The document summarizes the challenges facing newspapers due to structural and cyclical factors. It shows declining newspaper circulation in the UK from 2001-2008. New platforms like free online content have diluted the newspaper market share. While newspapers moved online, they failed to innovate or adapt business models. As a result, web advertising revenues are a fraction of print revenues and traditional revenue streams like classifieds have been disrupted. However, some newspapers like Schibsted in Norway adapted by focusing on online classifieds, generating over 60% of revenues from areas like jobs, real estate, and cars. Paywalls have also shown promise, with the Wall Street Journal gaining subscribers through a long-standing paid model.

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

2. Who am I?

4. 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

5. Why?
• Cyclical
• Structural

6. 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

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

8. 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.

9. 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

10. 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

11. The Stat Race: results

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

13. But some got it right

14. But some got it right

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

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

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

18. Where did it go wrong?
Trough of
disillusionment

19. 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?

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

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

22. Industry responses
– Tip jar
– E-Readers

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

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