Archive for Commentary
A commentary piece by Kirsti Knolle came through the Reuters wire today, and it was jam packed with a lot of information that the industry already knows. It proves the point that we’re really good at observing what is actually taking place around us and we’re even better at discussing ad nauseum the things that have already happened. But where are the people who can tell us where publishing is headed?
There is a job for these people, these aptly-named book futurists, and they’re out there making their predictions and projections. People like David Houle and Kristen McLean attend various conference and make insightful speeches, and then they are left asking those in attendance the very same questions they asked at that very same event, only a year before. And probably the year before that.
One thing that Knolle’s article only touches on and is vital to the continuing growth of the publishing industry is better access to data. Right now, book data is a tight-lipped secret, guarded over and only discussed in closed door meetings. But how can an entire industry adapt to shifts and changes and fall in line with solid predictions, when no one is willing to share the information right in front of them?
It’s good to know that, according to Knolle’s article, one thing hasn’t changed: we still hate Amazon. I’m not sure why and I’m not even sure that most other people know why, but we do. They’re too big, but more importantly, they’re too radical. They do crazy things like let everyone publish a book, they pay their traditional authors monthly instead of quarterly…heck, their CEO even bought a newspaper at a time when print news media is fighting to go digital. We fear them for the changes they bring about across the publishing spectrum, and we hate them for being a disruptor.
One thing that Knolle does make clear throughout the piece is that eventually authors and publishers are going to come around to the idea that it really is all about the readers. Social reading is on the rise and fan interaction with authors via social media is becoming more and more commonplace. Readers are even developing a semi-brand loyalty to publishing houses and imprints, knowing what kind of content to expect from the brand. The true powerhouse driving publishing is slowly emerging as the reader.
Wherever the publishing industry ends up, both in the near future and the far, only one thing is certain: it won’t look a thing like it does now.
Many of the leading digital book stores all offer self-publishing programs. Kindle Direct Publishing, Nook Press and Kobo Writing Life all are viable platforms for indie authors to submit and sell their eBooks on a worldwide scale. Even Apple has got into the game by pulling curated content directly from Smashwords. All of these stores have a single thing in common, they list self-published titles side by side with traditionally published books. This is not a viable long-term strategy and these stores need to revise their approach.
A recent firestorm has erupted due to hundreds of adult eBooks with topics ranging from threesomes to incest are being listed in the same category as kids books. This has resulted in UK bookstore WH Smith shuttering their entire online bookstore. Kobo is has deleting close to a thousand titles on their platform and giving a scolding to the vanity presses who are responsible. Amazon and Barnes and Noble are addressing this issue in their own way, but are not publicly divulging anything.
Why hasn’t the industry embraced a dedicated self-publishing section and instead are listing the books right beside traditional published content? We have asked this very question to all of these companies at Book Expo America, Future Book and the Frankfurt Book Fair. Most have said their is no distinction between a self-published title and one done with a major publisher. A self-published section by its very nature might have a negative condentation. The bookstores basically have a vested interest in selling indie titles intermixed with everything else, because they make their commissions either way.
I think its very important for all major bookstores to have an indie section because small publishers and indie authors are abusing the system. I have seen many duplicate content with different titles and cover art listed in different categories in order to be visible. You might have an hardcore erotic book listed in Romance, Paranormal, Mystery and Thriller. Indies know that the more categories you are in, the more likely you will sell more titles. In other cases indie authors are stuffing their description and meta data with specific keywords to try and get their book to show up amidst popular searches. You even now have authors changing their pen name and book title to be very similar to popular authors. E.B James is one example of an author who capitalized on the whole 50 Shades of Grey gravy-train.
