide high-quality content about specific interest areas. Digital media afford opportunities to extend those relationships. Just as important, digital media provide an opportunity for deeper information about the audience, through registration and observed behavior over time. This not only provides opportunities to better target advertising but opens up new ways to monetize the audience.
Tap into revenue streams beyond advertising and circulation. New publishing models include such marketing services as custom content, consumer insights and lead generation, as well as new paid-content offerings and data-based applications. Looking forward, the best metrics to track success will be total names and revenue per name.
Reinvent the content delivery model. This requires hard choices, with a particular focus on lowering costs, about what to cut in order to find the “profitable core” of unique and brand-defining content. Fortunately, digital usage provides a window into what content is most valued to better align costs and revenue.
Innovate with new products and pricing models. Although it is not clear what impact new platforms (such as the Kindle, iPhone and other mobile devices) will ultimately have on the print industry, they are clearly aimed at two key unmet needs: convenience and more flexible pricing. Here again, innovation will be reinforced by super-serving targeted interest areas. Building out these interest areas means not just providing the same content in new formats but also using applications that work with online, mobile and other new devices to increase consumers' willingness to pay for content or to register for it.
These strategies will require new capabilities: deeper insights into audience interests, “informatics” to manage and direct Web traffic, database management, custom content and applications development. The good news is that none of these capabilities is beyond the reach of media companies, and there are emerging best practices for how to build out these capabilities and tap into exciting new growth opportunities.
The survival of print media in some form is no small matter. At their best, newspapers and magazines enlighten, educate and enable the smooth running both of the global economy and of civil societies. Today the pain is real, but the opportunities have rarely been so great. With aggressive action to foster innovation and more aggressive cost management based on these new success strategies today, media companies can position themselves for a bright future.
Matthew Egol, a partner with Booz & Co., and Greg Springs, a senior associate with the firm, co-authored the original article on which this one is based in strategy+business. Egol can be reached at [email protected]