Not that long ago, newspaper publishers were afraid to put their content on the web for all to see. Putting stories up for “free” would erode circulation and ultimately sink their print flagships, the argument went.
But after years of soul-searching and failed experimentation with limiting content flow to the web, publishers have surrendered to the Internet revolution, even as television and music executives continue to battle the forces of digitization.
Long derided as an industry a bit quaint and out of touch, newspapers have arguably figured out the Internet a lot faster than many other media. “There are a lot of folks online who won’t look at print product; we may as well capture them as readers,” says Michael Sifton, president and chief executive of Sun Media Corp.
The scion of the Sifton newspaper empire-and former head of southern Ontario publisher Osprey Media, purchased by Sun Media parent Quebecor Media last year-Sifton is currently playing catch-up with other publishers when it comes to the tabloid chain’s long-neglected web presence.
The Toronto Sun’s online platform, for example, is in the midst of an extensive makeover that will produce a site with more video and interactivity-features that online readers at most North American newspaper sites now take for granted.
Just like the scrappy Sun chain, Canwest Publishing aims to leverage the goodwill and brand power of its stable of venerable newspaper properties as it migrates content to digital formats. “It’s in the paper today, but it’s transportable in other ways to online,” says Dennis Skulsky, president and CEO of Canwest’s publishing division. “Whether that be through websites, through digital products, through your cellphone, Blackberry or other things.”
Industry watchers say Canadian newspapers have done a better job adapting to the digital revolution than their U.S. counterparts. Part of that is due to the fact that readership measurement is tied less to the physical print product here than in the U.S. due to the prominence of NADbank as a key measure for media buyers. That has freed publishers from the worry of propping up print circulation numbers at the exclusion of all else.
“We have over the last year shifted from looking at the audience we serve as just being measured by pure circulation,” says Skulsky. “Now we look at our businesses as aggregated audiences. When you do that, suddenly you have more people looking at our content. Technology, if anything, has put new life in our business.”
Skulsky acknowledges the shift to digital platforms puts pressure on publishers to convince advertisers that their expanded offering is more valuable than the print product alone. “It’s clear that the measurements are under more scrutiny than ever before. It’s an important trend and it is not going away.”
The demands of the digital world have also forced newspaper publishers to transform from once-a-day production schedules into 24-hour news operations. Faced with myriad electronic news sources ranging from the web to TV to that first “newspaper killer”-radio-information-hungry readers are less willing to wait for the newspaper to appear at their doorstep than ever before. “If something breaks [in the early afternoon] we are 12 hours away from printing,” notes Skulsky. “In today’s day and age, that’s not good enough.” Instances of editors sitting on stories until the next day are now exceedingly rare, he adds.
In its “2008 Advertising Planbook,” Canwest’s Pacific Newspaper Group espouses a “web first culture” that calls for breaking news to be immediately posted to Vancouversun.com and Theprovince.com -augmented by audio, video and photo galleries-with a full story appearing in print the next day. Canwest points out that the two websites attract a combined 700,000 unique visitors and 7.4 million page views each month, while the use of Internet cookies enables them to serve ads based on how readers navigate through the sites.
Like the Sun and other Canadian newspaper operators, Canwest originally tried to “lock up” its content online; it was one of the last to reluctantly conclude that effort was bound to fail. “You can’t force people [to buy] information,” says Skulsky. “The business model just has to be different and you have to monetize it in other ways. So we are pretty wide open now on our websites.”
Given the speed at which the balance is shifting from ink and paper to bits and bytes, the day may not be far off when the term “newspaper” disappears altogether.
“I hate to call them newspaper companies now because they are really in the news and information business and they are looking at a whole bunch of different ways to get news to Canadians,” says Anne Kothawala, president and CEO of the Canadian Newspaper Association (CNA). She contends that papers have staked out a position as a credible source of news in an environment cluttered with blogs, obscure sites and niche information sources. “At the end of the day, they are a trusted brand in the marketplace. When people are going to do a search online, if one of the mainline newspapers comes up, they know that is a trusted source.”
Kothawala points to an Internet shopping and advertising study from her U.S. counterpart, the Newspaper Association of America, which found that one-third of those online visited a paper’s website over the past 30 days and those visitors tend to shop online more than surfers in general. “In the classified area, which of course is one of the areas that has full-on migrated to the web, a lot of newspaper websites have done a pretty good job,” Kothawala says. “As a percentage of their overall ad revenues, it is still pretty small.”
One of the main challenges Canadian papers face, she notes, is the “negative narrative” from south of the border. “It sort of ends up dominating the landscape. People read about that and they figure there is no difference between the U.S. and Canada, so the Canadian newspaper industry must be sinking.”
In the U.S., a constant stream of bad news flows in the form of newsroom layoffs, circulation declines and seemingly weekly paper closures. The U.S. industry is reverting to a series of one-newspaper towns, says noted Toronto newspaper consultant Len Kubas, while the Canadian business continues to be vibrant.
Armed with a recent survey of 500 daily newspaper executives and managers on both sides of the border, Kubas finds that pessimism about 2008 revenues is greatest among the publishers of big U.S. papers, while Canadians are generally optimistic. “It’s quite striking,” he says. “The level of confidence in the future, the prospects for future growth are significantly better in Canada than in the United States.”
Kubas described online expectations as the “one bright star” for North American publishers. Overall, 71% of executives said they expect a “large increase” in online revenues this year. Perhaps because the financial pressures are greater on U.S. papers, Kubas has found the Internet accounts for a greater portion of ad revenue there. Big American papers count on the web for between 8% and 10% of revenue, compared with “probably 4% to 7%” in Canada. “It varies,” says Kubas. “The bigger the paper, the more the Internet is a player.”
Still, the shift to online represents “the biggest challenge” for papers, he concludes. “How do you take the legacy print business and adapt it and refine it for the digital age where you’ve got Google AdWords and mobile Internet applications? That’s the challenge-not the technology, but the processes that have saddled the newspaper industry for 100 years.”