Major Publishers such as Penguin and S&S have seen their digital revenue increase to 24% within the last year. eBooks are doing nothing but generating more money and self-publishing is on the rise. With more titles being added every day by anyone with a word-processor the old way of listing the titles in the bookstore are not cutting it anymore. The firestorm about Kobo, WHSmith and adult content is nothing new, these books have been there for a longtime. If digital bookstores continue to maintain the status quo this can be an even bigger problem within a few years. eBook discovery will suffer and parents who buy innocently sounding books like “Daddy’s Playtime” might scar their kids for life.
e-Readers are a technology that is relatively fringe in nature and has seen its growth stymied by the rise of tablets. E-Ink Holdings is the company primarily responsible for 90% of all e-Paper technology currently on the market. Last quarter, they lost $33 million and has been in constant decline for the past year. What can turn the e-paper industry around and have a greater market appeal? The answer is relatively easy: split screen cases for phones.
Plastic Logic and Pocketbook have been working together on a new high concept product that will see production begin in October. It basically is a phone case, but instead of it being made of leather, it has an e-Ink display panel. Built within the new Pocketbook app in development, users can switch an e-reading experience over to the e-ink display, instead of the LCD Screen. The two companies have announced that they are making a new model for the Apple iPhone.
A recent Pew Research report stated that 91% of the United States population has a cell phone and 61% have verified it to be smartphones. Major companies such as Barnes and Noble, Sony, Kobo, and Amazon all make solid revenue by selling eBooks to phone owners. The main problem with reading on small LCD screens is that readers end up straining their eyes and often get distracted by the multimedia. Having a split screen e-ink panel built into a highly functional case can minimize those issues.
In the next year, these types of display screens will catch on and companies like Kobo might see the benefits to offering mobile phone companies a subsidized case for new activations. eBook credit may also be offered as a further incentive to lure readers into their particular ecosystem.
Likely all the major players in the e-Reader and smartphone space are looking at this new technology as having high potential. Not a single unit has been sold yet, but something is compelling about a simple low-cost accessory that gives a full e-reading experience.
We live in a divided world where some people buy digital and the vast majority still buy the real thing. Major publishers are seeing 24% of their global revenue stemming from eBooks and print still reigns supreme. The gap is quickly closing and many industry experts agree the total eBook market will account for $9.7 billion worldwide in 2016, more than three times the $3.2 billion in 2012. Bookstores have always played a pivotal role in book discovery and book culture in general. How will the bookstore change when digital becomes the preferred format?
The quintessential bookstore has changed drastically since 300 BC when scribes would sell books directly to philosophers such as Plato and Aristotle. It also is easier to start one, then it was in France. In 1810 Napoleon created a system by which, a would-be bookseller had to apply for a license (brevet), and supply four references testifying to his morality, and four confirmations of his professional ability to perform the job. All references had to be certified by the local mayor.
Bookstores large and small are hubs of social activity and drive book culture. Not only can you find a large selection of detectible delights to purchase but also meet authors and participate in discussions. It is quite common in New York for a local bookstore to organize parties or wine nights for companies such as Flickr.
Book discovery is central to bookstores and they invest significant time and money into aesthetics. Barnes and Noble, Indigo and WH Smith all have it down to a science on the art of product display and maximizing space to visually draw the eye. Your average best seller shelf is filled with vibrant colors and display stands hype up other notable authors or themes.
How will the modern bookstore change when by 2015 the amount of digital books sold will reach 50%? We have seen the collapse of Borders in the US, Whitcoulls in New Zealand and RedGroup in Australia. Thousands of small bookstores all over the world have also closed due to readers shifting to digital. How will bookstores transition from exclusively selling physical books to actively promoting eBooks?
The one worry many bookstores face is being a showroom for 3rd party eBook companies. This is evident in the relationship with bookstores that belong to the American Booksellers Association and sell books from Kobo. The indie bookstore makes very little commissions on each eBook and relies on selling physical books to stay in business. Barnes and Noble is the only one in the world with quite a large ecosystem of content and makes hefty digital returns.
Indigo, Chapters, WH Smith, Foyles and many other bookstores all sell tablets and e-readers in their stores. Over the course of the last few years, reading devices have been a boon to these stores and they are seeing modest returns. Indigo recently has been launching a series of Tech Zones, which significantly increases the size of their product display area. They now sell iPad, iPad Mini and an assorted array of new e-readers and tablets. When customers buy these devices, where do they go to buy books?
