Digital age creating turbulence, uncertainty and chaos for local newspapers

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Dr Anita Greenhill was recently published in World Financial Review, discussing how local newspapers can survive in a digital age, alongside Dr Gary Graham of Leeds Business School.

The ‘digital age’ of the internet, civic media technologies and web 2.0 is creating turbulence, uncertainty and chaos for local newspapers. This risky environment is now the norm for these titles.

In order to survive, they must face up to the major strategic challenge of first identifying and then implementing a digital business model which sustains itself. Managers need to consider the vulnerable state of local newspapers, against which they must defend themselves, but the picture isn’t entirely gloomy. There are opportunities thrown up by the ‘digital age’, and managers must equally decide how these can be exploited.

The news media needs to look closer than ever before at how the underlying content economy works. Weekly newspapers have found that they are weathering better financially than dailies. In additional, newspapers can no longer rely on geography and demographics for dominance. They must now diversify the value streams of their content.

The challenges are multiple. Print remains the main revenue driver for newspaper publishers, but advertising is in decline across both national and local titles. This leads to major cost reductions and restructuring.

There’s broad consensus that new technologies are key to attracting younger audiences, who are harder to reach through traditional newsprint. Embracing emerging channels also broadens the opportunities for newspapers to monetise content and increase advertising revenue. Yet publishers seem to be having difficulties integrating the variety of news channels, both for their readers and for their advertisers. Paywalls have sprung up at a number of national newspapers, but paid online content continues to be a source of debate in the industry as publishers struggle to determine what, if anything, readers will pay to read.

So what is to be done? Based on the evidence we have collected – from interviews, macro-level trade insights and speaking to industry leaders – we believe that the local newspaper model is not totally bust. They need to rediscover and reestablish their local roots. This will assure readers that reporters are working on their patch as a watchdog and a friend, making the newspaper a vital community asset. Local advertisers will also be reassured that they are reaching their desired market.

This idea of hyper-local titles is especially prevalent in North America, where the large Gannet newspaper group has developed online sites addressing content at the neighbourhood and suburban level. This allows journalists to cater to the interests of special communities, as well as offer hyper-targeted advertising solutions. In Germany, too, news publishers are increasingly targeting niche groups, and thereby businesses who want to advertise to those niche groups, by launching special supplements.

Hyper-locality also lends itself to one particular view of the future of the news media as defined by MIT’s Ethan Zuckerman: the idea of ‘civic participation’. Zuckerman argues that there is a need for local news media to build tools and systems to help communities share information. To do this requires a shift in perspective, towards the development of useful collaboration tools that can be designed to suit the needs of each community.

To rebuild the reach and value of local newspapers, publishers will need to move from a strategy of ‘cost leadership’ to ‘niche focus’. However, a new day in which executives act boldly together to save their industry is hard to imagine; they are at once too independent and too risk averse. To survive, news companies must continue to experiment with new models and products embedded in high quality content and community presence. One thing is for sure: the present reality of chaos and turbulence is set to continue.

Read the full article in The World Financial Review >> 

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Manchester Business School has a global reputation for innovative and influential teaching and research, which impacts business on a local, national and international level. We call this Original Thinking Applied.

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