There is much debate in the Internet Industry about newspapers and many pundits have been writing them off as a spent force for years. Whilst their revenues have dropped considerably and they are set for further falls in classifieds – what is it that they can do to stop the bleeding?
Over the past few years we have seen newspapers become a little like trash magazines, trying to get young generations to buy papers, a strategy that has only cheapened the mastheads and for the most part has failed. With quotes from ‘sources close to Angelina’ and a ‘close friend’ which to anyone who has the slightest amount of grey matter means ‘no sources’ and ‘no friends’ and just a made up story – maybe from a photo!
This type of ‘news’ would make seasoned journalists cringe and really makes you wonder – how can they survive? Newspapers make more money from agents in tougher times – it is a historical fact that in buyer markets – sellers have to do more to get noticed, so this has helped somewhat in recent years. When the going is good and boom times come around – properties do not even get to the papers before they are sold.
There are still some excellent papers out there for the business person – The Fin Revue (Fairfax) I have always found to be reasonably fair – even with rivals companies products. But how can they last?
Newspapers and Magazines in the US over the past year have turned their entire marketing to subscription services and they practically give the magazines away. One of my favourites is Fast Company (Geeks and Cool Stuff), which a 12 month subscription costs $9.95 USD – yes $9.95 and most of the major magazines and newspapers are the same.
In my humble opinion newspapers must do the same here in Australia, they must stem the tide and win back readers and the only way to do this is to give daily subscriptions away for about $10 AUD per annum. This will excite many people into buying papers – I mean why not? Only $10 and it keep the advertisers happy. Remember, circulation is all about advertisers. The bigger the circulation the bigger the advertising revenues.
This is not to say it will stop the bleeding completely – Graeme Samuel gave a talk last year to the media industry and told them that 18-24 year old simply do not buy newspapers – and never will. They want it on their mobile phones, delivered to their computers. So that would have made the execs cringe. Rupert Murdoch has also conceded that newspapers have to change their ways dramatically and that revenues in classifieds will continue to fall. Now don’t forget these will make up the bulk of your buyers in 10-15 years!
This is why it is so important for these big companies to control agents on the Internet, if they lose it on paper, then they think they can make it up online – sorry – wrong tree! However, there is a limit to what agents will spend online and we are getting close to it now. I think an online advertising budget for a single office will max out at around $20,000 per annum.
Now Sunday will always be Sunday without the Sunday Telegraph, and Nine will have to wait until 2009 before 2009 is Nine (well kind of), but one thing is for sure, the next 10 years will see massive changes in the newsprint industry and even more changes online!
One good thing for PBL is the Internet and if the MyHome strategy is successful we will see more product placement than a Big Brother Commercial/Show and we will see on the 9 News and property shows these very placements. If PBL is going to be successful and get agents to pay I think the money will have to come from somewhere other than the budgets for Domain and REA and this means newspapers could be hit yet again.
Now if Google/Yahoo and MSN all get into property, it is going to hurt all current players and newspapers will not know what hit them – ouch, ouch, ouch, ouch and ouch!
Newspapers may be able to keep property in newspaper classifieds for the time being, but long term I think they are going to have to switch off the life support system as only the boldest of newspapers CEO’s will offer papers for free and that is some war I would love to see played out!