The bookstore of the future must develop their own eBook infrastructure in order to preserve their own identity and maximize profits. It is critically important that major chains develop their own digital bookstore and sell eBooks directly to their shoppers. It is simply not sustainable to encourage all of your patrons to buy the digital editions from Amazon or Apple There is always more money to be made by phasing out the middleman and reaching your audience directly.
Bookstores are not positioned well to start their own online eBook system. I have heard on many occasions that for the most part, they have all lost touch with the publishers. In the past, great relationships will directly forged with the publisher and that is how the stores bought their books. Now, its all agents and sales reps, the average bookstore never even speaks with the publisher anymore. The majority of stores now deal with companies like Ingram, and rely on them for books, magazines and everything else. With no direct line of communication with the publishers, it is going to be a long-road to cultivate a relationship and get their own digital bookstore going.
In the end, bookstores need to develop their own bookstore and develop a series of apps for readers to use. These need to be loaded on any tablet or e-reader that their store carries. If the hardware vendor does not want to play ball, you ditch them. Bookstores sustain themselves from selling books, magazines and hardware. They need to unshackle themselves from a strict reliance on a 3rd party and bite the bullet and develop their own digital storefront.
I have attended many different publishing and technology events this year, such as IDPF and Book Expo America, and covered O’Reily Tools for Change, Digital Book World, FutureBook and the London Book Fair. I have sat in on close to 70 different speaking engagements and there is one consistent theme. It is trendy to hate on Amazon.
Many speakers are capitalizing on anti-Amazon sentiments to attenuate a point or to give them instant credibility in the audience’s eyes. It’s quite easy to get a cheap pop by insulting them or to make a lighthearted joke. Almost every single speaker this year referenced Amazon or painted them in a negative light.
It is quite easy to go after a target that has seen monumental success and pioneered both e-Readers, eBooks and digital publishing. Amazon gets unjustified hatred just to get a headline.
I always laugh to myself when even well-known authors or owners of other publishing websites hate on Amazon. They often do it at the very beginning of their speaking engagements or when answering audience questions. I can expect about half of the speakers will do this and I laugh about their consistency to hate. You don’t have to insult a company or put them down just to illicit an audience response. Sure, it’s a company that everyone knows, but there is zero point in making yourself look like an idiot by jumping on the bandwagon.
Amazon is the most profitable eBook company in the world and has the most dominant line of e-readers. They have the most successful self-publishing platform and give free digital copies away when consumers buy the print book. They make the most money out of all the other resellers online. People try and emulate them in this sector, just like so many tablet and phone companies tend to emulate Apple.
I implore the greater internet at large and public speakers at publishing events to think twice before mindlessly placing blame on Amazon to get a cheap pop. If you have to seem relevant through insults and finger pointing, you don’t deserve to have people take what you say seriously.
You’d be hard pressed to attend a publishing event and hear someone sing the praises of the largest online retailer in the world. Amazon, who started life as a book and ebook selling website, was at one time the darling stepchild of the publishing industry, a way for the once-Big Six to reach a potentially larger audience than they were at the time. They were happy to pat Amazon on the head for a job well done if the retailer could help them sell a few more books.
But from its humble beginnings, Amazon grew to be a force to be reckoned with. With a global reach and its dominance in both the book selling and book publishing industries, more than a few frowns appear when you talk about Amazon with publishing industry professionals. It has even been dubbed “The Evil Empire” in some circles.
So when did the transition happen? Was it when Amazon decided it wasn’t enough to make a few cents per copy of books that the industry still had complete control over? Was it when ebooks came along and the technology giant proved that low-cost, instant access, digital reading was not the flash in the pan that critics predicted?
Or was it when Amazon threw open the gates with KDP and let anyone become an author?
