As newspaper industry is tumbling down reporting billions of dollar losses in market capitalization, industry veterans call upon the business fraternity to undertake innovative measures to counter the economic downtrend.
They say, by providing mere content, newspaper businesses cannot expect to survive the current economic conditions and that they need to think of workable initiatives such as making maximum out of their digital and online editions. “Any content creator whose sole business is selling their content al a carte will have a hard time surviving. In a world of unlimited digital choice, the cost of creating and marketing content that generates a profit is expensive and difficult,” remarks Mark Cuban.
Commenting in his blog, Blog Maverick, Mark Cuban the billionaire owner of the NBA baseball team Dallas Mavericks, says newspaper businesses must extract maximum revenue from their digital editions, now mostly accessible for free and which can translate into real big money.
“Its not that the newspaper content is not worth it. The problem is that it requires prospective buyers to first value the content, then decide whether they want to go through the hassle of visiting a news stand, calling the home delivery department of the paper, or putting in their credit card information to buy the same online. All this is unnecessary fuss, when much of the same content is available online for free,” reasons Cuban.
Cuban who is also the chairman and president of HDNet, a general interest television channel in the United States, available via cable and satellite television, believes some of the online video sites have rightly adopted interesting strategies which will not only give them additional business but also the much required revenues.
According to him over the past few weeks several online video sites were working to make it mandatory for their customers to be a subscriber of a cable or a satellite TV subscriber, if at all they intend to watch their favorite video shows online. This means if a customer wants to watch his favorite show on an online platform, then he or she needs to be a subscriber of the partnering cable or satellite TV networks.
He says newspaper businesses should also toe a similar line. “Newspaper guys should be knocking on the doors of cable and satellite providers offering the cable TV subscribers exclusive access to the online versions of their newspapers,” remarks Cuban. He says if the newspaper fraternity succeeds in convincing the cable operators to provide a platform for them to sell their products, it could mean several dollars of revenue to them.
Explaining further, Cuban says that newspapers such as New York Times can make big money by seeking alliances with satellite and cable operators such as CableVision, Time Warner, Comcast, Charter, DirecTV, Verizon, ATT, EchoStar et al. For an additional premium of 25c per month, each cable TV subscriber can get unhindered exclusive access to NY Times Online. “Non subscribers will get what Wall Street Journal non subscribers get today, access to some content, but not the most timely or valuable content,” he says.
Cuban says if Times can convince these operators that their subscribers will find value in accessing exclusive online content, particularly if they can become part of their basic or near basic service, “then all of a sudden, the NY Times and any other newspapers will find themselves loaded with a recurring source of revenue that can turn into real money; and at the same time the arrangement could offer differentiated value for the video distributors as well,” he points out.
Even Alan Mutter, long time editor at Chicago Daily, corroborates Cuban’s viewpoint. He says the availability of digital editions at no cost is a lost opportunity for newspaper businesses. The New York Times and its namesake newspaper is an indispensable cultural tool. But the Times doesn’t charge for digital content. Any of us can read Paul Krugman, David Pogue, the Times book review, and the musings of its other top commentators for free. That’s a lost opportunity,” says Alan Mutter in a recently published report in Motley Fool, an Alexandria, VA based multimedia financial-services website.
The Motley Fool report further points out that several ideas on how to save the newspaper industry have floated to the surface in recent weeks. “One calls for a pay-per-story model a la Apple’s iTunes. Another says the newspaper industry should turn to digital platforms like Amazon’s Kindle e-book reader. Hearst has already announced a plan for such a device. Others say that it’s time to think of newspapers as non-profits, funded via contributions and public allocations, a la National Public Radio and PBS,” the report says.
However, Alan Mutter, who today analyzes the industry via his Newsosaur blog, argues the industry must give the customers what they want. Mutter believes publishers aren’t thinking as drastically or as creatively as they need to. “They [publishers] need to stop printing seven days a week if the market can’t support it. It’s a fair point. Why not publish just a Saturday edition and digitally the remainder of the week? Or, frankly, just on Saturday. Give readers what they want and then figure out how to accommodate advertisers within that framework,” reiterates Mutter in the article.
Interestingly, even Joel Brinkley, professor of journalism at Stanford University and a former foreign policy correspondent for the New York Times also believes that newspaper’s biggest shortcoming has been its inability to extract revenues from their online versions. “The newspaper’s biggest problem is their inability to make much money from their Web sites. When the sites were regarded as technology curiosities, there was no thought of charging people to use them. By the time papers realized that they should be charging, it was too late. No one wanted to be the first paper to charge, given that nearly all of the other papers, and other online news sources worldwide, were free. Several papers tried charging, but most backed off,” says Prof Brinkley in a report published in SF Gate.
In the article, “How to save the newspaper industry”- Prof Brinkley is of the opinion that newspaper industry should seek an antitrust exemption from the Justice Department which would allow the publishers to collaborate on a decision to begin charging for their Web sites. “No paper would have to charge, and each paper could determine its own price. But if most papers in a region – San Francisco, Oakland and San Jose, for example – began charging for Web access at more or less the same time, many readers would likely subscribe,” he says.