The news about news came right from the very top.
The chief executive of News Ltd, Australia’s largest newspaper company, John Hartigan, told us that newspapers in Australia are not dying in the face of the internet.
Well, he would say that, wouldn’t he?
As it happens, a lot of arguments he put in a speech this week to the National Press Club had a ring of truth to them.
He noted that newspapers broke most of the big stories recently, not bloggers or even radio or TV. Naturally, he cited his own company’s newspapers’ breaks. Nonetheless, Fairfax newspapers, including The Canberra Times, too, have similarly had many more national and local breaking stories than their electronic competitors.
That alone, of course, is not going to ensure eternal life for newspapers. Good journalism is a necessary but not sufficient condition for continued existence.
Newspapers need a good economic base. This is where the figures continue to add up for newspapers.
The advertising market in Australia is worth about $13.5 billion. Yes, internet advertising is growing more rapidly than any sector. It grew by more than 25 per cent in the past year to $1.7 billion – still, for all the hype, one in eight advertising dollars. Newspapers take almost one in three advertising dollars — $4.1 billion, slightly up on the previous year despite the downturn. Free-to-air television attracts less than newspapers at $3.4 billion.
There is a virtuous, as distinct from vicious, circle here. The $4.1 billion raised by newspapers is a lot of money to support quality journalism. And bear in mind the core product of newspapers is journalism. Sure, a lot of space goes to advertisements and a lot of money goes into production, but the non-journalism expenditure is a far less proportion of revenue in newspapers than in other media. The revenue from television and radio advertising largely goes to the entertainment that takes up, perhaps 90 per cent of air time.
As for the internet, precious little advertising revenue goes to journalism. Indeed, the little that does go that way goes to mainstream newspaper companies and their newsrooms anyway.
So lots of advertising dollars are raised through print journalism. Sensible newspaper managers will see that that revenue will only continue if the journalism is worthwhile. So they will support good journalism which will attract the advertising dollars.
Businesses would not fork out $4.1 billion a year unless they were getting value for money.
Advertising in print obviously works and it is worth asking why.
For the quality dailies, advertising success stems from who is reading and how are they reading. They are a valuable audience: attentive, intelligent, discriminating, and with high disposable incomes.
Readers usually get the paper and spend some time with it. They usually turn every page at least in the front part and those other parts that interest them: sport, business, entertainment or whatever. They are relying on the newspaper to contain the important things of the past 24 hours and some extra.
No-one reads all of it, but most readers feel that if they have browsed through it they will not have missed anything important.
They do not want to be distracted in this time. They will happily move within the paper from item to item seizing on anything that interests them, including advertisements. When they look at or read ad advertisement they are interested and attentive. They only read what they want to read. They absorb the details, and in any event can always go back later to check details.
Most readers of quality dailies have higher education and usually higher incomes and higher disposable income. They can usually afford the things they want to buy without waiting.
It is worth comparing them to the consumers of other media.
Television and radio advertising is a distraction to the main program. It is not, as with newspapers, absorbed voluntarily with interest.
Internet users are even more immune or even hostile to display advertisements, so much so that internet designers have to throw the advertisements in readers’ faces, often blocking sought-after material for several seconds – very annoying.
Internet users are usually pre-possessed in a search for particular information. They are so intent they will not be distracted easily.
However, some advertising works very well on the internet – that which the user actively seeks. Usually that is classified advertisements, particularly jobs, car and real estate.
This is the sad part of the history of the internet v newspaper competition. In the early days of the net, newspaper companies moved too slowly. They allowed others to take significant chunks of advertising instead of setting up their own internet arms early on.
Non-news companies have taken a huge portion of the cars, jobs and real estate markets and the news companies are having difficulty getting them back. That is money lost to journalism because these sites do not do any independent journalism.
Some have pointed to newspaper closures in the US as a harbinger. But they have almost all been cases of the closure of the lesser of two newspapers in a single city. That shake-out already happened in Australia in the 1980s and 1990s.
It defies logic that newspapers could survive in the internet age. The internet can deliver the same written information and more and better graphics and video. It can arrange information more effectively.
But it now appears there is a continuing demand for good journalism on paper and that businesses will continue to advertise in it because it works. Newspaper classies have taken a large and permanent dint, but the display ads continue to work. Indeed, some job and real estate ads appear in the news pages rather than in the classifieds because they successfully target people who were not even thinking of changing jobs or houses but get the idea from the ad.
The journalism will continue to change. The internet may attract readers who want the short and sharp but print will remain the medium for the longer, analytical, specialist articles and newspapers will continue to give the 24-hour package.
Indeed, the tabloid newspapers may be more vulnerable than the qualities because they lack those attributes.
Perhaps “defy logic” is the wrong phrase. Markets have a logic of their own with a fundamental premise – what people will buy.
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