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Summary:

As the traditional media industry continues to struggle with the disruption caused by the web, some sceptics argue that a “digital first” approach isn’t the answer — but the reality is that focusing on digital is the only hope the industry has.

floating paper

Everywhere you look in the traditional media industry, you can see signs of turmoil and disruption: to take just a few recent examples, the New York Times is fighting with its union over cutbacks to benefits, The Guardian is looking at forced layoffs to cut costs, and the Journal Register Co. recently filed for bankruptcy for the second time. And yet, there are still some industry leaders who question whether newspapers and other outlets should be focusing on “digital first,” something that journalism professor Paul Bradshaw argues is a waste of both time and energy, at a time when the industry needs those things the most. He is right — the question isn’t whether digital should be first, it’s whether those who aren’t focusing on “digital first” will even be around to participate in the debate for much longer.

The bankruptcy filing by the Journal Register Co. seems to have sparked a lot of the recent dissent over the issue, if only because the chain of daily and weekly papers had been the poster child for digital initiatives at parent company Digital First Media — including a restructuring of management to focus on the web and innovative projects such as an open “community newsroom.” To some, the financial failure of the chain looks like a failure of the entire digital-first philosophy, despite the fact that Digital First CEO John Paton has explained the Journal-Register’s troubles are based more on legacy costs such as printing contracts and pension obligations for past employees.

A misunderstanding of what’s at stake

To take just one example, Bradshaw notes that industry magazine Editor & Publisher carried an editorial on Monday that questioned whether focusing on digital first is the right road to success, since even the Journal Register Co. couldn’t seem to make it work:

“[F]or all the hype about embracing digital platforms, the constant drum beat of new projects, and the relentless self-promotion, digital first wasn’t enough to keep JRC from sinking back into bankruptcy, leaving other publishers wondering, ‘If digital first won’t work, what will?’”

This kind of attitude shows a profound misunderstanding of where the newspaper industry is, and how it needs to move forward. Like virtually every other mainstream paper and magazine publisher — many of whom are likely fighting desperately to stave off a similar filing — the Journal Register’s biggest problem is that while its print business is still producing the lion’s share of its revenue, that figure is shrinking rapidly. And even though most executives in the industry seem to appreciate that digital has to come first, the revenue from that business isn’t picking up the slack. This is the “digital pennies for analog dimes” problem.

New York Times media writer David Carr had an enlightening and apt metaphor for this situation, which he described to me after a recent event in Toronto: there are two rooms, Carr said — the print room and the digital or web room — and newspapers know that they have to get from one to the other. But they can’t just turn the lights off in one room and move to the other, and so they are currently trapped in the long dark hallway between the two, groping around trying to find a handhold. And it isn’t clear when they bump into someone (like Twitter or Facebook) whether they are friend or foe.

Does that sound like a recipe for unqualified success? Hardly. And yet the transformation must be made, either slowly or quickly. As Bradshaw points out, there are plenty of reasons why that is the case, and we get further evidence of them every day — including Pew surveys that show news consumption is becoming increasingly mobile and multi-platform, for example, and research that shows the industry’s addiction to print is becoming more and more of a liability rather than an asset.

The future may not be obvious, but ignoring it isn’t an option

Is there a business to be had by ignoring the web completely and sticking to print? Perhaps. The Orange County Register seems to be doubling down on this strategy, locking everything up behind a paywall and actually instructing its writers to stop posting things on their blogs and focus on the print product instead. This approach has an ostrich-like feel to it at this point in the evolution of media, but the paper’s owner seems determined to focus solely on print readers. That may continue to be a business for some time to come, but it is almost certain to be a shrinking one. As Bradshaw puts it:

“No one has the answer to the question of paying for journalism, but we should at least acknowledge that the old system is broken. We cannot go back to print profit margins: readers have left, and advertisers are following.”

