Meeting Robert Picard on his home turf in Oxford is a slightly overwhelming experience.
Leaning back comfortably in his leather armchair – and always with a friendly smile – he delivers one critical salvo after the other against the newspaper industry and its leaders: “The people running the newspapers have a mental block”, “The newspapers lack viable business models” and so on ... “Yes, I make strong criticisms, but I do so out of real affection. I’ve worked in the industry myself and I love newspapers. That’s why I get so frustrated when they refuse to adapt and are unable to see new opportunities,” he explains.
Partly their own fault
In Robert Picard’s view, the difficulties being experienced by the newspapers are only partly due to the crisis in the global economy. The underlying problem is structural, with newspaper publishers failing to adapt their products to changes in the world around them. As the amount of news and entertainment on offer in other media has proliferated, the newspaper industry has carried on along the same old track. Nowadays, consumers can find much of what they want in other media that fit in better with their needs and lifestyle.
“In this respect, the problems that newspapers have are partly of their own making. They can’t continue to make products for a world that no longer exists,” he says.
Little interest in news
Daily newspapers see themselves as news organisations, but at the same time they are acutely aware that most people are not particularly interested in news. In order to reach a broader audience – and a larger advertising market – they have filled their newspapers with other content such as sport, gardening, entertainment, motoring, food and so on. Today, less than 20 per cent of newspaper content is actual news, while specialist sections and supplements have expanded. The problem is that the strategy, which has long been extremely successful, does not work anymore. Not when football matches are broadcast live on the internet, not when TV channels offer excellent gardening programmes and not when entertainment seekers prefer to chat online about the latest films and book tickets on their iPhones.
“And yet most newspapers continue to offer the old-style content. The people running the newspapers seem to have a mental block that prevents them from changing their concept. Why, for instance, do they persist in publishing pages and pages of share prices, when the people who are really interested follow the markets in real time online?” The statistics also speak volumes.The audience for daily newspapers has gradually been eroded, along with advertising revenues. Roughly speaking, Europe has been losing readers at a rate of 1–2 per cent every year for a long time now.
Thinner but deeper newspapers
It is high time the newspaper publishers rethought their products, according to Picard. Instead of chasing after lost readers, the focus needs to be on the core consumers, the readers who really want news in newspaper form, presented with good journalism alongside in-depth analysis and comment. The target group must be given even more of this and it has to be information that is not offered free somewhere else.
Supplementing this offering with even more information and with interactivity online is the route that many newspapers will have to take. That means much more compact paper-based newspapers, with most of the specialist sections and news agency material removed or severely cut.
Willing to pay
“It’s a matter of offering a narrower, more exclusive and more tailored product. And of charging more for it,” says Professor Picard. But hold on a moment... The answer is
for fewer customers to pay more for thinner newspapers? Newspapers that will have quality content that will be expensive to produce? Yes, Professor Picard is convinced that the equation works. “Core consumers will pay for a really good product,” he asserts.
He also believes that this type of newspaper can be produced at a lower cost than is currently the case. But this requires smaller and more flexible organisations. The newspapers have to be liberated from the enormous overhead costs of the parent companies, which are the result of the rather unrestrained expansion during the golden years of the 1980s and 1990s. Instead of having their own printworks and today’s huge editorial offices, more small-scale solutions will have to be found with new partners, not
least in the field of online provision.
New business models
What the newspaper industry needs is brand new business models and of course they will have to be different in each individual case. What they cannot do is remain the same as they are now, according to Picard. In his latest book “Value Creation and Future of News Organizations” he describes how such business models can be developed. And on his blog he has said “the problem is that media company executives often don’t know what a business model is.” Talk about sticking his neck out...
“Well, I said it to generate debate and because the issue is so important. My main gripe is the way that newspaper executives almost exclusively talk about how they can be paid for their products. Instead they should be conducting a fundamental analysis of how they can create value for consumers by offering products and services that are unique and different from those of other companies. If they do that, the problem of revenue flows will sort itself out,” says Robert Picard.
Plenty of positive things happening
While standing by his criticisms, Picard points out that plenty of positive things are happening in the media world. Many publishers and media houses are now implementing the types of new strategy that he has long advocated. The main focus is on integrating newspapers, internet, TV and mobile phones, how these products can be linked to social media and how these different products can support each other. He cites the Daily Mail and the Telegraph in the UK and Norway’s VG as examples of newspapers that have come a long way in this respect. And Picard is adamant that the race is not yet over. There is still time to adjust. The paper-based newspaper is certainly a mature product that is losing market share, but the process is quite slow. Fortunately, the newspaper industry also has the required muscle. “The newspaper industry is actually one of the most successful and long-standing industries in existence. Despite the financial crisis, average profitability is around the same level today as it was in the 1970s. And who thought the situation was hopeless then?”
More revenue streams
Despite his optimism, Picard definitely sees the golden years as gone forever. However, he does not see that as a problem. Historically, newspaper publishers have always had to undertake a whole range of supplementary activities in order to keep their newspapers alive. Picard believes in a renaissance for that type of approach, with publishers already highly involved in selling music, films, books and so on.
“Looking ahead, I see a considerably more long-term and comprehensive
approach to the business. It’s unavoidable,” concludes Robert Picard.
Text: Strateg Marknadsföring Anders Thorén
Photo: Rob Judges