How Online is Transforming the Newspaper Industry Tuesday, June 26, 2007 Penn Club, New York Ken Chandler, CEO, Chandler Media
Council Member Biography Kenneth Chandler is the CEO of Chandler Media, a consultancy that provides communications strategy and media mentoring to senior executives. Mr. Chandler has experience on three continents and spent 30 years as a top editorial executive at Rupert Murdoch's News Corporation. He was Editor-in-Chief of the New York Post for six years and then became its publisher. He served twice as Editor of the Boston Herald. He was also Executive Producer of Fox TV's "A Current Affair" and a founding editor of Star Magazine. Mr. Chandler began his newspaper career in England, rising from trainee reporter on a weekly newspaper in London to working as a copy editor on Fleet Street's major dailies. It was there he joined the Murdoch organization an an editor at The Sun, the largest selling English-language daily newspaper in the world. Mr. Chandler also spent 15 months in Singapore helping launch an English-language daily newspaper. There, he supervised a staff of Chinese, Malay and Indian journalists.
Table of Contents Present and future trends related to the newspaper business The implication of the internet and declining readership Consumption Patterns (viewing habits, competition for eyeballs, and changing business models) Newspaper and online advertising trends
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40 years in the newspaper business! 1965: Stratford Express, London, 1970: Singapore Herald 1972: Freelance on Fleet Street 1974: Launche Star Magazine, New York. 1978: Joined N.Y. Post as Managing Editor 1986: Editor-in-Chief, Boston Herald 1993: Executive Producer, A Current Affair
40 years in the newspaper business! 1993: Editor-in-Chief N.Y. Post 1999: Publisher, N.Y. Post 2002: Editor-in-Chief, Herald Media 2006: Chandler Media
40 years of turmoil EVENING NEWSPAPERS BITE THE DUST More TV viewing, less time reading newspapers Expansion of local TV newscasts More people commuting by car Sports Radio, ESPN bring instant results Stock prices available by computer Metro traffic congestion hampers efficient P.M. delivery
40 years of turmoil... And then: ALONG COMES THE INTERNET!
... And just when you thought it couldnt get worse: BROADBAND ! 40 years of turmoil
Just the facts, mam Newspaper circulation plunges for third year in a row Decline of 7-day a week subscribers Competition from free newspapers Growth of online news consumption
Just the facts, mam Biggest losses in large Metro markets* More internet users and broadband penetration Competition from suburban dailies Free dailies on mass transit The New York Times factor Data: The Poynter Institute
Its all downhill The decline began in the 1990s with the death of Evening newspapers...... And worsened with the advent of the internet and broadband
Why people stopped reading newspapers Dont have time 23% Inconvenient 10% Biased/opinionated 8% Dont like to read 7% Inconvenient to get 6% Boring 6% Cost/not free 5% Causes clutter 5% Data: The Poynter Institute
But wait, theres some good news! There are 1,500 newspapers published every day in the U.S. Combined circulation of more than 53 million Each copy is read by an average of 2.3 people Data: Newspaper Association of America
But wait, theres some good news! Daily newspapers still reach a majority of adults in the U.S. every day Daily readership 51% Over five days 76% Data: Newspaper Association of America
Sunday readership 58% Over four Sundays 72% Sunday circulation totals 55.2 million Each copy on Sunday read by 2.5 people Data: Newspaper Association of America More good news!
Some young people still read newspapers Two-thirds of Americans aged 18 – 34 are at least once-a-week readers Only 35% of ages 18 – 24 look at a paper each week
Putting out the best spin HOW TO BEST MEASURE NEWSPAPER SALES AND READERSHIP? Traditional method: The number of copies sold each day
Putting out the best spin THE NEW METHOD? The number of readers for each issue, PLUS Unduplicated audience for specialty niche publications, PLUS Unduplicated readership of newspapers and their websites
Other options WHAT ABOUT E-mail alerts RSS Podcasting Future technologies? How do you count them?
The future Has the business model for newspapers failed? Is the business in an irreversible decline? Or an emerging business in transition?
Two ways of looking at it Newspapers are in a period of protracted decline, Warren Buffet, May, 2006. Newspapers cant cut their way to the future, Jeff Johnson, former publisher, L.A. Times.
Dont tell that to Rupert Murdoch! Poised to win control of the Wall Street Journal How hell make the Journal an international franchise – and a better paper! He understands the need to invest long-term in content He uses huge profits from his brash tabloids to subsidize serious papers like the Times of London and The Australian Hes not beholden to Wall St.
The next economic model News organizations becoming niche players Its what they chose to cover, not how they cover it Major metro dailies cut back foreign bureaus, focus on local, local, local! Newspapers have diminished ambitions Journalisms biggest challenge: Shrinking resources
The next economic model FOUR PILLARS OF REVENUE ARE CRUMBLING Circulation Classifieds Traditional department stores Leverage to raise rates aggressively every year
Cutting costs Newspapers struggle to cut costs and the newsroom is always the easiest target, but EXCESSIVE NEWSROOM CUTS: Lessen reader appeal and circulation Value to advertisers
Meet the enemy THE BIGGEST PREDATORS FOR AD $$ Google Craigslist
Meet the enemy... AND FOR READERS: Wikipedia MySpace YouTube
Back to the Future Wall St. values newspapers less than private investors Does ownership by public corporations still work? Do the demands of Wall St conflict with the demands of management? Are private owners the future of just vanity play?
Ending with optimism Why newspapers WILL survive The need for original content Which owners will be most successful