Gordon's Republic

Gordon Macmillan

That's what PricewaterhouseCoopes says in its 'Outlook for Newspaper Publishing in the Digital Age' report out today.

The report looks at how the newspaper industry can face up to the structural challenges that have seen paid for titles lose circulation volume while advertisers have been moving online.

The top line findings from its research shows mostly importantly two points that applies across the online publishing world and not simply to newspapers.

Consumers will pay for content - News as commodity - Consumers see breaking news and general interest news as commodities, but there is always a market for high value online content in specific topics. Our consumer research indicates that consumers are willing to pay for this content, but newspapers need to develop strategies for monetising their content and intellectual capital.

Niche Niche Niche - Niche audiences continue to demand specialised, targeted and relevant information. This creates both an opportunity for advertisers to reach their consumers and for newspapers to develop 'hyper-local' or 'local-local' sites addressing content at the neighborhood and suburban level. This is particularly prevalent in the USA.

This supports what people have been talking about this last week, which I have been blogging about and what seems to be the new consensus: that you can (as some still do) charge for B2B and specialist content (as Carolyn McCall highlighted last week) as this is content that people can not get elsewhere.

Here are PwC's other key points which point to the huge role that print still has to play in the future of newspapers (again I think this applies pretty well to magazines as well). This role has become ever more apparent as the print pounds have translated to digital pennies.

Revenue remain with print - Although there is a huge potential for growth online, print remains the largest source of revenue generation for newspaper publishers, and will continue to be so for some time.

The future is longterm - Newspapers have a long-term future and will coexist with other media. However this is unlikely to be either in the formats or volumes seen today and there will some casualties and losses of well-known papers along the way.

Where the value is - Consumers place high value on the deep insight and analysis provided by journalists over and above general or breaking news stories.

Trust and loyalty - Newspapers have been able to earn their readers' trust and loyalty, giving them the opportunity to both lead and follow audiences as they migrate online and into the use of portable electronic media. Indeed, with the core principles of deep analysis and trusted editorial, the medium is secondary to the brand.

Multimedia - Use of video in online news sites gives the feel of a ‘TV-like’ experience (consumers’ favourite medium for news) giving newspaper brands the opportunity to secure online audiences beyond their print readership and into the television audience more generally.

New business models - Newspaper publishers have responded to the economic downturn by increasing their focus on cost reduction. Many are also using multiple platforms and new technologies as channels for content distribution in order to reach their audiences. However, many have still to fully review their existing business models to take full advantage of the innovation in the marketplace and the demands of consumers.

The mobile internet - The rapid adoption of the internet and mobile technology have created a market for mobile devices – particularly for the 'net generation', those under 35 in age. Though the devices give immediate access to breaking news and information, they are low on the list of preferences for accessing information due to the difficulty of reading content on the devices.

Innovative advertising packages - Shift For advertisers, access to mass markets remains key, so major newspaper brands with large loyal customer bases will be high on the spending plans of advertisers. The overall shift from print to online will continue however, so newspaper publishers must continue to develop innovative advertising packages combining both print and online to secure the advertising spend for their brands.

PwC's key questions for publishers as they look to the future:

1. Is your brand identity clear - both internally and externally - and focused on what differentiates you from your competitors?
2. Are print and new media run as separate operations or as simply two different distribution mechanisms for the same core activity?
3. Do you have an integrated paper and online advertising sales team?
4. Are you using online to extend your core audience beyond the traditional print readership?
5. Will video journalism and print journalism co-exist online?
6. What does your audience want from you - and do you know what they will pay for?
7. Can areas of non-differentiation be outsourced?
8. Have you identified non-core activities that should be downsized or stopped?
9. Are you investing today with?

You can read the full report here:

There was this also out from PricewaterhouseCoopers looking more at insolvency, but some interesting bits particularly liked its interesting turn of phrase where it says that "the internet has turned into a burden not a prize" for some media companies.

Clearly here PwC is talking about the large scale investment in digital that has not brought anything like the return hoped for as all those print pounds are traded for digital pennies.

The consultancy firm says that digital assets that were acquired as an option for future gain will move down, if not off, the priority list and for some the internet has turned into a burden not a prize.

However, it does see opportunities ahead "for those who provide a great experience based on quality content accessible across a range of devices". I'm guessing this is more than about the development of a pretty iPhone app.

For publishers, the report goes on to say that their trajectory has been only marginally impacted by the recent downturn (with a 40% rise in insolvencies since Q1 2008) and instead has been hit far harder by the structural challenge of consumption moving to online models than by the recession itself.

David Lancefield, partner, PricewaterhouseCoopers LLP, said: "The move towards Digital Britain could exasperate this trend even further unless publishers can shift their focus to new operating models."

"With consumer confidence at its lowest, the country turned a corner into a technical recession early 2009 – this shift was reflected in the advertising industry, as a third more agencies became insolvent than in the previous quarter. Last year represented the advertising world’s Big Bang, as we saw a collision of severe economic downturn and structural change to online. In this world, grabbing and monetising consumer attention is harder than ever," Lancefield said.

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