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Preparing for the internet revolution in China Yang Zhenwu, Deputy Director, The People's Daily, China
More than 100 million newspapers are printed in China each day, making the country the world's biggest newspaper market. It has more newspapers among the world's 100 largest papers than any other country.
But while the Chinese newspaper market is booming, the Chinese Newspaper Association is not sitting on its laurels. It is preparing for the internet challenge, and Mr Zhenwu described the directions the country's newspaper industry is taking both to protect traditional media and develop new media. These include:
- Exploring electronic development while making better use of the traditional newspaper.
- Innovating content, style and reporting skills of traditional newspapers.
- Developing interactions between newspaper and website and expanding newspaper advantages by using new technologies
- Rebuilding newspaper groups, reforming management and operations.
- Joining in global competition and strengthening exchanges and cooperation with international counterparts.
WAN classified advertising survey Martha Stone, Manager, Special Projects, Shaping the Future of the Newspaper
The annual WAN survey of classified advertising migration from print to the web has found massive growth in on-line advertising revenues -- and growth in print revenues as well.
Ms Stone said the survey of 159 newspapers from 72 companies in 45 countries found that online classified revenues grew 52 percent among the respondents, while print ad revenues grew 5.3 percent.
"The increases in online classifieds is incredible," says Ms Stone. "We are seeing internet classifieds growing in all 72 companies surveyed. However, their growth rate is below the booming online advertising rate overall.
Recruitment classifieds are the advertisements that tend to migrate first to print to the web. But as migration accelerates, the biggest impact seems to be on automotive and other categories including travel, says Ms Stone.
The full survey is included in "Digital Classifieds Survey", one of six new strategy reports from the Shaping the Future of the Newspaper project. For more on the project, consult www.futureofthenewspaper.com.
Banding together to defend classified advertisements Daniel Jauernig, President and CEO, Classified Ventures, United States
The migration of classified advertisements from print to web is accelerating, so the experiences of Classified Ventures in the United States -- which has been strong nationwide since 1997 -- is worth noting.
The company is a strategic joint venture owned and funded by six of the largest media companies in the United States -- Gannett, Tribune Company, Belo, Knight Ridder, the Washington Post, and McClatchy -- which came together to exploit the on-line classified market for cars, rentals and real estate.
Mr Jauernig examined the reasons for starting the joint venture, which creates strongly branded, nation-wide classified web sites for its 170 affiliate newspapers, its successes and the challenges it faces from online competitors and new technologies.
"We believe that having national websites with strong national brands gives each of our 170 newspaper affiliates a competitive advantage in selling these critical online products in their local markets," Mr Jauernig said.
The company will generate 350 million US dollars in revenues this year with a pre-tax margin of 20 percent.
Major challenges, however, are appearing from free classified sites such as Craigslist, aggregators such as Google Base, platform delivery shifts from PC to mobile, and RSS and XML feeds. Classified Ventures was responding to the challenge from Craigslist by distinguishing its products and services. Aggregators like Google Base -- which is not charging anyone to display classified listings on its site -- is not yet a threat, but the potential is there. .
Bigger is better Paul Zwillenberg, Global Head of Media and Entertainment, OCBC Strategy Consultants, United Kingdom
Scale is everything in online classified advertising, says Mr Zwillenberg, who provided lessons from the "pure play" online companies that are challenging newspapers for their classified ad markets.
Mr Zwillenberg described on-line scenarios in which the number one market position quickly leads to dominance -- more visitors, higher response and -- eventually -- the ability to charge higher prices.
Using several case studies, including e-Bay's automotive site, Mr Zwillenberg described the strategies of the pure-play internet companies. But he also provided points for newspapers working with online classifieds:
- make the most of your assets -- content, promotional power, customers.
- embrace new revenue models to drive advertising spending such as pay-for-performance models.
- use the same brand across print and online.
- use multimedia.
- go for scale -- quickly.
From Seoul to Moscow -- an update on new newspaper concepts Michael Grabner, Deputy Chairman, Von Holtzbrinck, Germany
One year after introducing Holtzbrinck's aggressive product strategy at the World Newspaper Congress in Seoul, Mr Grabner has not changed his opinion about the need for multiple niche products.
"It is not possible to have a target group for 14- to 75-year olds," he said, echoing his remarks in Seoul.