Meanwhile, the debate continues over whether advertising-driven digital media is destined to be a low-quality, volume-driven game — an argument that Dean Starkman of the Columbia Journalism Review revived in a recent column — and whether newspapers should focus on building subscription-based businesses instead, as the New York Times and the Financial Times are both doing. My sense is that only a few global brands (and possibly some hyper-local ones) will be able to get away with a fully subscription-powered approach, but the reality is that we simply don’t know where success lies.

What we do know (or at least should by now) is that it is long past time to stop debating whether the media industry needs to be “digital first.” As David Pakman of the venture capital firm Venrock Partners noted in a series of recent posts, different forms of content have different attributes, and the reality is that news or “informational” content has become a commodity, and is difficult to monetize. In a nutshell, that is what is fuelling the disruption that newspapers are experiencing — and while there may be many different models for how to deal with that, ignoring it is not really an option.

Post and thumbnail images courtesy of Flickr users Zarko Drincic

  1. Excellent overview of these issues. I agree that digital first really is the only option for growth.
    The big frustration remains how long this transition is taking. Realistically, the crossover point where digital revenue surpasses print losses is still quite a bit down the road for many newspapers. And that’s after years of decline in the print business.

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    1. That’s a good point, Randy — in some ways it would be easier (although probably more painful) if the transition were to happen faster.

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  2. Automobiles first, horse-drawn carriages last isn’t an option in 1900 – it’s the only way forward.

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  3. Dennis D. McDonald Tuesday, October 9, 2012

    I wonder if it would be useful to also be discussing “digital what” — are we talking distribution, creation, editing, or everything in the chain between source and reader?

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  4. The other big problem is that anybody trying to enter the same space and competing for the same advertising dollars isn’t talking about “digital first”, they are “digital only”, and don’t have all of that legacy cost base to worry about.

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    1. Totally true, Martin — and that is a big disadvantage to traditional players in an increasingly competitive market. Thanks for the comment.

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  5. Seems that the debate lies not in whether digital first is the way forward, but rather if it should be tied to the print product and available for a nominal cost. The later seems both reasonable and sustainable. Look at the success of the Minneapolis Star Tribune which has taken a measured approach and seen circulation gains.

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  6. I think the other major part of this is how “Digital First” changes for each format. If only it was as easy as finding some over-arching solution for all media.

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  7. Digital Journalism Tuesday, October 9, 2012

    As a journalism instructor, what I care is how journalism education embraces the “digital first” concept. It seems that educators are slow to respond. I surveyed more than 500 journalism and communication programs in U.S., and my observation is that only a small number of the programs fully integrate digital journalism into their curricula.

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    1. Completely agree.

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      1. Chris O'Brien Tuesday, October 9, 2012

        Though I will say, the NY Times is an exception here, investing and expanding in new areas. We’re all watching Digital First Media to see how this “Project Thunderdome” plays out; they are spending a lot of money somewhere on ramping up new things. We’re still waiting for those to trickle out to the papers to see what impact it will have. The question for me: Can they move fast enough? (And get the rest of us moving faster as well?)

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  8. Legacy newspaper brands are still the primary news authorities retweeted and linked to on social media. They’re still driving the conversation. It’s the only reason why someone like John Paton hasn’t completely walked away from them and created his own company (altho some believe that’s what he wants to do with Thunderdome). The digital vs. print, Us vs. Them mentality is stunting much-needed innovation. And while the digital folks complain often and loudly that the transition problems are all being caused by legacy print personnel, both sides are equally to blame for fostering this petty entrenchment. Every idea isn’t great just because it’s digital and every opposition to a digital idea isn’t wrong just because it came from the legacy print side.
    Combine that with the entry of scavenging investment funds into the board room interested only in short-term ROI and you have a very poisonous, unproductive environment.
    It’s hard enough to turn one newspaper around, but trying to make baseline industry change on the scale of Gannett or MediaNews Group in an exaggerated time frame has been a disaster. We can expect more bankruptcies and quite possibly the dismantling of some mega publishing groups before we make real progress. I also believe that until the investment funds get out of newspapers and the business people with community ties get back in, we’ll stay on a downward trajectory. We may have gotten into this mess because legacy owners thought their “freedom of the press” mantle meant they could ignore basic business realities, but that doesn’t mean news is just another business. It’s a civic responsibility and it’s time both sides take that to heart and find a way to work together toward a common goal. Otherwise, we’re going to end up with Gawker and TMZ as our primary news authorities.

