kendoctor150Ken Doctor, media analyst and President at Newsonomics recommends that publishers continue to develop reader revenue while print advertising continues to fade. He spoke during a session at the Media Innovation Tour seminar held at the Poynter Institute in St. Petersburg on March 9.

Reader revenue is the new source of revenue for most newspaper companies, but the boost from paywalls has now hit a bump. Newsrooms, he said, now need to “earn their way back to the community.”

The particular focus should be on the number of loyal customers who are paying for subscriptions or news apps for access, Doctor said.  The future of news business lies in “relationships with community,” so news organizations should focus their attention converting their readership from “users - to readers - to subscribers - to members.”

That requires reconnecting with the community and becoming part of their news. “Relationships matter. We have seen less progress with communities and civic news,” said Doctor. He also emphasized the importance of “little data” - data about readers that tell us who they are, what they read, what they shop for and when and where they read.  Newsrooms need to figure out how to make that data make sense.

Finding out more about their readers is now the most important way to form those connections. “It is gold in this new era of reestablishing and deepening the relationships with the community,” said Doctor. News organizations have to change their thinking from “not what do I have that I can give them, but what do they want.” They can offer quality products and think about increasing costs of their products.

Focusing on unique visitors alone is not the best thing to do

Doctor said that even though 52 percent of US newsrooms have paywalls, the number of people actually contributing to the revenue is really small. “We are juiced up on Google and Facebook” and continue to pay attention to wrong metrics of page views and unique visitors. 93 percent of unique visitors are fly-by visitors, who visit the news site once a month. Only one percent of unique visitors are actually paying customers, according to Doctor.

Newsrooms must generate enough quality content so that they can offer a better product to the readers. “Quality is associated with business success.” Newsrooms are asking for trouble if they continue the recent trend of offering less product for more money and expecting revenue gains.

His advice was to pay close attention to the amount of money newsrooms are investing in better content creation. Paying customers are loyal customers, and we need to increase our cache of loyal readers.

Smartphones may be the best way to connect

Mobile is the new source of revenue. Google and Facebook are effectively using mobile to increase their market share, but the news industry has so far done too little to capitalize on it. Smartphones are now the primary connections and establish an intimate connection with readers. Doctor said that if you look at the smartphone screen of a typical person, you will find very few news apps on the main screen.

Observation of user habits and behavior and producing content and services that deliver the content they want will probably get news organizations loyal, paying readership. News organizations that are somewhat successfully doing this are offering a variety of products based on better understanding of reader data. By 2020 desktop readership will go down to 25% or less of digital. Mobile will be up to almost 75 percent within the next five years according to projections.

Doctor mentioned that any new product that news organizations think about creating should take into account the power of mobile, the promotional aspects of social media and the new readership amongst millennials. Social is probably not going to generate enough revenue for a news organization, but it is a great tool to promote the quality content that news organizations produce.

The crucial question that we need to ask, said Doctor, is “Can we earn our way back into our readers’ lives?” Focusing on the paying readers and what more can we do for them may be the answer. Experimenting with new products and services based on smart user data analysis may still get the industry out of its revenue hole.

For more, watch Ken Doctor’s Poynter NewsU Webinar on Building Strong, Profitable Relationships with Digital Audiences.