Australian Print News - A Snapshot of Current Industry, New Business Models and the Evolving Journalism Profession

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  • 1. New NewsA snapshot of the print newspaper industry in disruption
  • 2. AgendaThe Future of News - State of the industry - Implications - Business models for digital newsYour Future in Journalism
  • 3. Preamble – A tale of two disrupted platforms Compact Discs (A platform to  A Newspaper (A platform that distribute music) distributes information) - 10 songs - 100 articles - An average user enjoys 2 songs out - Average user reads 10 in detail of 10 - Pays $3 for the paper - Pays $20 for the CD  New media consumption iTunes - User only reads the articles he/she is - User only pays for the songs he/she interested in enjoys and wants to consume - Pays… nothing(?) - Pays $4 for the 2 songs The story of print is the story of platform disruption – like CDs, content is now available in a more granular form However, content is also commoditized to a greater extent – close substitutes are free
  • 4. State of the industryA snapshot of print news today
  • 5. Print advertising revenue is undergoing asignificant - and likely permanent - worldwidedecline In 2010, 40 US newspapers stopped publishing due to the decline in print advertising revenue – only 2 made the transition online
  • 6. However the Australian market is structurallydifferent due to its few, large population centresand highly concentrated industry 6
  • 7. In addition, 6 of the top 10 news websites areowned by Australian newspaper companies 7
  • 8. These drivers have positioned Australia tooutperform most of the worldwide newspapermarkets until recently 8
  • 9. However, technology-enabled content creation,aggregation and curation has permanently alteredthe news value chain The resulting diffusal of distribution has led to a diffusal of attention and in turn, ad revenue News companies’ decline in ad revenue is largely due to them only owning and exercising control over a subset of the new value chain
  • 10. In a nutshell, that means at an industry level… Readers are worth less More competition Companies no longer own platform Companies no longer own distribution ―Content wants to be free‖ 10
  • 11. The effect is a net loss: while digital ad revenue isgrowing, the scale of print revenue loss is fargreater A significant amount of revenue leaks to pure play online competitors
  • 12. Circulation revenue is likewise declining, drivingthe industry into significant upheaval  ―…Industry employment will decline from 27,715 in 2006-07 to a forecast 20,904 in 2011-12‖ - IBISworld Newspaper Printing or Publishing in Australia Industry Report  ―…The media industrys old guard is struggling with a massive shift online, declining advertising revenues for newspaper and TV, and shrinking market share for free-to-air TV as consumers choices multiply for news and entertainment.‖ - Reuters, ‘Australias Fairfax to slash newspaper jobs as media landscape shifts’
  • 13. The trend of declining circulation is even morestark once corrected for population growth 13
  • 14. And this has put the two largest players in theindustry under pressure to reinvent themselves 14
  • 15. Implications
  • 16. What is at stake? - Independent journalism 16
  • 17. What is at stake? - Original journalism“A thousand bloggers all talking to each other doesn’t get you a report from a war zone –somebody needs to take a real risk, there has to be some infrastructure, some pay and theyhave to go and gather that news originally” – David Carr, media and culture columnist, The New York Times 17
  • 18. Business modelsfor digital news
  • 19. It is instructive for incumbent and entrant alike toreview the new entrants in digital news ecosystem Advertisers and  The new entrants to the businesses industry forming the new Contracts digital news ecosystem fall between advertisers, Readers’ into four broad categories businesses attention - Hyperlocal bloggers and publishers - New News organisations - Non-profit news organisations Incumbents - Ecosystem support organisations plus new entrants Content and Ads Readers 19
  • 20. Hyperlocals A Hyperlocal site provides either a wide range of local news and information for a geographic region, or it could focus on a niche of interest (e.g. high school sports) A platform for members of the community to suggest, contribute, upload and discuss issues Revenue from 3 main sources: - Website Advertising - Events Revenue - Ecommerce Revenue Small organisations of 1-5 FTE, with volunteer support Revenue $100-$400k
  • 21. The ‗Hyperlocal model‘ is already gaining tractionin Australia  Australian Football League (AFL) Media employs 40 journalists to write and produce content for AFL‘s many fans via its website and digital outlets.  AFL Media‘s head of content, Matt Pinkney, says that the aim is to ―create an independent, credible news organisation Subject which reports on AFL football‖. Geographic Area  Significantly, Pinkney was once a leading digital editor at the Herald Sun in Melbourne before Demographic he moved across to AFL Media.