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    1. Angela Phillips Friday, October 12, 2012

      How right you are Jassa. I teach journalism. We have been digital first for years.I also research journalism and I have found that older journalists have been very fast in embracing the web – the ‘divide’ doesn’t exist. It is the business model that lags behind. Managements have failed journalists and its no good berating pensioners for the fact that they continue to live and breathe and their cost is dragging down the legacy media. Creative thinking is certainly required but getting journalists to flog products is not the way forward – that way lies the end of real journalism. We have to protect public interest journalism whatever method we use to disseminate. That is the bottom line.

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  9. Chris O'Brien Tuesday, October 9, 2012

    Despite the CJR piece, I don’t really thing that many journalists would disagree with the notion that we need to be digital first. And I don’t think it’s fair to draw conclusions about DFM from what’s happened at JRC–yet. But I don’t think this can be all about cuts. I think in transforming companies, of any industry, you can’t cut your way back to growth and sustainability. That, I think, is the frustration at old media companies. We see lots of cuts and not enough investment in new stuff. As an aside, when you mention companies like Facebook or Twitter, they recruit and inspire the best by outbidding them. And yet, journalists are told they should just be happy to have jobs and accept lower pay and benefits. It’s not a great recipe for inspiring people to be innovative and to put their creative energy into re-inventing an new org (or any type of business).

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    1. That’s a really good point, Chris — I agree there is too much focus on cutting costs and not enough on growing the business and innovating.

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      1. Chris O'Brien Tuesday, October 9, 2012

        Though I will say, the NY Times is an exception here, investing and expanding in new areas. We’re all watching Digital First Media to see how this “Project Thunderdome” plays out; they are spending a lot of money somewhere on ramping up new things. We’re still waiting for those to trickle out to the papers to see what impact it will have. The question for me: Can they move fast enough? (And get the rest of us moving faster as well?)

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  10. David K. McClurkin Tuesday, October 9, 2012

    Journalism professor Paul Bradshaw’s remark that “readers have left, and advertisers are following,” with respect to print as a primary product, rings true. The world is more populated with digital natives now than with digital immigrants like me, and the shift away from print is moving with accelerating speed. Isn’t the real challenge to maintain fundamental excellence in journalistic value while being mounted on this digital horse? Balance between print and digital will always require attention and adjustment. Those who recognize this reality will survive. Those who are instead set in their old ways will not.

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    1. Agreed, David — thanks for the comment.

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  11. Eamonn Colman Tuesday, October 9, 2012

    Do you know someone rang me the other day to sell space in print advertising.
    He sounded like poor ol’ Willy Loman.

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  12. D.Eadward Tree Tuesday, October 9, 2012

    Which traditional publishers have been most successful in pursuing a digital-first strategy? In my industry (magazines), some names that come up are The Atlantic Monthly, Consumer Reports, U.S. News and World Report, maybe Forbes. What about newspapers? It would be easier for us to make our way down the dark hallway from print to digital if we had someone to follow.

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  13. Quite interesting to see that many agree on the ‘digital first’ strategy whilst at the same time have to acknowledge that most don’t have a clue on how to achieve this. Almost sounds like let’s get into the car and start driving. We don’t know where to but at least we are driving.

