The writing’s on the wall for print revenue. Amidst all the argy-bargy last week over whether news publishers should ever have got into digital publishing at all (and an excellent rebuttal from our contributor Kevin Anderson) there was a universal tacit acknowledgement that the glory days of newsprint are long behind us. 

That’s not to say that it can’t still play a role in publishing strategies, even if that will be largely managing its decline while publishers find other ways to generate glory-days-of-print-style revenue. Nor is to say that the quality of journalism will be degraded by the decline. After all, the medium is not the message. So the billion dollar question is – what should newspaper publishers do with their print properties?

First, some statistics for context. It was a bad week for many publishers on both sides of the Atlantic, with some disappointing financial results and ad spend forecasts. The Wall Street Journal’s Suzanna Vrancia and Jack Marshall wrote an excellent summary of the situation, noting that:

“Global spending on newspaper print ads is expected to decline 8.7% to $52.6 billion in 2016, according to estimates from GroupM, the ad-buying firm owned by WPP PLC. That would be the biggest drop since the recession, when world-wide spending plummeted 13.7% in 2009.”

In a Poynter roundup of the article entitled ‘Print advertising woes are getting worse’, Rick Edmonds notes that, even with the buoying effect of print advertising in countries where print advertising remains relatively hale, it looks like global print ad spending isn’t exactly in the best of health:

“The Journal’s report focused on the largest U.S. and U.K. organizations, citing an estimate from the Group M ad-buying firm that global print advertising will be off 8.7 percent for all of 2016.  (That includes papers in developing countries where print remains relatively healthy).”

And as anyone who works in journalism must (or should) be aware by now, it’s hard to argue that the value of a digital reader is the same as a print reader in terms of pure RPU (good arguments can be made that you can make inroads to creating parity with print and digital readers in terms of subscription revenue, but that’s years away for most publishers if it’s possible at all).

Many publishers are endeavouring to reestablish the value of their digital audiences for advertisers, whether that’s through changing how display ads are sold or through the introduction of new ad formats (sponsored and native content was seen as having the most potential to deliver revenue in 2017 according to our State of the Media 2017 study, to be released in full this Wednesday). But as Edmonds points out:

“But all that digital growth on a base of business that remains smaller than print does not yet outweigh revenue declines at McClatchy’s 29 print newspapers.”

So what can publishers do about that falling print revenue, particularly in the face of what looks to be another bad year in terms of potential for generating advertising revenue across their print portfolios?

Some hope could come from the Independent, the UK-based news publisher that has returned to profitability for the first time in twenty three years as a result of abandoning its print edition. Its owner Evgeny Lebedev, who took the decision to go digital-only in the face of frank incredulity (at least publically), has previously stated that he expects other newspapers to follow suit in the near future. Of its recent success, he argues:

“By going online-only we freed ourselves from the unwieldy infrastructure of print, and allowed ourselves to be far more flexible.

“It is still early days, but the first six months have shown that by being more nimble and digitally focused we can better serve our new, much bigger online audience.”

The Independent’s success is validation of Clay Shirky’s argument that, below a certain circulation, print stops becoming cost effective. Shirky said:

“The problem with print is that the advantageous returns to scale from physical distribution of newspapers become disadvantageous when scale shrinks. The ad revenue from a print run of 500,000 would be 16 percent less than for 600,000 at best, but the costs wouldn’t fall by anything like 16%, eroding print margins. There is some threshold, well above 100,000 copies and probably closer to 250,000, where nightly print runs stop making economic sense.”

Based on those figures, there are a few national papers in the UK for whom print might already have stopped becoming a good bet. It might be an unpalatable thing to acknowledge, but better that than writing alternate history fiction.

But for publishers unwilling to abandon print entirely, there is a potential middle ground. Media analyst Colin Morrison has argued that moving to a different print schedule could ameliorate a lot of publishers’ problems:

“Daily newspapers might usefully move to an intermediate business model in which the paper is still printed up to, say, five times weekly while subscribers are persuaded to pay for the print/online package. But – in order to future-proof the business – such a strategy would have to involve relatively low-price (or even free) subscriptions. And the digital service would have to develop some independence of print in content, design, functionality – and advertising sales.”

Alternately, publishers could simply reexamine what print’s strength as a medium actually is. Nimble is a word that gets thrown around a lot these days, but we at TMB have applied it liberally to The New European, a ‘pop-up publication’ that we’ve argued could be the future of print as a news medium. Our reasoning is that, since news is an imperfect medium for actually delivering news… 

…it should instead be used as an artefact for expounding on topics and delivering analysis that requires time to digest. It’s a simple idea, and one that publications like Delayed Gratification and, to an extent, the Financial Times are delivering on successfully.

One thing seems certain, however. Winter is coming for print advertising, and many publishers still don’t have alternate revenue models that could compensate for its collapse. So perhaps it’s time to consider…

  • following the Independent into digital-only publishing when print costs become too great a drag to be worth chasing falling ad revenue
  • biting the bullet and daring not to be daily, or
  • transitioning the print product to a more analytical purpose, rather than for publishing news that everyone’s already read online anyway.