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Can the iPad Change the Newspaper Business? March 29, 2010

Posted by David Dirks in business strategy, Dealing with change, Dealing With Competitors, Solving Business Problems.
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Among all the things we ponder about the new iPad, one of the most talk about and debated issues is whether or not an iPad-like device can impact the newspaper business.  My answer, now that we know the capabilities (and that more will be coming soon in terms of software for the iPad), is a resounding ‘YES’.  More than anything, iPad devices will change the economics of the business in a positive way.

We’re so wedded to the printed page that it sounds crazy to suggest that any paper can afford to go totally online with a PAID subscriber base.  But it can be done.

How?  By allowing newspapers to cut costs dramatically.

Let me first explain what I’d do.  First, I’d offer only an online version of the paper and price it competitively.  That means eliminating the printed version, which accounts for a substantial percentage of operational costs.  Second, for subscribers that signed up for extended subscriptions, like 3 to 5-years or more, I’d also offer to sell them the device for a major price reduction.  Yup.  Just give it to them  for far less than if they bought the device from Apple or some other producer.  Or, if they don’t want an iPad, give them a netbook instead.


I thought you’d ask that question.  For one thing, if I can lock a subscriber in for a long term period by enticing them with a device they can use to read the paper and do other things, I’m all for it.  But there’s a far bigger reason for doing this: going online means you’ll take out substantial costs that are currently embedded into your publishing business.  Like printing each daily edition and the total production costs involved in doing that.

If you can take out major costs in your business but still deliver a valuable product everyday (via online instead of printed paper), you can improve your profitability dramatically.

How will subscribers react?

At first, there will be some short term gnashing of teeth and discomfort but only for those who are technologically slow-adapters.  Change has a way of doing that.  However, by reducing your production costs dramatically, you can offer subscribers a better subscription rate to entice them to the online version…or throw in a netbook or an iPad device for subscribers who are willing to lock-in their rate by extending it to 3-5 years.  Think bigger and longer here.

Improve the Subscriber Experience

I’d also make sure that the online version offers the ability to customize it to the readers needs.  You input the content and organize it then let readers determine how they want to see it online.  Wouldn’t be great if I could tag an article or column so that I’d get an RSS feed when new content on that subject is posted again?  Let’s find out how readers like to see and consume their information and re-engineer the online experience for them.  We need to move the online ‘wow’ factor up a few notches here.

Here’s another twist on enhancing the subscriber experience:

Combining the Best of Print/Digital/TV/Radio

If you’re not engaging your reader on a constant basis, then what’s the point?  Instead of having a shelf life of  day, a digitally accessed version of the paper breathes life into the content.  What a platform like an iPad really does is gives newspapers a chance to give local TV and radio a run for their money.  If you can embed an online news channel (via digital video feeds) with a radio platform (like podcasting), with an online print version of your paper, you’ve got the makings of an advertisers dream.

Of course, you see video along with podcasting embedded today with stories.  One of the best-in-class examples of this is the Wall Street Journal Online edition.  Not only that, but they charge for the online version too.  Media-driven tools like the iPad will allow publishers to move deeper into the value they can provide their subscribers.  With a digitally-focused product, publishers will be able to embed other types of media into columns and stories to make them come alive.  Adding additional content like pdf files that provide additional information for the reader who wants more info will be key.

The embedded video is something everyone seems to do these days.  However, what if you created an online, LIVE video webcast…with newsroom that looks the one on TV?  For local news and information, nothing beats my local paper, The Times Herald Record (full disclosure: I write weekly columns for the paper…but that doesn’t make it any less great!).  A live video webcast is the answer for providing real time updates of news events as they happen?  Or live interviews?

The iPad also serves as a way to more effectively repurpose the great content that is created by daily newspapers.  Special online ‘books’ of specific local information can be developed and then accessed by all those paid subscribers.  Normally, after a story or column is printed, it seems lost forever.  Why not look for opportunities to create information books for local and regional issues that can be read on a iPad?  Two issues here: repurposing content for revenue generation and organizing previous content so that it is easily found by subscribers.  How about links to previous related stories?  You could just go on and on.

For those who insist on reading hard copies of stories or want a copy for ‘old time sake’, they can print as many stories as they have paper for.

Say no to page count restrictions!

Today, section editors are restricted to daily page count restrictions.  Let’s unshackle journalism with this old-school financial measurement.  Content to advertising revenues…it’s a good financial measurement but what if you didn’t have the cost of printing paper anymore?  What if your only limitation was server space?  There’s no reason for having page counts  when

How would advertisers react?

Of course, nothing gets done in publishing if we don’t have advertisers.  I’m sure at first, there will be more than a few who will not know what to do or say if they can’t see or touch their ad on anything but printed paper.  However, remember that our goal would be to reduce production costs (no printed paper!) as more than an offset for any temporary reduction in advertising revenues.

If newspapers  stay focused on growing and retaining their subscriber base online by creating great and dynamic content that keeps them engaged on a 24/7 basis, the advertisers will be there.

Making Online Publishing More Effective for Advertiser’s

Think about this.  What if advertisers had their ads place next to topics in the paper directly related to their business?  In addition to random ad placement, advertisers could also get the extra benefit of multiple ads in different sections for one price?   The digital online platform gives advertisers the ability to pay an incremental amount above their 1st ad in order to place their ad in several different sections of the online ‘newspaper’.  In other words, the higher the reader ‘views’ on one section of the paper, the higher the price you pay for your ad to be there or some variation therein.  Special ‘instant coupon’ sections that make it easy for customers to download and print coupons.

My point: focus on building your market share with long term subscribers by creating engaging content that readers want and you needn’t worry about advertisers.  Advertisers will follow their customers.  Keep their customers engaged in your online content either in a PC or an iPad-like device and you’ll win.

Investing in More Journalism

At the end of the day, we want to preserve our heritage of professional journalism.  So let’s take some of the savings from not having to print an hard copy edition and invest in more journalism talent or work to retain the assets we have.  Give journalists the tools like the laptops and video camera’s they’ll need to capture the local news wherever & whenever it happens.

Cutting out the printed edition of a paper is a gut-wrenching experience for sure.  However, with media-centric and consumer friendly tools like the iPad, it’s only a matter of time before printed editions will be just too expensive to  produce. Besides, readers like me, who are loyal and pay the subscription fee aren’t too pleased to see all the freeloaders getting the same content online that we pay for.  I pay for the privilege of getting a printed paper delivered to our door even though I (and those who pay nothing) can get the same content online for free.  Who’s the crazy one here?



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