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  14. VALVE SOLUTIONS Wednesday, October 10, 2012

    This is an excellent article on the only way ahead is digital. As a B2B marketer in the industrial segment, we @VALVESOLUTIONS are finding it hard to get SME’s to take the digital way. However large corporates have realised the potential and have made their presence on the digital platform. But are these companies leveraging the great potential of digital media for content marketing and lead generation ? Well only IT and Tech B2B companies are filling their pipelines with enquiries for sure. The rest are slow to change and are still giving more emphasis to the old tried and tested methods of print media advertising. I guess it will only be a matter of time before a serious shift to the digital platform will be the only option.

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  15. Richard Willner Wednesday, October 10, 2012

    The sad thing I see is that, because of smaller news teams, more demands and the need to fill print spaces, more articles are put together in shorter time and with less attention to the reader. I find it frustrating when stories are written simply to fill a space in a print product. It’s not good for the reader or the writer. Until editors, in particular, step back for a moment and think about the value of their offerings to readers, and therefore advertisers, I can see only one way – and that’s down. I believe newsrooms to get back into the habit of doing the big stories, the big issues affecting their readers etc as well as they possibly can…and that means digital and print. Why can’t a major issue for a community be spread over 5, 6, 7, 8 pages…it’s going to be of much greater value than the fact a local magistrate is retiring, for example.

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  16. Adopting a digital-first strategy will pretty much kill your core business. It’s certainly a strategy, but I don’t think it’s a wise one if you want to maintain a legacy newspaper business. I don’t think you’ll see Warren Buffett embracing digital first for the newspapers that he’s buying. The Internet is a sustaining technology to newspapers, which means digital second. It’s also a disruptive one, but adopting a digital-first strategy will, like I said, kill the core product pretty quickly. Inasmuch as the typical mid-size newspaper generates about $50 million in revenue and $6-7 million in EBITDA, I don’t think that’s a business you’d want to kill.

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  17. You guys keep going digital first and keep declaring bankruptcy every few months. We will continue to allot resources according to the revenue we receive and make the move with some common sense at a pace that utilizes print and digital. Why would you abandon a major source of revenue because it used to be bigger? As it changes, we will change–not before.

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  18. Digital or classic, news industry is forced to constantly lower standards and quality. Because of the shrinking profit margin they are not able to maintaing high quality journalism we are used to.

    Outcome is abit unclear, I think future will bring news cacofony where hardest part will be to filter out quality and reliable news from news spam. Personal news distiller is probably one of the future professions.

    There are two possible solutions to this situation. News industry will have to establish hi-quality search possibilities so that anyone will find just what he/she needs. And secondly, we will need some kind of joint evaluation of credibility of a news source.

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  19. Otherwise nice discussion ruined by that stupid meme of “time spent on ‘x’ media must equal ad spend allocation on same etc etc”…

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  20. To bridge the gap with the digital/print divide is likely data – UT San Diego has chosen to develop a data driven culture beginning with content performance by understanding with metrics how their articles are resonating with readers using web/digital/social metrics. They are doing this without for-going their digital advancements in content or revenue – also data driven – or the consumption points of readers – marketing metrics are consider here as well. Gannett has an incredible understanding of reader consumption points – mobile, TV, web then print. Digital First continues to innovate to prepare not just for their future but for their now with AdTaxi and content productivity with Thunderdome. Using data to understand the news business better from all business rendering perspectives from quality content, audience consumption points and positive efforts driving the future of revenue development which certainly at this point includes digital as it makes sense, or cents as they add to dollars. Do it all or as much as you can afford. Better content and digital innovation to understand what news consumers want with non-political, fact driven data.

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  21. The solution is bundling the solutions on the advertsing side of the equation. Look at the model rolled out by Dex Media. Everytime someone buys a print ad they are bundled with search or impressions. The result is that you no0 longer need to convince the customer whether print or online is the way to go. Through google analytics and print tracking phone lines it is very easy to establish an ROI for the client. This approach keeps the content robust in both mediums. You will not eliminate the eventual demise of the print product, however, you can slow the process and provide a great user experience for digital and print readers and an increased profit for the advertisers. Additionally, when you bundle the solutions they are easier to sell because you are capturing a larger audience thus spending advertisers dollars in a more effective way.