While the fear and loathing were already well underway, the final straw in the coffin for Amazon’s reputation in publishing came with the creation of its own traditional publishing house, Amazon Publishing. The company brought industry icon Larry Kirshbaum to lead the way, and quickly turned a lot of long-held customs in publishing on their heads. Amazon Publishing offered higher royalties than traditionally published authors were used to receiving, as well as discarded the quarterly-payouts system of royalties in favor of the monthly payments that even no-name self-published authors enjoy.
But whatever the cause of the animosity between Amazon and the rest of the industry, there still begs one question: if everyone hates Amazon, how did they get to be so big?
Someone must have made them who they are. If consumers, authors, and industry professionals alike want to dismiss the retailer as the Evil Empire, why do they spend their money with the company? Are we guilty of proclaiming that Amazon is the death of books and bookstores, even while secretly hiding under the covers with our laptops and ordering low cost books and household items with free shipping?
Through its own business practices of offering fast product delivery, above par customer service, and prices that no one else seems to be able to even reach, let alone beat, Amazon grew into the entity that it is now. But we’re the customers who put them up on that pedestal.
Amazon, the world’s largest online retail bookseller, has long enjoyed the status as the company that everyone loves to hate. Its nickname among some in the publishing industry as the “Evil Empire” might even seem well-earned considering its exponential growth over a short period of time and its ability to dominate in a wide variety of publishing and consumer service industries. Of course, the news almost every month that the corporate giant is expanding into a whole new field–expansion into online art galleries and print newspapers during these few summer months alone–must have industry watchers more than a little frightened. Everything Amazon touches seems to turn to gold, at least on the surface.
But there is one nagging question. If everyone hates Amazon so much, how did they get so big?
If there is a general sneer for the retailer and its business practices, are the consumers hypocrites? Are people actually blasting the online retail king in strongly worded and venomous blog posts, articles, and–like the recent threatening rant from the CEO of the American Booksellers Association–open letters, then staying up late at night to place their orders under the cloak of darkness in order to get free shipping on orders over $25?
Certainly, the concern that Amazon was going to be the death of brick-and-mortar bookstores was valid. Who was going to patronize the indie bookstore when Amazon could offer practically every book ever printed, and do it with overnight shipping? But while it’s very noble to envision customers making a conscious choice to support their local indie bookstore over a corporate overlord–one that has a program in place to hire work-at-home disabled American soldiers and their spouses, incidentally–not all of us have that option. I, for one, live in an area whose nearest bookstore is in the next town, a bookstore that is…yes…another major chain retailer, one who refuses to stock self-published titles.
Of course, that self-publishing access is truly what’s behind so much of the anger lobbed at Amazon. By stripping a centuries old publishing industry of its ability to control everything from the price of books to what titles make their way in front of readers, Amazon made some powerful enemies, even to the point that federal laws were broken to try to bring down the Evil Empire. Amazon was even criticized for its traditional publishing arm, notably for changing the model under which it paid its authors, abandoning the time-honored and tired quarterly payment system in favor of paying its authors their royalties once a month, just like it pays its self-published authors.
Where critics may actually have some merit is in Amazon’s tax woes. For its part, Amazon has faced issues with sales tax collection to the point that many states began calling their litigation attempts the Amazon Tax. Why not the Overstock.com Tax? Why not the Tiger Direct Tax? And while it admittedly might be lip service on the part of their public relations teams, Amazon has stated repeatedly that it will comply with sales tax regulations when Congress passes a nation-wide tax bill for online retailers. Like it or not, Amazon has operated within the tax law as it currently stands, and yes, the retailer cancelled affiliate status in states that used those affiliates to claim a physical presence in the state. Amazon has said it and it bears repeating: it cannot be expected to adopt fifty different sales tax codes, and it will comply when the government creates a uniform regulation for the entire country.
Of course, that doesn’t answer why Amazon has somehow skirted the tax law in Europe, a fact that indie retailers are seething about. While those allegations may also have merit, the governments have apparently agreed to look the other way. Just like they did for Google, Apple, and other foreign entities.
