In their headlong rush to slash costs, are newspaper publishers in danger of throwing out the baby with the bath water? Jim Chisholm thinks so.
OK, so we newspaper people are big and strong and powerful. But who represents us among the bigger, stronger and more powerful? I would say it is our national, and increasingly international associations, be they trade associations of companies, associations of specific groups such as editors, marketing groups, or dare I say it – journalists’ unions.
My observation is that in recent years, these vital groups of representatives who look after us, defend us, and fight for the values of the newspaper, have seen their resources and funding dramatically depleted.
There have been many, painful, sometimes logical, cuts in the costs of our industry. But perhaps the worst, and dumbest, have been the withdrawal of funding from our national associations that have lobbied our industry’s values and competitive position in an aggressively changing landscape and promoted newspapers to advertisers.
The newspaper industry today accounts for less than 10% of the communications and media industry. Yet we continue to be manipulated, and marginalised by paranoid politicians unwilling to let us expand across media. Microsoft continually abuse their 90% control of the world’s PC software market, meanwhile every newspaper acquisition or venture into broadcast media is scrutinised by megalomaniacal apparatchiks.
Meanwhile, advertisers are abandoning us at a national level because marketing resources are being reduced that should communicate the true value of press. This is also true at an international level.
I estimate that, on average, dues to our national organisations are less than 0.05% of industry turnover. Put another way, for every million dollars of revenue, we collectively spend 500 dollars on representing our vital industry to governments, advertisers, and other stakeholders, through our trade associations.
Across the world, industry representation and central investment in R&D has been slashed from minimal to trivial. While trivial, the consequences of this lack of investment are gargantuan. And the withdrawal of investment and funding are probably the biggest long-term mistakes our industry could have made.
Put this against a backdrop of the massive funding of PR – “corporate propaganda” if I may sensationalise the phrase - which now accounts for over three times the money spent on news journalism.
Our associations – be they functional, academic, national or global – are a vital part of our industry. They provide cohesion against the 90% of the communications industry that isn’t newspapers, and the paranoid elements even within more progressive political systems who seek to limit our expansion. And I’m not talking Sierra Leone. Successive British governments have been plotting against the BBC – probably the most respected news organisation in the world – for decades.
So, as executives decide to further slash and burn their leading industry representatives, they should perhaps consider the following value points:
* Growth and diversity. In Western markets at least, newspapers are inhibited in their potential growth strategies because of regulation which is widely accepted as being out of date, and in terms of encouraging pluralism, counter-productive. Newspaper companies must have more freedom to diversify into other traditional and new forms of media.
* Collective initiatives. A couple of years ago, I put forward the notion that newspapers should work together to create an online newsstand concept where all news media in a market compete within a single paywall concept, where they set price-for-content levels. In one country, I was told that this was not only “anti competitive”, but to quote, “that even discussing such a concept in a meeting would be regarded as a criminal offence”. Google’s new initiative – which I think is a welcome idea in the paywall issue - is apparently seen as being legally acceptable. Has the world gone bonkers? Or are the legislators simply happy that Google is an aggregator and not an opinion former?
* Advertising representation. There are many admirable examples of industry collectivism in terms of advertising development, not least the Classified Ventures project in the USA, which has resulted in US newspapers more or less retaining their share of display and classified online revenues, which is ahead of most other markets. Germany, France, Netherlands, the UK, and notably Australia’s Newspaper Works project, also enjoy initiatives that are focused on the selling of press as a medium. These are generally funded separately to association funding.
* Distribution and technology. In general, the most efficient way to distribute newspapers is through a collective system. In many cases, this is deemed to be anti-competitive. But in the digital world, this is also the case. Individual newspaper companies struggle against the bullying tactics of the major digital players, particularly in mobile. Our industry needs a more cohesive approach to both these issues if it is going to enjoy a better future in the print and digital worlds.
* Press Freedom and regulatory control. It’s not that long ago that an editor in Denmark discovered his phone was being hacked by government officials. The same has happened in Ireland. I mention the BBC above, but legislators in many countries remain paranoid about a free, independent, opinionated press. It is vital that trade bodies exist to uphold their value even in mature democratic societies.
* Best practice. Finally, our associations promote best practice, both at a national and international level. Initiatives lead to technological development, cost efficiencies and market effectiveness.
All of these vital ideas are increasingly being abandoned as newspaper companies seek to marginalise every cost on their income statement. Yes, we all understand that newspaper companies need to improve their profit margins from say 10% to 11%, but is a difference in margin of 20.00% to 19.95% - a decline of one quarter of one percent - really worth the damage to our collective strength?