In an episode of The Simpsons (that takes place in the not-too-distant future) local- news anchor Kent Brockman is delivering his nightly report. It’s apparent that the TV station has a new owner; Brockman’s ‘over-the-shoulder’ image reads something like, ‘CNNCBSNBCABC.’ It’s another brilliant stroke by The Simpsons’ creators, predicting mass mergers among some of the major media brands.
If you ask Ken Doctor, news industry analyst at Outsell, a research and advisory firm focusing on the information industry, merging is just one thing newspaper companies are going to have to consider if they want to stay viable for the digital age.
Mergers, “coopetition” and more partnerships between local newspapers and broadcast networks are just a few of the potential remedies for an ailing newspaper industry. Amid eroding circulation, declining advertising, and, let’s face it, newspapers shrinking before our very eyes, one thing is clear: newspapers need to make even more radical changes to respond to the ongoing digitization of news and information.
In the latest installment of ‘From Print to Digital,’ the always-affable Doctor discusses myriad challenges facing newspapers. Hampered by legacy costs (printing and distribution) and just recently having shaken off years of complacency (a remnant of the fat and happy days when newspaper companies enjoyed 25%-30% profit margins) the industry is likely facing more shakeout.
(In 2006, the last year for which figures are available, there were 1,437 daily U.S. newspapers, down from 1,456 in 2003 and 1,480 in 2000, according to the Newspaper Association of America.)
Despite the dire straits facing the industry, newspapers are not going the way of the Edsel. Not anytime soon, anyway. But to stave off extinction, newspaper companies must do a better job at creating content that is multi-platform and “up the yield” as they monetize that content, Doctor said.
Distributing content far and wide — and in more digital applications — is just part of the good Doctor’s prescription for newspaper companies, which are now facing, at best, an uncertain future.