So is Amazon really the bad guy for not being better than other corporations? If they are operating the same way as the other major retailers that American consumers enjoying patronizing, why are they so bad? Are they somehow obligated to be more noble than their industry counterparts?
It would be interesting to know if any of the many vocal critics of the online retailer have Amazon accounts and therefore contributed to birth of an empire.
Since Barnes & Noble announced that the company is sinking faster than a swimmer with cement shoes, there have been a myriad of articles written on what Mr. Riggio and his golfing buddies should do to right the ship. It’s an important question, but possibly the wrong one. Instead of focusing all of our attention on the retail train wreck, we should be working to ensure a long, prosperous future for those most impacted by Barnes & Noble’s demise – those who create the books. Instead, we should be asking ourselves, “What should publishers do to survive and take control of their own futures?”
In a twisted, drug-induced type of way, the Barnes & Noble debacle could be good news for the publishing world. Necessity is the mother of innovation and adaptation. Over the last few years, many publishers have passively hung their proverbial hats on the progress of B&N and Apple. But the one-two punch of declining sales numbers and the DOJ have hampered these two companies, respectively. Sure, Apple will continue to plod away and grow, but will they grow faster than B&N falls? And does Apple care enough about books to make great strides?
Ironically, the one thing the DOJ says it doesn’t want to happen – one company having monopolistic control over the industry – is beginning to happen. Amazon is in the driver’s seat. And the passenger’s seat. And it’s also taking up most of the back seat and trunk. But it doesn’t have to be this way. Publishers have one unquestionably strong bargaining chip – and that is, content. And they can use it to get back in the game if they make the following moves:
Go on the Offensive – Too many publishers have been playing defense, if you can even call it that. They have watched the industry change. Now they must make the industry change.
Amazon has roughly 70% retail market share of digital books in the U.S. But in the technology space, they are slow to innovate and books aren’t their core business. Just like time is not a friend to the publishers, speed is not a friend to Amazon. It’s hard to steer a ship that is selling televisions, cars, the latest game console, and oh yeah, books. But to date, we’ve given them all the time they’ve needed and more.
Publishers need to act, not react, in the digital space. Take a nod from the startup community. Not every decision will be the right one, but if a decision is made, it can be quickly implemented, tested and measured to determine if it needs to be tweaked. We need agile publishers, and in all fairness to the industry, there are more and more being created every day. An agile publisher would have realized when Goodreads was only a million users that the wave was coming their way . . . and could have built or bought the surfboard to ride it.
But publishers don’t need to create all new things to be on offense. They can also . . .
Set the Standard – Like a unicorn or a troll, nobody has actually seen a major publishing contract with Amazon. But apparently they exist. Every time someone wants to try a new idea, marketing strategy or promotion, the sales prevention team – otherwise known as “legal” – steps in and says, “We can’t do it”. If we did, we’d have to offer it to all our retailers, including Amazon.” Then the conversation stops.
But there’s an easy solution to this – abide by the contract. Offer it to Amazon. Just set the terms with which all retailers have to play. Want to bundle the digital version with the physical sale? Fine, but the publisher requires email addresses of all digital downloads. Want to sell ebooks in bulk to corporations and institutions? Okay, but all corporate accounts require a white-labeled redemption page and reporting. Want to create special promotions and flash sales for a day? Great, but data sharing is required for joint transparency.
If the publishers don’t set the standard for how to conduct business with their content, they will be manipulated by whatever outlets possess the most power. This isn’t healthy for the publisher or the author. There are dozens of areas in the digital space that have yet to be defined. Set the standard now on how content can be utilized. If Amazon doesn’t like it, then other companies will step up and fill the void.
Play to Your Strengths – You can’t be all things to all people. The power of digital is that a publisher or author can carve out a very specific niche – tall Norwegians who like fuzzy bunny slippers, Winnebago owners with bumper stickers, Windows Surface owners who drive Volvos (ok, I’ll admit that last one is a bit of a stretch). Whether these are referred to as content communities, tribes or sales verticals, it is important to clearly define what you will do. And just as important, what you won’t do.
