Alex Gamela - Digital Media & Journalism » newspapers

The failure of the single product business model

Alex Gamela — Tue, 05 Apr 2011 14:22:02 +0000

There's more than coffee at Starbucks, Baker Street, London, UK (© Copyright Gary Rogers and licensed for reuse under a Creative Commons Licence)

After a few months teaching online writing and multimedia narratives to journalists, I found out that their biggest question was never if links worked, how valuable video editing skills are, or why social networks have an impact in content distribution, they had already figured that out. Their biggest doubts were about how to make money with journalism. And I got some stunned reactions when I told them that was impossible.

My parents owned a business for 11 years, a small café, in the city centre,with a mixed clientele, from passing shoppers, bank workers, car mechanics, retired people and local fauna. In units, the product we sold more was expresso. If you ever been to Portugal you’ll know we love our shots of expresso throughout the day. But that was the cheapest product we had and without a great profit margin. So, if we relied our whole business on selling expressos, we would never make it.

And the clients changed according to the time of day, not only in type but also in needs: the working, early morning, breakfast yearning crowd had nothing to do with the late night binge drinking costumers. So we had different products for each one of those types: fresh bread and pastry in the morning, to go along with coffe and milk, and cold beer and spirits for an after dinner meet up over a football match on TV.

Key products for key types of clients. And that was just a local café. Take Starbucks for example: they will never be big in Portugal because they have already a huge competition in the coffee selling business and they have the worst and most expensive coffee that you can find in that block, yet they attract lots of people due to two main reasons: an attractive brand (you see Starbucks in the movies and the TV shows with lots of young, attractive, intelligent people), and variety when it comes to all the things you can do with coffee. Even so, they had to adapt and find refuge in shopping malls, when they prefer to be out there in the street.

So they figured out who were their clients, where they should find them and offered them not the same product as everybody else but derivatives from it, supported by an appealing image. So why don’t media companies do the same?

Information is out there, replicated at the speed of light, so it’s not scarce. Quite the opposite, as we know it rages in volumes. And though points of view may vary, the basic info is out there. Cheap coffee on the go. Different types of audiences, at different times of the day, having different needs. Yet the strategy is to serve them all bread and butter. Of course, there’s specialized media for specific audiences – sports, economics, music, etc – but I’m talking about generalist brands.

What was their product? Articles, usually wrapped in paper, that costed more than the product itself. With the internet, they lost the wrapper and the product no longer came in a package, but in pieces. So some decided to put the product in a box and charge for a peek inside. From coffee in paper cups to coffee in digital, exclusive mugs. Still coffee though, and most of the times as good as the competition’s.

The solution is to have more products than coffee, or sell beverages based on the black stuff but that only you can make and charge for it – I bet Starbucks here sells more cappucinos than expressos. This implies three things: new products, trained staff to make them, and know who are their consumers and their needs.

Unfortunately, many media companies haven’t been able to identify their online audience, erroneously believing it’s the same as their paper audience, and feed them the same stuff but in a different container. Worse, with the need to create better, more demanding, high quality products, they’re firing the most experienced to hire cheap labour. It’s like turning a gourmet restaurant with a good chef into a McDonald’s. Yeah, people go to MacDonald’s but it’s crap anyway. And they have their business strategy better defined.

So let’s get back to basics: what are the core elements of the news business?

Information

The amount of products based on information goes well beyond the 500 word article, but here are just a few ideas to use information in a more valuable way:

We have data, specialized professionals with access to specific sources so why not sell special analysis for specific audiences?

Databases are also valuable – imagine offering full access to all the data in archive to all the football matches ever covered in the first league.

Thousands of images are taken everyday by photographers, why not open a photo bank where they could be sold cheaply for specific projects or make them easily available for sharing and create a new stream of visitors to the original story? Think of the long tail.

Go beyond your “natural” market and expand. Have versions in different languages (at least one more, believe me it works).

New languages for new devices, unique content, immersive content.

Stop selling ad space, sell ads that are fit to be published in your environment.

And the one item that must always be constant: high quality information. Fast food will kill you in a more demanding world.

