Written by: Gustav Silvergren
The newspapers are in trouble. Revenues are declining and the newsrooms are sacking people as new online solutions enter our lives. The former cash cow, printed advertising, is no longer an attractive option for marketers. But why? Our habits have changed together with a new media landscape that offers a range of opportunities, but also looming threats for both the newspapers and its readers.
For the last six months I have been using a mobile application called Omni, which is a platform that gives you the latest news from all the major Swedish newspapers and news channels. It allows you to tune in your own mix of domestic, world, business and sports news. Also, you can decide to monitor special topics and get notifications about the latest scoops directly on your smart phone. This made me consider the development of the way we read news, as I cannot even remember the last time I properly read a print newspaper. Technology affects most of our daily activities and it puts pressure on businesses to constantly be up to date with the latest solutions and means of communication. This applies of course to the news industry as well, where a boom of new media and new actors have turned the industry into a hodgepodge of alternatives competing for the clicks. The online development withholds opportunities, but also looming threats for the newspapers giants. It may not be surprising for you to hear that the newspaper industry has experienced a severe decline over the last decades as a result of reduced print advertising revenues (Sridhar & Sriram, 2015), which is the main source of income for most newspapers. Advertisers claim that printed ads do not enable the desired reach, quality and audience cut-through anymore (The Guardian, 2015). Meanwhile, as readers go online to read their news, the newspapers’ websites have grown substantially and the online advertising revenues have followed. However, the revenues from online ads have not been able to make up for the loss in print advertising (Sridhar & Sriram, 2015). So, are the days numbered for the printed newspapers? How are people actually getting updated on the latest news today, and will it change?
The consumer, i.e. the reader of news, which used to be a passive consumer, now takes an active part in the spreading of news and the creation of content. As the news are accessible 24/7, the readers do no longer just read the news during breakfast, or on the subway-ride to work. With online news, the consumption is much more ad hoc than it used to be (OECD, 2010). Just consider your own behavior – don’t you have a quick look at the latest updates in the feed, whenever you have a minute to spare? Through our phone, we can access news from anywhere, and we expect it to be updated in real-time (Koutsaftikis et al. 2013). It is not unusual to already have seen or read about the news displayed on the kiosk’s posters in the morning. With today’s social media landscape, we are constantly exposed to the latest scoops, either by actual suppliers of news or by contacts in our digital social network. With the step-up to web 2.0 and its peer-to-peer interactions online (Duffy, 2016), we have all taken on the role as journalists. Koutsaftikis, Nanas and Vavalis (2013) refers to this as citizen journalism where consumers, who previously have been merely passive readers, now take an active part in sharing, reporting and commenting on content. This is a new phenomenon for the newspapers, which they have to cope with accordingly. If a newspaper publishes something controversial today, they must be ready to face the immediate responses from their readers, which is made available for everyone online. The newspapers no longer have the unchallenged authority to tell us what is going on.
As the internet and information technology advance, so does the way we consume news. After all, there’s no actual need to read print anymore, as you are able to read, watch or listen to news from anywhere, anytime with your smart phone, tablet or laptop. Already by the end of 2010, more people read the news online than in print (Koutsaftikis et al. 2013). Another remarkable development that has followed the digitalization of news is the exponential increase of videos on the newspaper websites, previously specialized in print only (Katsirea, 2015). This is an interesting case of how the newspapers have been forced reconsider their strategies of communicating news as their targets group have changed their preferences. Videos have come to play an important role for the online newspapers’ business strategy as they function as a point of entry for many readers and viewers. But does this imply the eventual end of written content in the long run? Perhaps not, as the videos usually are made to complement the text and enable new creative opportunities for the journalists (WANIFRA, 2014). Personally, I tend to watch videos that are uploaded together with articles in the online newspapers, as it is more convenient and efficient. If I happen to find the topic interesting, I gladly read the text that comes with it. On the other hand, if I click into an article with no video content, but an extensive amount of text, I tend to get discouraged. Especially if it is on my mobile phone. Speaking of mobile, more and more users check the news on their phone rather than their computer. In the US alone, 39 out of 50 news sites got more traffic from mobile devices than from desktop computers last year (Mitchell, 2015). This stresses the importance of mobile compatibility in today’s media landscape.
But who is leading this online development? The most active online news consumers are the 25-34 year-olds. But as internet connection is becoming a more natural part of our daily lives, the share of online readers is increasing in older age groups as well. Fewer people tend to rely on printed news alone and complement their consumption with online news sources. A report from OECD (2010) predicts that the share of people who rely entirely on online news is likely to grow as new generations use internet at a larger extent from early on in life. Countries with advanced mobile connections tend to have a larger usage of online news consumption, and it is likely that other countries will follow as their internet connections improve. Naturally, newspaper websites will become the new flagship products as the printed issue eventually will become a product extension of the online platform. This may not be the most favorable outcome for the newspapers though, as it affects their flow of income.
As the access to news is getting increasingly convenient for every Tom, Dick and Harry, a steady flow of income is getting decreasingly convenient for the newspapers. Internet’s substitution of traditional media has had a fatal financial effect on the newspaper industry (Carson, 2015). The online development has displaced the newspapers’ revenues from subscription and printed advertising, which in many countries provide among the largest industries in terms of providing advertising (OECD, 2010). However, this may be a rather natural reaction following the rise of new, alternative ways to advertise online. Why? Because print advertising prices have raised for the last decades (OECD, 2010), and are simply costlier per advertisement than the online ads (Chron, 2016). Meanwhile, some argue that the ROI on print advertisement is better than the online alternative (Chron, 2016; Grimm, 2014). It is likely to believe that purchasers of advertisement are reluctant to pay more for “the old way” when online ads can provide an advantage in terms of awareness efficiency and conversion efficiency (Ha, 2008). Frankly, businesses who wishes to communicate to a specific target group will be more efficient by doing so online. Online advertising also gives you data on reach and activity in a way that a newspaper cannot present.
Although it may be difficult to see the light in the tunnel, the days are not necessarily numbered for your favorite newspaper. Traditional newspapers remain the favorite news brands online (Carson, 2015) and the newspapers were quite early to enter the digitalized market. However, this first-mover advantage is now gone (Farhi, 2008), as new players such as the previously mentioned application Omni has entered the market, and keep their advertising revenues for themselves. Therefore, it is of vital importance for the newspapers to realize that the glory days of print are over. There will always be people who prefer the printed issues of course, but this segment is not likely to go back to its former size.
There is another looming threat for the news industry, namely that a large portion of the younger generations read news irregularly or do not read news at all (OECD, 2010). Is this digitalization’s other side of the coin? News online have to penetrate the noise of narcissistic status updates, “5 things you didn’t know-lists” and movies of ridiculously stupid cats to reach the target group. This is probably the reason why recognized newsrooms have launched their own sites of stupid, yet “clickable” content just to draw traffic and create advertising value. If this is the future of journalism, maybe all the sacked journalists, which are reaching record numbers (Doctor, 2015), are not too unhappy about losing their jobs after all.
With this said, it is not entirely up to the newspapers to provide its readers with new solutions and platforms of spreading news. It is also up to us, the readers, to visit their sites and support them in their activities. Otherwise there may not be a supply of high-quality journalism in the future. Still, it will be hard not to use Omni.
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