Mr Grabner provided an update on the successes and failures of the strategy. Some products have been abandoned or altered, but far more have been expanded into new markets.
Von Holtzbrinck strategy is regionally and locally oriented, aimed at target audiences like young readers. A product is tested in a small market and then rolled out to other regions and localities if successful.
The company believes in developing products according to audience demand, which means developing research methods to determine that demand; making products for target groups, not for everyone; and creating new products quickly and testing them in the market.
A year beyond the introduction in Seoul, here's a two of the things Mr Grabner has learned:
- developing and adequately funding research & development is key.
- learn to use core competencies to enter new markets that require low investment and offer promising growth.
Audience Aggregation for Extending Your Audience Karen Crotchfelt, Vice President/Market & Business Development, The Arizona Republic, USA
Friends and family tell Ms Crotchfelt to find a new job because they are worried about the future of the newspaper industry. But Ms Crotchfelt isn't worried.
"I believe we can lead the media into the future. I believe we can set the pace for innovation and change. And I believe that we can, better than anyone else, give information seekers what they want while at the same time delivering audience to our advertising customers that help them grow their businesses," she says.
Ms Crotchfelt described The Arizona Republic's audience aggregation strategy in which it is aggressively creating multiple products across multiple media, focused on specific target audiences.
The Arizona Republic company's aggregation strategy has led to a wide variety of products -- the daily paper, preprinted inserts, direct mail, Spanish-language, free distribution magazines for real estate, rentals and recruitment, custom products for clients, events, the state's leading website and nine magazines and community newspapers.
"From a sales perspective we must re-invent the way we go to market to capture new revenues," she says. "We must evolve to an audience-based selling strategy where we speak to our customers about the audience we deliver to help them get results."
Free papers won't kill newspapers Pelle Tornberg, President & CEO, Metro International
Radio did not kill records, television did not kill movies, and free newspapers will not kill the newspaper industry, says Mr Tornberg, whose Swedish Metro launched a world-wide phenomenon.
That hasn't stopped some paid-for newspapers from trying to kill Metro, he says, adding that they won't succeed.
He says many free newspapers that were launched by paid-for newspapers in response to Metro have not fared well -- they have cost twice as much to develop as Metro and are unprofitable.
The reason they struggle, he says, is, "there is a big difference between doing something with enthusiasm, and doing it defensively. Many of you tried to kill us, but that's a money losing approach."
A better strategy, he says, is in partnership, as a number of paid-for newspapers have done.
And it isn't going away. "It is a growing industry that is here to stay," he says.
Ten Trends in Newspapers A panel discussion with the Shaping the Future of the Newspaper strategic business partners
The strategic business partners in the WAN Shaping the Future of the Newspaper project represent the printing, paper, telecommunications and advertising industries. So their participation in a panel discussion on trends in newspapers, with the president of the World Association of Newspapers, revolved around the daily concerns of newspapers everywhere.
"Some talk about a crisis and lack of confidence in our industry because of all things digital, but as we've by the presentations here, any crisis of confidence is certainly unfounded," said Gavin O'Reilly, the president of WAN. "We should never lost sight of what built this businesses, which is the printed product, and this is where we make most of our profits.
"Everyone wants to talk about digital, and I understand that, but let's not lose sight of our core product," he said.
The trends they discussed are those of concern to SFN, which identifies, analyses and publicises all important breakthroughs and opportunities that can benefit newspapers all over the world. These include: new formats, product innovations, free papers, online newspapers, online competitor advertising migration, mobile, new marketing, broadcast fragmentation and broadband penetration, and search engines and copyright.
The participants included Gerd Finkbeiner, Chairman of the Board, MAN Roland, Hans-Peter Rohner, CEO of PubliGroupe, Harmut Wuster, President of the Newsprint Division of UPM-Kymmene, Stig Eide Sivertsen, Vice President of Telenor ASA and Chief Executive Officer of Telenor Broadcast.
More on the SFN project at www.futureofthenewspaper.com.
A free paper saves the day Martin Kall, Chairman of the Management Board and Head of the Newspapers Division, Tamedia, Switzerland
Investment banks get a lot of attention today for their poor valuation of newspaper companies. Nothing shows their fallibility better than their over-valuation of Tamedia prior to its Initial Public Offering in 2007.
