The Message isn’t the Medium: The Newspapers’ Innovator’s Dilemma

newspapers

Every so often I meet guys who are proclaiming the imminent death of Newspapers. They are convinced that digital media will cannibalize on the market dominated by Newspapers and perhaps traditional media like TV, Radio, Magazines etc. They are mostly right.

Newspapers are dying. That’s a given. But that’s mostly in the western world not here although soon it will be reality here as well. Even though some have transitioned to digital or online media, it hasn’t saved them either.

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Lets see why

The medium and the message are one when it comes to dead-tree newspapers. The dead-tree paper is a distribution channel as well the message. The two aren’t separable. Hence the Papers for decades have had exclusivity in mass media. When you pick up the paper to read, you are shielded from distracting notifications, social media channels, music and millions of websites at your disposal.

Rising costs of Production

Inefficiencies in traditional media such as investing in trucks to distribute the papers, printing factories, printing material, water and electricity have also turned out to be profits for Newspapers companies. Advertisers and Newspaper buyers foot the costs incurred in producing the newspapers. In fact, you are most likely paying 70% on production costs I’ve mentioned and only 30% on the actual content created!

These production costs increase with time thanks to inflation, rising fuel prices, electricity and water tariffs. That means, the price of the newspaper will keep rising and that doesn’t have anything to do with the actual quality of the content you think you are paying for. Newspapers are more likely going to lay off journalists, reduce on editorial budgets rather than increase them in order to “cut costs”.

With this in mind, the logical step is moving online, right? After all, You won’t have to pay the track guy, the guys in the printing factory and then foot high umeme electricity and water bills. Not so?

Yes, but…

The Medium isn’t the message online

Unlike offline media, with digital media, the message is separate from medium(distribution channel).

Just because you’ve a website with great content doesn’t mean people will find you and read your stuff. It doesn’t work that way.

Online, there are a number of distribution channels, the most prolific being;
#1. Social media
#2. Search engines
#3. Email newsletters
#4. RSS feeds or News readers

Most of those channels are not within the control of the publisher or the Newspapers. Forget the home page. No body types www.mywebsite.com¬†anymore. You’ve to play nicely with Google, Facebook, Twitter or else you are screwed.

The papers don’t enjoy the same exclusivity they have with offline channels. They have to fiercely compete for the attention their users are giving to Facebook, Twitter, their emails, local and millions of international blogs and websites. There are about 500,000 Ugandans on Facebook, 100,000 on Twitter and 300 Ugandan-specific blogs. That wasn’t the case 10 years ago.

Credibility is overrated

Also the newspapers are living under the illusion that they’ve premium content and that entitles them to readers. Wrong! Online users don’t quiet give a damn where content comes from as long as it’s affordable and valuable to them. When I Google for 2015 UCE UNEB results for instance and I find some random blog has the information, at that point, New Vision is useless to me. That blog has saved the day, and should it have more useful information, I’ll keep coming to it.

The business model online is “Free is the new paid”. Yet Newspapers are used to selling individual pieces of their product, not giving it out for Free. The papers face competition from other content publishers who have been happily distributing their content for free and have created successful business models around that.

Paywalls might work — for now

The other option the papers are considering is erecting Paywalls. Both the New Vision and Daily Monitor have e-paper versions of their newspapers each charging UGX 1500 per piece. It’s possible that these Paywalls will work here for some time although they’ve miserably failed elsewhere for one reason; Monopoly. They are only 3 dailies in Uganda. These papers create exclusive premium content you won’t find anywhere. According to the laws of economics, what happens when demand exceeds supply or when you’ve monopolies in the market? Simple; high prices. That’s the only logical reason why New Vision can price its e-paper at a freaking Ugx 1,500. Only Ugx 500 less than the dead-tree paper. That’s ridiculously expensive for an electronic paper.

Alternative media is rising

Contrast our market to the US market. The golden age of blogging gave newspapers a bloody nose they’ve never recovered from. Blogs gave users an alternative to traditional media and here’s the thing; they were equally or even creating better premium content that offline papers. In Uganda, Facebook is still the only plausible alternative to papers. But we only get funny memes, photos of our friends, and celeb gossips and nudes rather than more structured premium content the Newspapers do. Of the 300 blogs curated on Storipot, less than 5% are creating premium content. Therefore the papers still have a leeway in dominating the local information landscape.

Offline Ads are different from digital Ads

But supposing, Paywalls don’t convert and Newspapers go freemium like everybody else online?

If the Newspapers are to give out their content for Free, still somebody has to foot the bills, right? Yes. And that’s usually advertisers. But, advertising online is completely different from offline advertising. Advertisers love the exclusivity they get with dead-tree papers and as a result, they are willing to pay a premium for it. They are ready to cough more than UGX 8,000,000 for a full page Ad on the newspapers.

However, that’s not the case with digital Ads. First, no website will give you Ad real estate equivalent to a full page. That’s insanity. Websites have a way of provisioning their Ads, but it’s nothing close to the juicy Newspaper/Magazine style Ads.

Also, brands have more advertising options online than offline. Offline, New Vision is probably competing with Daily Monitor, Observer and Red pepper and that’s it. But online, it’s a different ballgame. We are talking Google’s Adsense, Facebook Ads, Twitter’s sponsored Tweets and hundreds of blogs all pulling in equally engaged audiences. Fierce competition in digital Advertising means less profits for the papers. New Vision for instance charges $1800 per month for biggest Ad space. Bare in mind that you can only have less than 5 Ads(on an extreme). Anything more than that becomes becomes distracting and may chase away potential readers.

This is the dilemma that traditional media will face. If they choose to stick to old methods and almost obsolete business models, they’ll be overtaken by new age media. If they chose to adopt new media, their old business models that worked well with the dead-tree papers won’t work well with digital media.

Image: Flickr