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    1. A good start Patrick since bundling has been used for years depending on your market and this might only partially fill a marketers purchase funnel depending on the solutions offered. This works for a while but is actually tough on post sale ROMI, attribution and optimization unless you have campaign management software that will include all ad campaigns – offline, online., yours and other advertisers – in a single reporting location beyond click path.

      Newspapers need much more than bundling to compete in 2013 to advance and optimize in the same way digitally as pure-plays do and can – still need data driven metrics beyond click path. Call tracking is good but may partially cover multi-touchpoint campaigns and GA for local and large advertisers rarely is used to capacity so there’s always need for education or expertise. Plus GA support is rarely a service offered by media companies in general and again will rely on click path, last click and only partially helpful with attribution.

      But it is a good start.

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  22. We’re obsessing about platform. It’s at best a sign post along this dark hall way. If platform thinking helps news media find its way, great!

    However, I’d argue that the problem is actually a loss of consumer focus. Let’s first consider the expectations our audience, then the stories, style and approach we must take to engage and then the platform or platforms best suited to consumer behaviours and how these are enabled by digital and traditional means.

    There’s a conga line of boring news producers who churn out a relentless stream of content driven by a top down agenda presented in a ‘tried and true’ format generally considered within news media as ‘quality journalism’.

    The real news is that people don’t want it! It is dull and disempowering. Stories have to connect the issues to the personal interests and motivations of the consumers we seek to engage.

    Why not lead with the consumer, choose the right stories and then lead with an approach to communication, which addresses their needs?

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  23. The future isn’t obvious, but as marketing managers become ever-more savvy and look to promote themselves through integrated marketing campaigns, so must media companies (newspapers included) offer joined up media solution for their clients – print, digital (multiple formats), F2F etc

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  24. Why does there have to be an “either or”. Isn’t it best to offer readers and advertisers good quality in both print and online? Most daily papers have more people reading their paper each day then they have uniques on their website (remember, monthly uniques are cumulative, divide that number by 30 days and then compare with daily circulation). Obviously their are plenty of readers who still want print while there are other readers who prefer digital. Newspapers are in the prime position to offer a media mix for advertisers to reach both print and online readers. It is not either/orr, it is how to do both with quality in order to reach the most readers out there.

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  25. Angela Phillips nails it by saying journalists shouldn’t be flogging products.
    But seriously, isn’t this exactly what journalists do every time they attend a press conference, report on (rewrite?) a media release or respond to an interview invitation?
    No wonder “news is a commodity”! No wonder media consumers don’t want to pay for that.
    Whether digital or traditional, we cannot discuss the medium without taking a long hard look at the content.
    As with any commoditized product, we must create points of differentiation.
    In this day and age of PR-driven news agendas, doing what journalists should be doing – breaking real news – might be one such approach. And refer the product-pushing PR firms to the advertising sales department.

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  26. I think the thesis wrong.

    In a newspaper and magazine world, info was distributed around dates.

    In a social world, info is now distributed around people. Dates are secondary.

    The content management systems of traditional can’t support social natively. They outsource it to Twitter, Facebook, etc.

    Twitter, Facebook, etc. don’t let them monetize natively–nor do they give them access to social data.

    So as content discovery has completely changed, the content creators are getting left out of the equation.

    Either traditional needs to build their own social CMS’s or Twitter, Facebook, etc. needs to give them access to social data and social identities so they can sell against. Current APIs aren’t enough for traditional to survive.