Tamedia was booming and was riding the wave of the internet, investing in new media at the expense of its newspapers (which includes the Tages Anzeiger). Optimistic forecasters at UBS, supporting an IPO, extrapolated current earnings into the future -- a bad mistake from the internet bubble of 2007.
When the bubble burst, so did Tamedia. "The forecast of UBS was totally wrong. While we had been a darling when we went public, we became something of a dog."
But despite the fall, Tamedia was fortunate -- it was left with its profitable newspapers, and a new market was developing for free newspapers.
Tamedia ended up buying the Swiss edition of 20 Minutes from Schibsted, and turned it into a remarkable free paper -- 160 full-time staff, seven editions, and German and French editions. It has become the most widely read newspaper in Switzerland, growing from 200,000 copies at launch to 1.39 million copies.
Mr Kall said 20 Minutes has had no impact on the readership of paid-for dailies, though it has impacted advertising. Nevertheless, "in general it has been a good investment for us. It's been a terrific asset."
Fighting a tabloid with quality Piotr Niemczycki, Vice-President of the Management Board, Agora, Poland
The Gazeta Wyborcza newspaper was born out of the Solidarity movement and became the symbol and market leader of the new Poland.
But Poland's market success drew competitors from outside the country -- the most notable example being Axel-Springer's Fakt, a colorful tabloid that resembles its sister publication Bild that was launched in 2008. And, like Bild in Germany, Fakt has become the biggest selling newspaper in Poland.
"So how do we survive if readers are satisfied with a newspaper like this?" said Mr Niemczycki of Fakt's rapid success.
Gazeta decided to fight back with its own "principles, recipes and ideas," he said. They include the folllowing
- We stick to our values.
- We write about important Polish and international events.`
- We are passionate.
- We will never make our newspaper stupid. We will not print sensationalism. We are a serious forum for thought.
The results? Sales have increased in 2008 and 2008 and Gazeta remains slightly behind Fakt in the market.
"We are trying to be an agent of change," says Mr Niemczycki. "Gazeta's special feature is civil journalism."
The world's biggest newspaper Sanja Gupta, Editor & CEO, Dainik Jagran, India
India's Dainik Jagran has built its reputation on its relationship with its readers -- all 19.1 million of them.
As the newspaper with the world's largest readership, the Hindi-language Jagran faces formidable logistical problems:
- It has a network of 29 editions, 204 sub-editions daily, spread across 10 states and more than 250 districts.
- The dialect of conversation in India changes almost every 25 kilometers, so the editorial team must adapt each of the sub-editions to reflect the colloquial taste of every distinct market.
There is no doubt that the Indian media market is complex. But Mr Gupta says the secret to the Jagran's success is to keep things simple.
"The building blocks of success were very clearly built on the basic premise of doing the simple things well," he says. "The vision was very clear to create a newspaper to reflect the free voice of the people, and our guiding philosophy in action was a build a relationship with readers. All our initiatives have stemmed from building a relationship with our readers. All of our future initiatives will also be built around this guiding philosophy."
Despite its size, Jagran still has room to grow -- its reader base is estimated at 48 million readers.
How the newspaper intends to continue its growth was the subject of Mr Gupta's presentation.
Trends in Newsprint Harmut Wuster, President, Newsprint Division, UPM-Kymmene, Germany
Because the modern machines that make newsprint are very expensive -- between 400 million and 700 million euros -- paper manufacturers have to be very careful to follow demand trends to determine future needs.
That's why UPM has been studying changes in reading habits, the challenges newspaper publisher faces and how publishers are meeting those challenges.
Here are some of his findings:
- A continuous pressure to lower costs, both in production and distribution, to ensure the competitiveness of print media. A clear decrease in the average basis weight of newsprint has emerged in the last two years, especially in North America.
- The total newsprint production capacity worldwide is forecast to be 39.7 million tons this year, and the demand estimation is 37.7 million tons.
- Emerging markets offer growth opportunities, even in Europe. Consumption grew 14 percent in the Czech Republic from 2008 to 2008, and 24 percent in Turkey.
- The growth of free newspapers, particularly in Europe, translates into growth of newsprint consumption of at least 250,000 tonnes in Europe alone in the next two years.
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