1. New News
A 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 industry
A snapshot of print news today

5. Print advertising revenue is undergoing a
significant - and likely permanent - worldwide
decline
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 structurally
different due to its few, large population centres
and highly concentrated industry
6

7. In addition, 6 of the top 10 news websites are
owned by Australian newspaper companies
7

8. These drivers have positioned Australia to
outperform most of the worldwide newspaper
markets until recently
8

9. However, technology-enabled content creation,
aggregation and curation has permanently altered
the 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 is
growing, the scale of print revenue loss is far
greater
A significant amount of revenue leaks to pure play online
competitors

12. Circulation revenue is likewise declining, driving
the 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 industry's 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, ‘Australia's Fairfax to slash newspaper jobs as media landscape shifts’

13. The trend of declining circulation is even more
stark once corrected for population growth
13

14. And this has put the two largest players in the
industry 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 they
have to go and gather that news originally”
– David Carr, media and culture columnist, The New York Times
17

18. Business models
for digital news

19. It is instructive for incumbent and entrant alike to
review 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 traction
in 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 have
over other writers still exist
Non-journalist digital But most of them still
writers such as lack the clout of
bloggers may create journalists backed by
and publish what a reputable
content… masthead represents:
 Quality
 Authority
 Resources
 Access to sources

27. Journalists can thus leverage these advantages to
engage with the new digital writers, or move into
an 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
Business
Media 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 you
think would be more attractive to your employer in
3 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 research
into 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 evolving
newsroom
 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 has
found the answer yet
 "All the world's 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 Melbourne's Centre for Advanced
Journalism, 18 Jun 2012

34. Questions?
e: jason.darkred@gmail.com
li: au.linkedin.com/in/jasontamarawidjaja/