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  27. Steven C Threndyle Sunday, October 14, 2012

    Lots of great points, here. However, you also have to put yourself in the role of the marketer trying to reach an audience. What kind of platform will engage with your brand to fill the sales funnel? Here’s an example: in Vancouver (where I live) – condo marketers love print because the splashy ads are hard to ignore, especially if you’re flipping the pages of the weekend newspaper. The most successful publication remains “New Home Guide” – which is basically gussied up advertorial that again, is printed on decent paper and makes the homes look good. Now ask yourself – does banner advertising, pop-ups, mobile, or inbound SEO offer that number of potential eyeballs? (They advertise on radio a fair bit, too – calling out price point/high value ads which are narrowly targeted to certain neighbourhoods.) Yes, there are developers on Facebook, GoogleAds etc – but it appears to me – in fact I happen to know – that digital is often ‘thrown in’ as part of the tradi hard copy print buy that the agency or client is making. So, I still don’t think it’s an either/or thing.

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  28. Geoffrey Colon Monday, October 15, 2012

    Thank you Matthew for this nice piece. It’s only 10 years since the music industry began to implode from disruption as a result of P2P and digital mp3 technology and yet the case studies have yet to be followed by publishing, radio or TV in ways that they are properly preparing for their crash/transformation pending how you view it. One thing is certain, it is past the point of debating whether these industries will transform. The physical print model is slowly dying similar to the physical CD format that was the longstanding delivery mechanism in music. You are accurately pointing out the obvious that many in those industries fail to realize. Take a look now at music and even mp3 for sale ownership has transformed into rental or streaming models not even realized a decade ago. Where the news business will end up is hard to tell but by trying to battle rather than embrace change, publishers are basically setting themselves up for failure rather than success through an innovation via evolution mindset.

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  29. How much can digital first help to tell the unbiased truth, how digital was it for President Obama watch live on drones viewing the asking for help and the destruction that followed on the Embassy in which American’s died only for him to go around and make speeches that it was a video that sparked this before the truth came out, this might not have room in this conversation buy it is very digital or a bi product of digital to come, yet who will report the truth to this invasion of digital awareness that was not reported and used to manipulate others before the truth came out, would this be digital in the past tense. Do we think real time digital should be controlled or is free speech the right to digitally improvise how to edit what is happening or what could happen or better yet just let anyone of the first responders who can knowingly view in real time and than just keep it secret because they have the power to later say there was a lot more at stake by not telling the truth in the first place. Who has the right to control this and instead of saying that those will be found and punished when in the first place it should have not happened at all. First digital is the way to the future but it should be used in a way where all views are created equal and not just to report so this future could have saved lives and not just be used for the short comings of one at the top of the food chain to have the right to say I am sorry for something and making it worse through digital communication just to say I am sorry is not enough unless it really was a mistake. We say Politics has it’s place but not to digitally use it for reasons of manipulation of a for sale sign after you have raised the price of life. The balance of journalistic value from print to digital is more or has more than just after the fact value now that digital is involved in changing life in real time which will change the journalist who will write the book or digitally make that decision. The process of old ways of print to the new ways of digital is a lot more than just an option unless the only use for digital is for journalism which is no longer the case no matter what professor in any liberal or conservative college teaches digital has the speed to control more than journalism it has the power to persuade a persons views in real time what is the option to that or will that come out digitally later? What I have said is not to point any fingers though it could appear that way because hopefully there are a lot more good things that the speed of digital has worked and helped improve but have yet to be reported , to me that has more value and to make that a contagious option will be hard to do because the price or reporting seems to be worth more when one reports and distorts the truth to magnify that key word that catches your attention that sells and that structure of pay for dirt and add a little water on it makes mud , the harder it is to wash off the more it is worth to the ones that profit by negativity but they would say we are only reporting this so it does not happen to anyone else, that old saying do not ask a question unless you already know the answer because it gets very expensive for those FIVE little words that can be so big in value, so what does digital have to say to them besides WHAT WHO WHEN WHERE and WHY or is it just the option value that they all start off with the letter W ? I am sure that I have left something out like what does that have to do with me and my family and friends and I am sure it has to do with the word EVERTHING!!!!!

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