It’s doubtful that any of this is earth-shaking wisdom for publishers. But hopefully it’s a gentle reminder to keep it simple. Move fast. And view your content and experience from a user’s perspective. No single sales outlet or distribution channel should determine the fate of a company. The best way to figure out what the future holds is to proactively be part of the defining process.
Microsoft is trying to push hardware manufacturers to either adopt Windows 8 or the RT operating system on their tablets. The Redmond based company is facing an uphill battle where it is unable to compete against Android in the battle of tablet operating systems.
Earlier in the year, Microsoft surprised all of its vendors and hardware partners by announcing that it would compete against them by releasing the Surface RT and then the Surface Pro. Most companies actually heard it from the media first and ill-will started to form against Microsoft. Most people had assumed that Microsoft was too big to fail and that it would throw enough money at a huge marketing campaign to sell enough units. Obviously, this did not solve any problems and recently Microsoft took a $900 million dollar loss on the entire Surface fiasco. Word has it Surface sales were quite abysmal, selling 1.5 million units total.
One of the big barriers preventing companies competing against Android with Windows would be price. It costs over $90.00 for an RT license and Windows warrants very specific ARM, RAM, battery, and overall hardware requirements to run all of the apps flawlessly. Once you account for the operating system and all of the bloatware, there is normally only 8 GB of memory for the user to play with, which doesn’t do very much in today’s world.
The very fact that Microsoft makes OEM developers pay the extra $90 to license Windows RT is a recipe for failure. Normally, you can buy entry level Android tablets for the price of a Windows license. This puts your average Windows tablet over the $300.00 price point and many people are instead gravitating towards the Kindle Fire, Nook HD, or Nexus 7 at half the price.
The lack of sales has prompted many companies from not even entering the market with Windows 8. Lenovo has not officially announced anything, but it has discontinued the YOGI tablet and the recently released Acer W3 has already been discontinued, two weeks after launch.
Ecosystem is everything and no one is paying for Windows 8 apps. The Microsoft Windows 8 app store is rife with cheap knockoffs and clones. In the rare case you have a great first party app like Zinio or Nook, Microsoft actually had to pay them to develop an app for them. B&N was paid close to $300 million dollars to make an app for Windows 8 and Windows Phone 8, Zinio was paid an undisclosed sum to make an app for both platforms, by way of Microsoft and Nokia.
Since no one is paying for apps, most are free and are being supported by in-app advertising. Most advertising is done via Bing Ads and Microsoft themselves were buying ad slots in order to generate revenue for developers. This continued until March 31, 2013 and advertising revenue has gone from barely tolerable to essentially zero.
If you make an app for Windows 8 at this point and you depend on ad revenue, you will not make money. This has zero chance of changing unless Microsoft literally starts buying their own ad slots, and that is simply unsustainable. Even then, it isn’t worth writing an app for, if Microsoft changes their mind, you are dead. Would you base your business model on Microsoft’s whims? Would you invest in a company that did? Zune anyone?
In order for Windows 8 and RT to have any semblance of a chance against Android in the global marketplace a few things need to be done. The company needs to essentially give OEM licenses away for free to reduce costs and allow the tablets to compete against Android on price alone. Microsoft must also vow to not compete against its own OEM’s and discontinue making tablets on their own. Finally, they need to revise the way in-app advertising works and allow buyers to target tablets exclusively, instead of generically advertiser on Bing and Yahoo, in addition to mobile devices.
Some of the largest national newspaper publishers in North America have shifted their strategies to sell access for readers to view their online content. They appear to have reached a tipping point for the average city newspaper to tap into a new revenue model, and most are completely floundering. In order to boost sagging print revenues, alternatives to the paywall method need to be considered.
