Black Ink: Community papers are doing far better than most publications
By Ken Blum
2011 is just around the corner, and when I talk with community news paper publishers, two questions are at the top of their minds for the coming year.
The first: Are we out of the recession?
The second: Is the future of my newspaper going to be electronic, or is print forever?
Here are some random thoughts and opinions concerning these questions.
We are coming out of the recession, and 2011 will be a good year for hometown papers.
However, keep in mind newspapers are not like McDonald's franchises.
Each one faces unique challenges in its unique market. Some will still struggle while others will prosper. But in general, look for five years of growing revenues and profit margins.
Yes, it has been rough going but community papers, as opposed to metro newspapers, weathered the recession far better than most other categories of industry and business.
Most publishers of large and small community papers cut a lot of fat from their operations during the recession.
These lean and mean operations will enjoy a strong bottom line as the recovery progresses.
The larger newspapers have done a tremendous amount of outsourcing to cut staff, many turning entire departments over to contractors and companies based in countries such as India or the Philippines.
What's next? Will copy editors be $2-anhour employees from India? Will papers be paginated and transferred back electronically from China? Will American workers be hired to perform any task that can be done on a computer for $2 an hour overseas?
A scary thought.
Will this outsourcing trickle down to smaller hometown papers? For example, let's say you run a 3,000-circulation weekly. A new service based overseas offers to design all your ads, edit your copy, and paginate the paper for $300 a week.
Do you bite? It's a temptation the larger newspaper operations have embraced.
Is print forever, or are e-papers our future?
Advertising effectiveness will deter mine the eventual outcome of the electronic versus print scenario. Right now, l good old print advertising is far more effective in the vast majority of cases than the current advertising formats e used on the Web.
The only way community newspapers a can or will convert to electronic editions is when e-advertising is both as effective for advertisers and as profit able for newspapers as print advertising. Advertising pays the bills and without this revenue stream a total transformation to e-editions is not feasible or workable.
As my good friend Ed Henninger predicts, "If community newspapers abandon print for electronic readers such as the iPad, the move won't necessarily be because readers demanded the change. First, a model for advertising on these devices needs to be developed. Then, publishers would make the switch if and when an electronic version is a more profitable option than print.
Any change will be business and publisher-driven, not reader-driven."
This means that the decision will not be forced on you in the future. Print or electronic will be a decision – if it ever needs to be made –under your control and timetable.
Fear not –people will always want their local news, and local newspapers will always exist no matter what form they are in.
A hundred dollars. This is the price level needed to really get iPad-like devices with far more features than the current versions into the mainstream.
Yes, I see that happening. The devices will be much more expensive to manufacture than $100, but the real revenue for these companies will come from charges for applications, and a share of revenue from paid entertainment and other media, including newspapers and magazines; just as a major source of revenue for Amazon.com's Kindle is from downloadable books.
One more long-term prediction from my crystal ball that I haven't seen appear in anyone else's to date.
It's in regard to 3-D technology, which companies like Sony are banking on being the next big thing in TV.
I see 3-D emerging to near Twilight Zone capability. You'll put on your hypnoglasses, or enter an enclosed room in your home. Then, the digital 3-D experience will be as lifelike as you can imagine; you'll actually feel like you're sitting in front of Don Corleone's desk when watching a movie like the "Godfather." You won't be able to touch Marlon Brando or smell the Old Spice on his cheek, but everything else will be right next door to reality.
Eventually, newspapers will have access to Digital 3-D cameras that will put readers right into the lifelike scene of a breaking news story, like a fire or tornado. Fascinating. A bit intimidating.
But it's more an opportunity than a problem.
© Ken Blum 2010
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Ken Blum is a specialist dedicated to improving the bottom line and quality of newspapers, from smaller weeklies to midsize dailies. For complete details about how his advising service can benefit your hometown paper, call 330 682-3416 or e-mail firstname.lastname@example.org.
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