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Media Intelligence : 2009 - 2010
newspapers For information on your sector go to www.mediabiznet.com.au Publishers need to charge for content Tony Hale CEO, The Newspaper Works Do you think the subscription model is the way publishers will monetise online content? That is an issue all publishers around the world are wrestling with. Advertisers are still attempting to fi gure out how best to use online from an advertising point of view. Perhaps it’s lost in history now, but it took a while to understand how to maximise the use of television in the infancy of that medium. Similarly, publishers have yet to understand how to generate revenue from the signifi cant online audiences. There are a few successful subscription models around the world, however I am not sure whether any will become a successful model for all newspapers. There is no doubt that publishers need to charge for content. I expect to see experimentation with other models such as micropayments. Perhaps news aggregators will also have to pay for the content they utilise to attract their own audiences. Regarding the small percentage drop in advertising revenues for local publishers, why is the Australian newspaper industry relatively sheltered while the US and UK are suff ering? Newspapers in Australia are in a far stronger position that the UK and US and out perform those markets on all three major benchmarks – revenue, circulation and readership. Australian advertising revenue grew by 1% last year according to CEASA whilst the UK declined by 12% and the US declined by nearly 18%. All markets have suffered due to the global economic downturn, so clearly there are some other contributing factors in Australia that make our newspapers more resilient. Firstly, structural – Australia has a low population density leading to very clearly defi ned newspaper markets that are very well serviced by one or two titles. These have much greater reach into their respective markets than the leading titles in the UK and US. Advertisers benefi t as they are able to reach their audiences quickly and effi ciently. The Australian newspaper market is also concentrated from an ownership point of view with the four top publishers generating approximately 95% of all newspaper advertising revenue. By contrast, the top four publishers in the UK generate 56% of newspaper advertising revenue and in the US it is as low as 31%. Secondly, product investment – the concentration of ownership, readership and population has given publishers the confi dence to invest approximately $730m back into production and technology. Newspapers in Australia are a vastly superior product as a result. There is colour throughout the paper, high quality magazines and colour lift-out sections in most newspapers around Australia. These improvements have enabled Australian newspapers to retain readers and provide more fl exible solutions for advertisers. International newspapers are a physically inferior product. The third factor is print and online synergy – Australian newspapers have managed to increase total newspaper readership by developing popular website versions of their mastheads. These have attracted huge audiences without cannibalising their printed NEWSPAPERS ARE THE LARGEST ADVERTISING MEDIUM IN AUSTRALIA Total 2008 ad spend*: $12,130 million versions. Combined, they have serviced their readers well and have built the stature of newspapers in Australia where they are widely perceived as the most credible source of news and the medium that sets the daily agenda. This is not the case overseas – in the UK the BBC most likely occupies that space while it would be cable television in the US. How can this benefi t the Australian industry? Having a strong newspaper market enables us to plan for the future rather than scramble for survival. Many US and UK newspapers battle to keep their head above water because their owners are vulnerable businesses exposed to the economic downturn. Australian publishers clearly need to adjust their businesses according to the economy, but history has shown that strong companies can emerge in an even stronger position as confi dence starts to improve. Murdoch stated that “Newspapers will never be the same” – what’s your take on this? In order to stay relevant newspapers will continue to evolve, as they have done successfully in Australia for many years. At the moment, the printed version is still the backbone of the industry in terms of readership and advertising revenue so it is incredibly important that the industry continues to invest in the product to retain readers and attract advertising revenue. The online versions of the mastheads have been very successful in attracting readership, which is a credit to the strength of the mastheads and the quality of their journalism. In the future, newspapers will need to embrace the mobile challenge and continue to retain their status as the most credible source of news as high speed broadband becomes ubiquitous and different sources of news escalate. NEWSPAPERS TAKE A FIFITH OF NATIONAL ADVERTISING Total 2008 NATIONAL ad spend*: $6,886 million Source: The Newspaper Works * Excludes classifi ed directories. ^ includes Newspaper Inserted Magazines. MEDIA Trends + Strategy 58 p56-59_newspapers.indd 57 p56-59_newspapers.indd 57 3/7/09 12:06:41 PM 3/7/09 12:06:41 PM
MT Resource 2010