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
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
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?