People

They do not only get the information, they distribute it and create on top of it. Support that. It’s like having millions of newspaper boys shouting out your headlines.

Transform the online audience into real people in the offline world: get to know them, organize meetings, gatherings, conventions. Make them pay for what you offer them there.

People have needs, identify them. The Guardian has a dating site, you could have your own real estate or job agency, whatever people need the most in your market.

Observe how their informational needs vary over the course of the day and the week, and offer them options to adapt your content to their routine. Understanding how your audience consumes news will help you create the right contents for it.

Make information useful. Being just informed is so 1.0. People must have the chance to do something with it.

Stuff

Instead of giving away books or DVDs with the Sunday paper, sell them cheap on your website.

Stop selling ad-space, get commissions for selling products directly on your pages.

You have a brand, if you get people to identify with it they’ll buy what’s associated with it. I don’t go to Starbucks, but I like their mugs.

And if you want more ideas from me you’ll have to pay me as a consultant. I’m joking, but depending on the strengths of each company there are many different options to make more money than with just the news. You have to evaluate what kind of information based products you can create and see if there are any markets for them, and stop thinking that you’re only a newspaper, or a radio station, or whatever news company fits you. And you are dealing directly with your audience, so you must get the most out of it.

You are a place where people go for coffee but have the option to get pastries, have lunch or a nightcap, and that’s what keeps you afloat. Not the least expensive product on the list.

“The best and most influential reporters are becoming brand names”

Alex Gamela — Tue, 02 Mar 2010 10:07:22 +0000

Just a quick thought:

Journalists are embracing the tools of social media to create online personas. They are breaking free of the constraints of traditional media to blog and tweet everything from deep thoughts to random musings to personal information that was considered verboten not too many years ago.

Not everyone can be a one man media conglomerate, but reporters are encouraged by their editors to be more transparent and accessible to readers offering new opportunities for engagement. Brand name reporters are far more accessible than their counterparts in the era of old media. You now have multiple avenues to get to know the most important reporters covering your business. Keep track of their musings through various social media tools and connect with them when appropriate.

A reporter’s tweet can become an entry point for a conversation outside of the usual give-and-take dictated by a breaking news story.

A world without newspapers

by David Schneiderman

Some other good ideas can found there.

Portugal: Newspapers sales drop | Vendas de Jornais descem

Alex Gamela — Thu, 03 Sep 2009 09:12:02 +0000

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sources | fontes: APCT, Jornal de Negócios

Latest circulation data made available for portuguese newspapers reflect the global trend of declining sales. Finance editions increase number of copies though. Is it the crisis?

The Portuguese Circulation Control Association (APCT) revealed this week the circulation numbers regarding the first six months of the current year. Comparing to the same period last year, the picture is quite grim: most newspapers have decreased their sales, apart from the specialized financial editions that had a rise in demand. The overall drop in the portuguese market reaches the 7,6%.

The most notorious decrease in sales belongs to Diário de Notícias, that “stopped investing in promotional marketing last March, in a cost reduction strategy to face the difficult economical moment worldwide press is going through“.

Comparing the January/June window of ’08 with 2009′s, there were sold, in average, less 26 174 newspaper copies, daily.

Os últimos dados das tiragens de jornais portugueses reflectem a tendência global de quebra nas vendas. As edições financeiras, no entanto, subiram o número de exemplares. Será da crise?

A Associção Portuguesa de Controle de Tiragem (APCT) revelou esta semana os números referentes aos primeiros seis meses deste ano. Comparando com o mesmo período do ano passado, o quadro é bastante negro: a maioria dos jornais diminuiu as suas vendas, com excepção das publicações financeiras, que tiveram um aumento na procura. A quebra global do mercado português atinge os 7,6%.

A descida mais notória é a do Diário de Notícias, que “em Março deixou de investir em marketing promocional numa estratégia de redução de custos face ao difícil momento económico que está a afectar a imprensa a nível mundial“.

Relativamente ao período de Janeiro/Junho de 2008, em 2009 venderam-se, em média, menos 26 174 jornais por dia.