The Death of
Newspapers?
Finding business models
in a perfect storm

Who am I?

Long, slow death?
UK National Newspaper Monthly Circulation
2001 - 2008
4,000,000
3,500,000
The Sun
3,000,000
The Mirror
Daily Star
2,500,000
No. copies sold
Daily Record
Daily Mail
2,000,000 The Express
Daily Telegraph
1,500,000 The Times
FT
1,000,000 The Guardian
The Independent
500,000
0
2001 2002 2003 2004 2005 2006 2007 2008
Year
Source: Audit Bureau of Circulations

Why?
• Cyclical
• Structural

Cyclical
Recession hits early and hard:
• More media firms have issued profit warnings in the
last six months than since the 2001 dot com crash.
(Ernst & Young)
• Over the 19 weeks to 9 May 2009, Johnston Press
saw total advertising revenues down 34.4% year on
year.
• In May, Trinity Mirror said that group advertising
revenue declined by 30% year on year

Structural
Demand is declining:
• Disruptive free-sheet business models.
• Lifestyle changes.
• New platforms diluting market share.
Newspaper organisations
evolved to deliver on news print.

Industry response?
• Offline model moved online.
• Product-focused, not demand-focused.
• Little innovation.
• Slow to react to change.
• Online competition ignored.
• Stalled with protectionist arguments.

The result?
• Flooded market
• Web advertising devalued
(About one-tenth of print advertising)
• Traditional print revenues disrupted
(Classifieds, business directories, dating, coupons)
• Control of product distribution lost

Users
(‘000s)
Unique
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Oct-03
Dec-03
Feb-04
Apr-04
Jun-04
Aug-04
Oct-04
Dec-04
Feb-05
Apr-05
Jun-05
Aug-05
Oct-05
Dec-05
Feb-06
Apr-06
Jun-06
Aug-06
Oct-06
Dec-06
The Stat Race
Feb-07
Apr-07
Jun-07
Aug-07
Oct-07
Dec-07
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
Apr-09
Telegraph
MailOnline
Times Online
Guardian.co.uk
Source: Audit Bureau of Circulations

The Stat Race: results

It can not continue
“The current days
of the internet will
soon be over."

But some got it right

But some got it right

Schibsted:
Aftonbladet Profit (EBITA)
300
250
200
SEK (million)
Online EBITA
150
Print EBITA
100
50
-
2005 2006 2007 2008
Year

Dating
Dieting & Fitness
Used Cars Club
Yellow & White
Classifieds Directory
Telephone Directory
= 60+%

Wall Street Journal
Ten-year-old
subscription
service
• Reputation for business news
• Responsive pay wall

Where did it go wrong?
Trough of
disillusionment

Group Exercise
• Where did the industry go wrong?
• How can you use these lessons to avoid similar
mistakes?
– What cyclical and structural issues do you face?
– Is there a strategy that could help you emerge
from a cyclical downturn in a stronger position?
– How might you lead that process?

Industry responses
– Metre-payment system
– The Exclusive “Club”

Industry responses
– Daily Charges
– Considering paid access to specialist
content

Industry responses
– Tip jar
– E-Readers

References
http://delicious.com/joannageary/hyperisland

Thank You!
joanna.geary@thetimes.co.uk
linkedin.com/in/joannageary
twitter.com/joannageary
joannageary.com