Credit has to be given to the New York Times for establishing the paywall method of news consumption. The newspaper originated the idea on a broad scale, offering a specific number of page views per month for free, then charging for additional content. It now has a dedicated subscription base of 640,000 readers and is generating double-digit growth every quarter in revenue. Several other national papers have followed suit, such as the Daily Telegraph in the UK and The Washington Post.
National newspapers have an easier time with transitioning their digital business to the paywall structure. They all have a very active subscription base that is not centralized. Companies like these do fairly well, but smaller newspapers suffer as they are faced with the conundrum of how exactly to generate enough revenue to offset the dramatic loss of print advertising.
Since 2007, advertising revenue has decreased by around 40% in the UK and United States. Companies that used to be the backbone of generating national and local advertisements have switched to using Google and advertising exchanges. According to some sources, online spending on web and video ads should reach $35.5 billion dollars by the end of the year. Advertising exchanges tend to be the most popular way publishers can inexpensively reach their online audiences. They are essentially electronic platforms that allow buyers to bid on and purchase advertising space at drastically reduced prices. Many websites—not just digital newspapers—rely on these exchanges to sell unclaimed advertising spots, known in industry parlance as excess inventory.
This digital advertising is training ad buyers to expect lower advertising prices, instead of the traditionally higher priced ads in a print newspaper. “It’s like a publisher trying to sell me an Armani suit for $3,000, but I can walk around the corner and buy it from Google for 95 % less,” said Shawn Riegsecker, chief executive of Centro, an agency. “[Advertisers] are buying audience instead of context and they don’t care what sites they are on,” said Gordon McLeod, president of Krux, a company that helps websites interpret data.
In conjunction with the recent decline of readership and advertising revenue, we have seen an increase in free news services. Some of these news outlets are among the most highly trafficked websites in the world, such as The Huffington Post, The Drudge Report, Business Insider, Buzzfeed, and Politico. The larger portals, such as Yahoo News and Google News, were built on the idea of producing full service news products with significantly fewer resources and at significantly less cost than traditional news organizations, largely by recycling free digital news feeds.
Paywalls are at best a stopgap measure for the future of newspaper publishers who are trying to find a viable self-sustaining business model. The average paper simply does not have compelling stories that would warrant readers paying money to read their articles. Digitally savvy consumers are getting their news faster from Zite, Flipboard, or Pulse, or even going directly to the source. At the same time, newspapers have to scale back their businesses to adjust to the new digital landscape. In order to be sustainable over the next 20 years, they will have to scale back their operations and reduce their staff sizes. Some newspapers can continue to exist, albeit as vastly smaller and less profitable businesses.
Industry experts have stated that most of their print newspapers will die in the next ten years. The only papers that will be sustainable in the long-term will be small local papers that provide local news, stories, and content that appeals to residents of a specific region. The overwhelming majority of national and regional papers will simply disappear, as they cannot match the zero-day coverage that online news provides.
Beyond the paywall, some news aggregation companies are seeking alternative solutions. There are a few that are working on a proprietary advertising platform that will offer advertisers the ability to buy ads in the local paper and also feature them online. This all-in-one solution is certainly easier to market and cultivates a direct relationship with their advertising partners. One of the drawbacks of exclusively advertising online is that the reach is larger but it is very impersonal. It will remain to be seen if something like this proves to be sustainable. Innovative advertising services are nothing new, but some larger retailers seem to be doing quite well with their own platforms by allowing companies to display ads directly on their products, such as Amazon’s entire line of “Special Offers” Kindle devices.
The New York Times is an anomaly and its success should not be emulated. Almost every major publishing company has bought into this model and seldom give out their woeful subscription numbers. The entire paywall concept is a recipe for failure and can be likened to other industry copycatting of successful business practices, as in the case of companies attempting to follow in Apple’s footsteps.
Instead of emulating, publishers should be innovating, but cash strapped newspapers cannot be bothered to devote any research and development dollars of note. It is fearful that first the bookstores and now the newspapers will fall by the wayside as the world shifts to ebooks and digital news consumption.