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Last week, The Oregonian newspaper announced that it was cutting print circulation to 4 days a week, laying off most of its staff, and forming a new digital news company. In a mostly tacit, but sometimes explicit admission that print media is facing its demise, the oldest newspaper on the West Coast confirmed that the future is in digital publishing. The delivery of information is evolving rapidly as technology develops, and consumers are demanding swifter, more personalized, and more transparent information. Gone are the days of the gatekeepers who decide what is news - consumers have taken back control of which information they choose to consume. The newspaper industry will adapt or fail depending on how it responds to these challenges to its hegemony.
The Oregonian has been in constant circulation through several ownership groups since its founding in 1850, making it the oldest newspaper on the West Coast. It has gone through many iterations, but has consistently been considered the newspaper of record for the entire state. But the 21st century has seen a dramatic shift in the industry, as the paper's announcement notes:
The move comes as newspapers nationwide struggle to adapt to changes in readership and advertising. Several other Advance Publications newspapers have either reduced home delivery or have announced plans to.
Since 2004-05, the height of revenue in the industry, newspaper advertising revenue has declined by $27 billion, or more than 50 percent, said Ken Doctor, media analyst and author the book and website Newsonomics. Last year, print ad revenue declined by 9 percent, " a huge loss in the midst of an economic recovery," Doctor said.
Yet newspapers rely on advertising for roughly 73 percent of their revenue, he said, and digital ads generate only as much as 15 percent overall ad revenue. So, while advertising on Google and other websites now surpasses advertising in print, digital ads at newspapers aren't growing at the same rate, Doctor said.
"The major driver of this change is the devastating loss of print advertising," Doctor said. "They're not maintaining their share in what is the biggest ad boom in history."
The Oregonian is not the only West Coast newspaper to undergo such a dramatic change. In 2009, the Seattle P-I went to an exclusively online format. Other newspapers owned by Advance Publications, the parent company of The Oregonian, have also transitioned to digital formats - including the Cleveland Plain Dealer, The Syracuse Post-Standard, The New Orleans Times-Picayune and others.
But why the precipitous drop in ad revenue? Is it as simple as shifting demographics and new technologies making old modes of information consumption obsolete?
I’ve been told by folks in the newspaper business that traditional outlets are seeing upwards of 30+% revenue losses (and this may be a conservative estimate). Major advertisers are migrating, looking for ways to reduce their marketing expenses. Thus the move to digital instead of printing inserts every week. Subscriber migration to digital sources has cost most metro papers dearly in subscriber count, and advertisers pay for access to subscribers. A sharp decline in revenue is compounded by increases in traditional production/distribution expenses, such as newsprint and carrier force. Meanwhile, if good, unduplicated content can be produced for a specific audience – THAT is the formula to keep a subscriber engaged. If a subscriber can get better content and get it delivered in a more personalized fashion, well, brand loyalty and industry inertia will take you only so far. Most consumers these days have no reason to be loyal to your brand unless you constantly reward them for that loyalty.
Those in the industry will tell you that good publishers and editors know their readers. As a publisher, you don't have to pander, but you do have to understand what content is important to your subscribers and choose to provide it.
I have previously blogged about this issue, and I continue to contend that consumers have lost trust in the old masters of the media, leading to consumer migration to other sources of news. It's been well documented that this mistrust is in direct correlation to the amount of bias exhibited by a particular outlet. The old model of news delivery is for editors to control a large empire of media outlets and to have dictatorial influence over what is and what isn't news. But today, consumers are much more aware of the bias being exhibited by these media masters, and they have far more choices - including citizen journalists who have continually embarassed traditional media outlets who choose to bury news stories that don't fit their editorial agenda.
Gone are the days when folks rarely stepped outside their comfort zones to read alternative reports not provided by the Big 3 Alphabet News organizations or the local paper. Between blogs, social media and online outlets, we can consume information within minutes, instead of hours or days. And we now have a virtually limitless choice of which information we consume.
Between a rapid change in technology, a stronger consumer appetite for more and better information at a faster speed, and the inability and complete unwillingness for editors and reporters to hide or change their obvious bias, it’s no wonder that consumers are rejecting outdated modes of information delivery.