  • 22. Non-profit news organisations The non-profit model works on the principle of independent journalism being a public good Up to 75% of revenue is drawn from a combination of grants and member support Minnpost, a Minnesota non- profit New News organisation received approximately $290K in membership fees in its first 14 months, where approximately 1 in 150 visitors became supporting members
  • 23. New News Organisations New News Organisations combine existing and emerging technologies with a reduced editorial staff and a network of hyperlocal bloggers to engage the community and provide journalism‘s critical watchdog role that the market will continue to demand Revenue breakdown as follows : - News website advertising ~55% - B-C ads and services ~ 25% - B-B ads and services ~20% Organisations of 40-70 FTE, with journalists moving to multimedia and playing a ‗community manager‘ role When established, revenue projected to reach 20m
  • 24. Ecosystem Support Organisations Advertisers and Many hyperlocal bloggers and businesses other small local online publishers have loyal audiences but limited resources and advertising clout Aggregation There are opportunities in building an infrastructure that provides services to the new Hyperlocal news ecosystem, including bloggers, online creation of local ad alliances, publishers and aggregation/curation of sites, Services new news technology and training. We call this entity the ―Framework.‖ organisations Content The Framework will bring value to and Ads the ecosystem by providing economies of scale in the advertising market — for both publishers and advertisers Readers
  • 25. Your Future in Journalism
  • 26. While the industry employee is rapidly declining,The advantages that journalists traditionally haveover other writers still existNon-journalist digital But most of them stillwriters such as lack the clout ofbloggers may create journalists backed byand publish what a reputablecontent… masthead represents:  Quality  Authority  Resources  Access to sources
  • 27. Journalists can thus leverage these advantages toengage with the new digital writers, or move intoan adjacent industry  A journalist may engage digital writers in their space by being: - A content publisher across multiple channels - A potential topical, „hyperlocal‟ subject matter expert - A potential „Community Manager‟ of hyperlocal interest groups and digital writers Quality Authority Resources  Or they may take their new skills Access to sources and industry understanding and make lateral moves into: - Digital content managers/editors - Media aggregators - Media relations - Etc.
  • 28. Many of the roles in the emerging state will value journalism experience Advertisers and businesses BusinessMedia Relations Professional New media aggregator of blogs and news Aggregation Hyperlocal bloggers, online publishers and Services new news organisations Content and Ads Media network Readers community manager Editor / trainer for citizen journalists
  • 29. A question to journalism graduates: Which do youthink would be more attractive to your employer in3 years time? Degree in journalism /  Degree in journalism / media and media and communications – First communications Class Honours  600 followers on twitter H1 average including H1s in cultural perspectives on  15 published articles on the function of the news Meld with over 3,000 views media, global crisis  Part of AU_Lifestyle news reporting and evolution of network journalism  Klout score of 65
  • 30. The preference is backed up by recent researchinto Australian editors‘ hiring preferences When asked about the preferred skills and attributes of recruits:  Almost half (46 per cent) of the editorial executives nominated digital media skills as the top priority.  Other desirable skills were news sense (36 per cent), writing skills (28 per cent) and personal qualities such as initiative, energy and enthusiasm; courage and persistence; maturity, and curiosity.  Personal qualities got more attention than qualifications, with only 21 per cent of respondents interested in new staff holding tertiary degrees. - Journalism at the speed of Bytes, the Walkley Foundation, Jun 2012
  • 31. …And their views on the rapidly evolvingnewsroom  Views from current Australian editors on the change: - “We have to change the cultural fixation with print….It‟s „I work across platforms‟ now, not „I work for the paper‟”. - “I think the biggest challenge for anyone managing journalists into the future… is to direct them, herd them like cats, towards an environment where they are thinking about what they will file for their website as much as what they will file for the newspapers”
  • 32. Conclusion
  • 33. Journalism is at a crossroads, and no one hasfound the answer yet "All the worlds newspaper companies are experimenting with what sustainability looks like…" ―…There is no business model that can support the hundreds of journalists that are employed by companies such as Fairfax" - Margaret Simons, head of the University of Melbournes Centre for Advanced Journalism, 18 Jun 2012
  • 34. Questions?e: jason.darkred@gmail.comli: