Carringbush Media - What Are Companies Doing Online - Case Study Example

The Print Media – What Are Companies Doing ‘Online’ Name Subject/Course Instructor Institution Date Table of Contents Table of Contents 2 1.0 Introduction 3 2.0 Publishing 3 2.1 Attracting readers to physical (paper) newspapers 3 2.2 Attracting readers to ‘electronic’ newspaper versions 7 2.3 Attracting visitors to websites 8 2.3.1 Use of social media 8 2.3.2 Mobile apps 9 2.3.3 Viral fare 9 2.3.4 Fast-twitch content 10 3.0Advertising 10 3.1 Continuing to attract ‘display’ advertising in its newspapers 10 3.2 Earning advertising revenue from its websites 11 3.3 Attracting ‘classified’ advertising for newspapers and websites 12 4.0 Conclusion and Recommendations 15 5.0 References 16 1.0 Introduction Carringbush Media seeks to explore into a wide range of media, including the Internet, cable television, ‘free to air’ television, magazines in addition to more number of newspapers. This briefing paper seeks to show where the media industry in other countries is heading in respect to the use of the Internet. It reports on what media companies are facing up to the challenges of the Internet. In particular, two specific areas are covered: publishing and advertisement. By focusing on publishing, the aim is to determine how Carringbush Media can attract readers to its physical (paper) newspapers, digital versions of its newspapers and websites. By focusing on advertising, the objective is to show the company can continue attracting ‘display’ advertising in its newspapers, earn advertising revenue from its websites and lastly, attracting ‘classified’ advertise for both its newspapers and websites. 2.0 Publishing During the past decade, revenues from physical (paper) newspapers have declined. Newspapers were initially accustomed to making huge revenues with less competition. However, the transit to internet publishing has made newspapers to realize they would experience financial crisis unless they embrace new technological advancements in order to meet the expectations of their audiences (Franklin 2013; Murphy 2000). 2.1 Attracting readers to physical (paper) newspapers For the print publishers to retain a hold on the market, Everett (2011) argues that they will need to effectively engage their audience, specifically the youth. Some scholars like Franklin (2013) and Murphy (2000) have also reached an agreement that effective engagement of the youth would consequently lead to augmented levels of readership, as they form a majority of the newspaper readers globally. In New Zealand, for instance, Crispin’s (2011) recent study highlighted how attempts to profitably win the interest of youth are proving unsuccessful, as a result jeopardising the future of the print media. Compared to the newspaper publishing in Europe, particularly the United Kingdom, focus has shifted to how interest of ‘digital natives,’ particularly the youth, can be captured during the last decade. This has led to successes of newspaper publishers, such as The Independent, The Guardian and Daily Mail. In the case of New Zealand, the newspaper industry has continued to encounter a decline in the amount of readership since the 1990s, when the internet and mobile technologies surfaced. Among the most fundamental concerns has been the high rate at which the youth have, during the last decade, rejected traditional media, and particularly the print newspapers. In 2009, for instance, the number of youth in Zealand who were considered to ‘never have read a daily newspaper’ increased significantly by 8.9 per cent, as found by Nielson National Readership Survey conducted from 2008 to 2010. Only 10.7% of the total newspaper readers in the country are of the age bracket 15-24 years, while 2.9% are of the age bracket 10-15 years (Crispin, 2011). Figure 1: Newspaper readership based on age (Crispin, 2011). A similar trend has been replicated in the United States and Europe. A study conducted by Rupert Murdoch in 2007 showed that the youth tend to disregard the print newspapers and instead prefer the internet. Table 1: Time audience spend on various media (Crispin, 2011). What this implies is that the media industry will need to engage the youth to continue raking in profits. Figure 2: Newspaper readership by age As indicated in the figure above, newspapers will need to engage with the remainder of the 71% of the youth, who appear to have lost interest in print newspapers. Several strategies have been suggested. First, newspapers will need to understand their audience. According to Crispin (2011), to engage a youth audience, newspaper publishers would need to understand the audience preference for how news should be presented. Sylvie (2008) explains that the manner in which the youth consume news has changed drastically because of the emergence of the digital media, particularly the Internet, which provides abundant information. It is today possible to access news via the mobile devices, including smartphones and tablets anywhere and anytime due to the ubiquitous nature of the internet (Filloux 2013). According to Crispin (2011), to successfully provide a print news product that can appeal to youth, physical newspaper publishers would need to accept the idea that newspapers are no longer continuing to be produced in their traditional print formats. Rather, the newspapers would need to be fast and vibrant to replicate the digital environment. Sylvie (2008) also argues that print newspaper publishers should seek a greater understanding of their audience in order to conceive what they view to be important topics that should be included in the newspapers. Crispin (2011) also suggests that newspaper publishers should avoid trivialising news. In his study, he established that the youth tended to consume news in rather rush, less thorough and fragmented way compared to previous generations of readers. This implies that there is a less interest in the more serious news content, like business and politics 2.2 Attracting readers to ‘electronic’ newspaper versions The mixed results in the United States are reflective of a mix of approaches used by newspaper companies in the country. While many of the American sites – except for The Wall Street Journal – tend to permit free access to their online content whilst charging for special-interest content or archives, a majority of the newspaper companies in the United Kingdom charge for certain online content (Moses, 2015; 2016). A review of business models used by online newspapers shows that there is still a lack of any proven blueprint for doing business, and while U.S. and U.K. media companies have experimented a number of approaches, no model can generate a large number of imitators (Moses, 2015; 2016). While current market research forecast that online advertisement growth would surpass that of the print newspaper advertisement, there is no agreement among industry experts regarding how media companies can maintain acceptable levels. In such scenarios, some industry experts like Everett (2011) have argued that confusion is likely to be the outcome. For instance, The Washington Post has gained a market reputation for its readiness to experiment through its online edition called The Post’s online edition. An earlier study by Sylvie (2008) established that publishing companies that run newspaper tend to anticipate developing markets to be unpredictable, as a major barrier, hence were unwilling to experiment and imitate competitors. Still, it should be noted that while the publishers are not expected to experiment without preparation of reflection, there has to be an effective business model they could adapt to fit their individual circumstances. A later study by Everett (2011) predicted unprofitable ventures for online newspapers. The prevalent of “shovel-ware” that permitted publishing companies to simply upload print material to the internet is considered to have triggered cannibalization concerns in addition to explosion of free content. In a critical analysis by Franklin (2013), it was established that a significant driver or profitability that many newspaper publishers risked include cannibalization, as they substitute physical print newspaper with online products. Such submissions have led some scholars like Sylvie (2008) to argue that internet content is essentially an inferior item that made it impossible for the traditional subscription model to flourish. Among the publishers that have succeeded in their online strategy is The Washington Post. In October 2015, it broke online traffic record in outshining The New York Times for the first time. According to Moses (2015), several factors have contributed. These include a broad distribution strategy using the social media and mobile apps, attempts to speed the website load-times and lastly the frequency of news articles. At the same time, The Washington Post has also pursued a discounting model for its paid circulation. 2.3 Attracting visitors to websites The strategies for attracting visitors to news website include: 2.3.1 Use of social media A major contributor to the global growth of the Post’s audience is the social media. According to Franklin (2013), media companies should no longer imagine that the audience will come to them. Therefore, they require a robust social distribution strategy for reaching the audience wherever they are. Moses (2015) comments that the Post has aggressively engaged in the distribution of its content universally by using Facebook Instant Articles and apps like Apple News (Moses 2016). The strategy has been instrumental in the growth of readers. For instance, between May and October 2015, the traffic for its Facebook account increased to nearly 50% from 43% due to sharing of content and social referrals on the social media platform. Additionally, the companies experienced a major spike between May and June, after recording a 19.3% rise in Facebook visits to reach 11.5 million (Moses, 2015; 2016). 2.3.2 Mobile apps Given the rise in the number of mobile internet audience as a result of the high mobile phone and internet penetration globally, mobile phones have become a focus of leading newspaper publishers (Marther 2015). According to Moses (2015), in 2015 alone, the Post’s overall audience increased by 59 percent because of the mobile news apps the company integrated. Although the audience that use desktop computers increased by only 6%, the audience that used mobile phones increased by nearly 12% (Moses, 2015; 2016). 2.3.3 Viral fare Similar to other newspaper publishers, the popular stories published by The Washington Post indicate a traditional newsroom that balances the demand for viral news content with hard ones. An additional means to exploring the use of social media by the company is its Facebook posts’ high frequency of interaction. Indeed, compared to the Times’, the Post acquires a greater level of interaction for each post than the Times, which acquires a greater number of interactions in general. According to Moses (2016), the reason for this is that the ‘Times’ has a larger base of audience across that spreads interactions. Hence, it has a lower proportion of fan base that interacts with each post. The Washington Post also publishes more viral videos, which drive traffic to its website. 2.3.4 Fast-twitch content The Post has also focused on creating fast-paced articles. By emphasising on clicky headlines, in addition to the idea that the Post gets to discount its subscriptions, it has managed to keep a large audience, attracting drive-by visitors, as well as users who spend more time on the website and visit more pages than previously. 3.0 Advertising 3.1 Continuing to attract ‘display’ advertising in its newspapers According to Everett (2011), the sale for advertising space has become particularly significant during the recent years, as consumers have become more unwilling to pay for digital or print newspaper subscriptions. Everett’s (2011) reviews revealed that between 2006 and 2011, advertising contributed up to 80% of the total revenues for newspaper publishers. Earlier, advertising contributed up to 6% of the total revenue. Franklin (2013) suggests that if advertisers can claim back their profits if the ads are made to simulate newspaper content, as this would enable them to attract greater viewership. In Franklin’s (2008) earlier view, while such a strategy is likely to miscarry in the future, the hypothetical limitless space on the Web has made it simpler for newspapers to cram more ads for greater revenue. At the same time, displaying advertising on the Internet is dissimilar to that of the print news, as advertisers have to pay for the display of their ads for certain amount of time. Internet users who are interested then get to click the advertisement to view the advertised product. Sylvie (2008) also suggest that while the profit margins are on steady decrease, newspapers still manage to maintain their profitability using technology-driven successes, as well as by cutting costs to reduce the costs of printing. 3.2 Earning advertising revenue from its websites According to Franklin (2013), as online newspaper business continues to evolve, the motivation to make profit becomes clearer. Marther (2015) suggests “content-based revenue generation,” where advertisers use versioned and archival advertising that are personalised. The researcher further explained that the discovery of innumerable models has corresponded with the rising online newspaper profitability in major American firms like The Washington Post. In particular, the willingness of the industry to accept paid content as well as to increase online advertising, although as an addition to income generated through the print newspapers instead of stand-alone business (Hiers 2013). Franklin (2013) also contends that although newspapers must continue experimenting with varied number of approaches, including a tendency to charge for certain content, while still depending on advertising as a means to sustain other content. Despite these, the growth of competition for online readers has only served to increase financial insecurity as well as necessitated a need to search for profitable business models. Some scholars like Sylvie (2008) have suggested a need for mergers and acquisitions, as it leads to avoidance of antitrust concerns. In respect to content, Schneider (2012) suggest that internet technology offers greater advertising opportunities. Theoretically, consumer-targeted technology can assist publishers to charge a proper value as product also delivers a commercial targeted at certain subscribers. As a result, understanding demography of the subscribers is essential as this would boost revenue growth from per-audience-member advertising as well as permit the newspaper to reduce the prices for advertising. To create demand with the global audience, there would be a need to re-evaluate the value chain for newer advertising, pricing and packing techniques. When the markets are considered in parts, and value chain links are placed into new use, the newspapers would advance toward digital and get to address selective audiences (Franklin 2008; 2013). 3.3 Attracting ‘classified’ advertising for newspapers and websites Initially, classified ads generated a larger proportion of revenue for newspapers. Classified ad was therefore a domain of newspaper publishers. However, the internet has made classified ads to be lucrative for newspapers. In a 2015 study of 11,000 consumers of classified ads globally to determine how the classified ads for websites could be leverage, McKinsey & Company identified two basic online classified ad business models that could be used: horizontal model and vertical model (Meffert et al. 2015). The horizontal model provides ads across a wide variety of categories. Examples of such websites include FINN in Norway and Craigslist in the U.S. On the other hand, the vertical model concentrates on one category, including cars or real estate. Examples include Rightmove in the U.K (Meffert et al. 2015). According to McKinsey, Norway and France predominantly used the horizontal model, where 75% of those surveyed preferred online ads. In the U.K. and Germany, consumers preferred both online and print classified ads. In these regions, the classified ads dominated. In the U.S. and Brazil, consumers still preferred print over classified ads. For instance, in the United States, a mere 28% of consumers preferred online ads (Meffert et al. 2015). Figure 3: Penetration of classified ads model by region (McKinsey & Company 2015) Figure 4: Horizontal-dominated classified ads model in Norway (Adapted from McKinsey & Company 2015) To attract consumers in the horizontal markets like Norway, McKinsey suggests that online newspapers must examine how their site listings are relevant to consumers. For instance, the website has to list commodities that are highly relevant to the audience. This may require using crawlers or manually listing counts. McKinsey further suggests a need for online newspapers to careful consider the monetization trade-off. While revenue generation is highly significant, giving up monetization potential in some market segments by making the classified ad listing to be free potentially attract more listers hence creating an attractive offering for the targeted audience. McKinsey further suggests that online newspapers may need to consider specialized product offerings. Newspapers that differentiation in horizontal markets should take advantage of their broad audience to start developing own innovative offerings. Alternatively, they can consider partnering with innovative offerings to allow themselves to provide the targeted audience with broad yet highly tailored offering in a certain category (Schneider 2012). To disrupt the vertical markets, players considering this option have to monitor the market and as a result consider integrating their offerings they consider to be most successful. Alternatively, they may consider reinventing the marketplace where they provide highly tailored in addition to highly user-friendly offerings their preferred categories ((Meffert et al. 2015). From print newspapers, creating a loyal consumer base is also essential. According to Sylvie (2008), the newspapers depend on a loyal target audience. A study by Sylvie (2008) revealed that traditional media outlets have made progress in regaining the audiences they were losing by supplementing traditional print newspapers with online content, hence providing convenience to their audience as well as to enable their audience to seek for information that is inaccessible in the traditional print newspaper. 4.0 Conclusion and Recommendations As established, revenues from physical (paper) newspapers continue to decline even as transit to internet publishing is becoming more lucrative for newspapers. However, they would need to meet the expectations of their audiences. For Carringbush Media to attract readers to its physical (paper) newspapers, it will need to effectively engage the youth, as they form a majority of the newspaper readers globally whose interests are neglected. However, Carringbush Media should accept the idea that newspapers are no longer continuing to be produced in their traditional print formats. It should also avoid trivialising news. To attracting readers to ‘electronic’ newspaper versions, Carringbush Media should consider using broad distribution strategy through the social media and mobile apps. It should also make attempts to speed the website load-times and the frequency of news articles. At the same time, The Washington Post has also pursued a discounting model for its paid circulation. To continue attracting ‘display’ advertising in its newspapers Carringbush Media should make the ads to simulate newspaper content. Additionally, to earning advertising revenue from its websites, it should increase online advertising, although as an addition to income generated through the print newspapers. To attract ‘classified’ advertising for its newspapers and websites, Carringbush Media will need to list commodities that are highly relevant to the audience. It should also reconsider the monetization trade-off by making the classified ad listing to be free as a means to potentially attracting more listers in order to attract targeted audience to its website. It should as well consider specialized product offerings or partnering with innovative offerings, as this would allow the company to provide the targeted audience with a broad and highly tailored offering. From its print newspapers, creating a loyal consumer base is critical. Carringbush Media can reclaim its audiences by supplementing traditional print newspapers with online content. 5.0 References Crispin, S 2011, Attracting Young Readers – Tactics for Engagement, viewed 17 Sept 2016, Everett, E 2011, "Transformation of Newspapers in the Technology Era," The Elon Journal of Undergraduate Research in Communications, vol 2 no 2, pp.102-106 Filloux, F. (2013). Two strategies: The Washington Post vs. The NYT. Retrieved: Franklin, B 2008, Pulling Newspapers Apart: Analysing Print Journalism, New York, Routledge Franklin, B 2013, The Future of Newspapers, New York, Routledge Hiers, M 2013, How to Increase Your Classified Ad Revenue, viewed 18 Sept 2016, Marther, J. (2015). How the times have changed for The Washington Post. Retrieved: Meffert, J, Morawiak, D & Schumacher, T 2015, Online classified ads: Digital, dynamic, and still evolving, McKinsey & Company Meyer, M 2014, "Brick by brick," Columbia Journalism Review. Retrieved: Moses, L. (2015). How The Washington Post leapfrogged The New York Times in Web traffic. The Washington Post. Retrieved: Moses, L. (2016). How The Washington Post grew digital subscriptions 145 percent. The Washington Post. Retrieved: Murphy, C 2000, "The Case for Irish Newspapers Entering the Interactive Digital Market," Irish Communications Review, vol 8, pp.50-56 Schneider, G 2012, Electronic Commerce, New York, Cengage Learning Sylvie, G 2008, Developing an online newspaper business model: long distance meets the long tail, viewed 18 Sept 2016, VanHoose, D 2011, ECommerce Economics, New York, Taylor & Francis Read More