Good News, An International Media Expert Says Traditional Media Has At Least Another Five Years!

Philip M. Stone October 22, 2008

Here’s a rather startling fact -- the generation that comes of age in 2012 – just four years away – will be the first that doesn’t know the pre-Internet world. So does that mean the end of traditional media? Marcel Fenez, Global Leader for Entertainment and Media at PricewaterhouseCoopers, says absolutely not. There is life left in the old dog yet – at least five years of life!

“Some people say that traditional media is dead. Well, it isn’t. For the next five years it ain’t gonna be.” he told the recent 11th Readership Conference sponsored by the World Association of Newspapers and the World Editors Forum.

But there is an “if” in that blanket statement. His forecasts did not take into account the financial and economic meltdown of the past weeks, and that certainly could have a detrimental effect on his forecasts. As it is, he predicts that print advertising by 2012 will grow to $123.3 billion (just a 1.8% increase) whereby digital advertising will grow to $13.4 billion (a 19.3% growth).

Both of those forecasts are actually very worrying. That 1.8% print growth on a global basis means some parts of the world – India, China – may hold their own, even continue growing, but there will continue to be large offsets elsewhere – particularly Europe and North America.

And if digital will grow only by 19.3% in that time period then that is a real slowdown there, too. And it shouldn’t go unnoticed that the digital figure is still only about 11% of the print figure, so the big bucks will continue to come from print, and it’s going to take far longer than previously hoped for newspaper publishers to be see a pretty even split in their print and digital revenues.  

It’s no secret that print is counting heavily upon digital to ride to its rescue, but the Q3 PubMatic AdPrice index, a quarterly industry-wide measurement of online ad pricing, has dropped overall this year by 27%, meaning that while the digital properties may draw eyeballs to premium content, advertisers are actually paying less for placement. That’s not what newspapers need to rebuild their finances.

Which rather supports our argument of late that for newspapers the advertising-supported model in giving away premium content is not the way forward, and PwC’s Fenez would seem to agree. “Premium content is still really valuable. Even the net generation values premium content. They’re tied of watching videos of a dog running up a tree.”

Sites like the Financial Times and the Wall Street Journal have announced monster viewing figures in September. To get to the really good stuff on both sites you’ve got to pay, and people seem willing to do that.

And while there is some good economic news – the average price of a gallon of gasoline is now down to $2.91 from its peak of $4.11 which really kept people from driving to the malls and thus advertisers keeping their hands in their pockets – the fact is that traditional media advertising going well into 2009 will continue to sour.

So it’s time again to take a look at what Dean Singleton is saying about all this. Singleton, CEO of MediaNews, has made a life’s work of squeezing every penny of cost that isn’t necessary from his 54 daily newspapers.  And having outsourced much of backroom operations he is taking a close look at what can be done with editorial.

He told the Southern Newspapers Publishers Association this week that his company was looking at outsourcing for just about everything it does. He’s even looking at having just one newsdesk for all his newspapers, and it could well be located offshore. “In today’s world, whether your desk is down the hall or around the world, from a computer standpoint, it doesn’t matter.” He’s not against sending copy editing and design jobs offshore.

Naturally that sparks plenty of argument based on quality issues such as this from The American Copy Editors Society, "Sending copy editing overseas is a sure way to kill a paper's credibility. Maybe not immediately, and maybe not in one dramatic gesture, but every time that desk 9,000 miles away overlooks some nuance that local readers will spot, the newspaper's credibility dies a little.” Singleton says no page would go to press without approval from a local editor.

The truth is the newspaper business is being turned on its ear by the likes of Sam Zell and Singleton, and the name of the game seems to be to do whatever it takes to keep the print business alive and well.

You’ll recall hearing the “whatever it takes” line from governments around the world in the past few weeks that took measures that never before would have been contemplated in order to bolster the crumbling banking industry. Well, newspapers need financial bolstering, too, and “whatever it takes” is a key ingredient. That’s why competitors are printing and delivering one another’s newspapers, why newsdesks of co-owned newspapers are being merged, and so-on.

Singleton is of no doubt that changing how newspapers operate is integral to their survival. “Fond memories of dead newspapers will do nothing for our communities,” he told the publishers. And when he tells publishers that he has saved 65% of his previous costs by moving the preproduction work for his California newspapers to India then how can publishers not sit up and take notice?

Even if there are quality digressions from outsourcing, if readers don’t really notice too much difference then for survival stake is it not a fair question to ask, “Is the quality still good enough?”

We’ll leave the last word on outsourcing to the copy editors society. “Newspapers are still the place to go for the authoritative word on your community. If we lose that authoritative voice, we may as well outsource our readership as well, because local readers, not to mention advertisers, won't find any value in what our publications have to say.”

Outsource the readership – how come Singleton didn’t think of that?