The Current Discussion: American newspapers are in dire financial straits. How are newspapers faring where you are? Are you concerned about the future of journalism in America or in your own country? What does that future look like?
It is very ironic that newspapers have always been on the lookout for change, new ideas and the latest technologies and change but they have tried to keep a very old business model alive with very old-fashioned ideas and advertising. Moreover, the destructive competition has faded the contrast that distinguished one from another and technological advances has allowed the distribution of, say, a New York newspaper in Los Angeles, Chicago and Dallas (and Tehran, Beijing, Moscow and Berlin via the Internet which embeds video clips too.)
Advertising that kept the old-fashioned business up and running, and keep customers happy, at least for the older generation and a comforting relapse to read material on physical paper while glancing at advertising. Newspapers (and magazines) have a “push format” design and provide a selection of information, made by editors along with display advertising. But times and behaviours have changed: we are all increasingly pulling information that we require (if only to avoid the mass “infotainment” carpet bombing). We are increasingly seeking specific information by, say, searching on the Internet about shoes, cars or Darfur, or visit our favourite websites or program the machine to search news about that topic and send it to us (or change the TV channel when the stories of O.J. Simpson or Brittany Spears is pushed as news!). Newspapers are in a business plan dilemma as they have straddled both the digital and physical formats. They now have a global reach (and deliver this article from Tehran, for example) but do not have local roots abroad to derive revenue from advertising in the local language. But can they afford to kick the can down the road? It is decision time to rethink the business model.
The reinvention of the business side will entail a grassroots catching up, a completely new business model that is alien to the current mindset of managers as they are increasingly out of touch with understanding of how the youth, the absolute majority pair of eyes focused on computer screens, think about the news products or opinion columns. At the end of this transformation, chances are that news outlets in developed countries will probably have no choice but to remove their tribal mindset and business walls and graduate towards communal, cooperative revenue pools across several platforms (television, online delivery, smart mobile phones, paper version, cross selling, etc.). Perhaps a modern day soviet-style collective farm or a “Kibbutz” for news! Chances are that newspapers in developed countries will not print the “paper”, which is the second largest cost production after labour, in an inevitable trend where migration to the information superhighway and increased input by “citizen sources” to supplement professional journalists.
The newspaper business in Iran has boomed since the 1979 Revolution along the European models of, say, 1970’s France or Italy. There are about 60 dailies, distributed nationally in addition to regional papers. Like other markets in the world, there are a few market leaders, very challenging internet business models (due to lack of advertising revenue) and the rivalry for signing up advertisers. However, wages and labour costs, the top cost centre in the developed world, are generally lower. There are many young people that wish to enter the job market in the sector and they tend to be a vibrant source of original material. This reduces some of the financial pressure when the advertising market is thin, but it is an invariable struggle to run the news business akin to other countries. Aside from a few mainstream papers, many dailies are the speaker’s podium for political parties and movements. In turn, they have their dedicated customers and a reliable targeted advertising. Many readers buy several papers a day to read the views of various political groups especially during these last weeks leading to the next presidential election in Iran. Moreover, and due to relatively limited levels of computer literacy amongst the general population (as computers are operated in English, not Persian), and where is less than 10 national and regional television channels, the newspaper is always in demand, and thus it is the platform of choice for advertisers. The long-term consumption trend and net GDP growth is on the rise in Iran and that is a positive background story for advertising.
The rethink of the newspaper business as a commercial endeavour ought to be connected with a rethink of whether this pushed tsunami of information blast across several platforms is sustainable, or found desirable by consumers that are increasingly crossing to the pull-and-seek side of the business to find the information they want. Alternatively, the only other choice is to internationalise and seek alliances with foreign outlets and open new frontiers to jump the language and cultural barriers. That might be a tall order for papers that have a local focus and one wonders if it will be a simplified creature and a more convenient relapse to follow the call-centre outsourcing business, and produce the main street American paper in India?
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