PEJ: Newspapers are losing $7 in print revenue for every $1 in digital gained
Revenue is just one of the problems facing American newspapers, says a new Project for Excellence in Journalism study. The culture at newspapers, and not just on the editorial side, is as much an impediment to publications finding their way out of the mess they're in.
The study, called "The Search for a New Business Model," looked at "highly granular" data from 38 newspapers of various sizes. The data was verified through site visits and interviews, then anonymized and shared with executives at seven more companies. The frankness of the newspaper executives is striking.
• Digital revenue continues to stymie executives. The papers brought in about $1 in digital advertising for every $11 in print. To get to the mythical "crossover point," at which digital dollars would overtake print, one executive said "was reducing the annual print losses to somewhere between 6% and 8% and growing the digital revenue at a minimum of 30% annually. Another said he thought the rate of digital growth would need to be close to 50%." One executive fretted about how much time they spent on digital versus what it brought in: “We spend 90% of our time talking about 10% of our revenue,” he told PEJ.
>>Daily deal sites like Groupon accounted for about 5 percent of digital revenue at the papers studied. Mobile brought in .9 percent. That's POINT nine.
>>Only 40 percent of all papers are pursuing targeted advertising. Most effort is going to display and classified. 92 percent of papers "said display was a major focus of their sales effort." Video advertising? "Right now, video seems to be more of a goal than a reality. Less than half (44%) of the papers said they were currently selling video advertising. Those tended to be the larger papers (circulation of 50,000 and over)."
• Entrenched attitudes aren't just for editorial. Executives predicted thinner papers: One predicted a future of “probably one-third original content, one-third blogger opinions and one-third community journalism [generated from] outside." But navigating a transition to a news product like that seems like a relative breeze compared to finding someone who can sell it.
>>"One executive said the biggest difficulty facing his company is 'execution,' particularly by the sales staff. 'This is where the game will be won,' he explained, 'in the streets with small and mid-sized businesses.' Another executive said his sales people frankly did not know how to sell all the products they were offering."
>>The majority of executives "indicated they had experienced difficulty recruiting digitally fluent ad sales people. One reason, they admitted, is the perception of newspapers as a deeply troubled business. A number of other executives told us they were still trying to figure out how to best integrate digital-only sales people with their traditional sales personnel."
>>Despite training programs for digital at nearly all papers, "most of these papers are still largely print first operations, or print and digital together, when it comes to the composition of their sales staffs. Sales people concentrating largely on digital are a distinct minority."