The failed newspaper in the FWI made several strategy mistakes, but what could they have done?
After writing many words on the failed newspaper business model, I want to write about what could have been done to save France-Antilles and hopefully develop a simple framework for other publications across the Caribbean. Regardless, I hope this promotes discussion. What’s your take?
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On to the update.
Missteps and a lack of strategy
In The long slow demise of France-Antilles and Newspapers in the Caribbean, I wrote:
The Flawed Business Model
“Information wants to be free” a phrase attributed to Stewart Brand who founded the Whole Earth Catalog in the 1960s. He argues that technology could be liberating instead of oppressing and at the first Hackers Conference in 1984, he apparently told Steve Wozniak (one of the three co-founders of Apple):
“On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.”
The prescient point of his argument was that information’s cost was getting “lower and lower” and that is the situation most publications find themselves in today. Much of the information provided in newspapers today is widely available online from multiple services, and here’s the sting in the tail, for free in many cases.
But what is most important in the statement above, is the fact that he identifies that information has value and is hence, “expensive”, and it is precisely here that most newspapers fail in their strategy. Much of the information is provided in “filler” articles that have been scraped up from wire services such as AP (Associated Press). These articles have literally no value virtue of the fact that every news outlet prints what is, for all intents and purposes, the same article.
Newspapers are a business built on assumptions from a bygone era. Firstly, the sales and advertising arms of the newspapers require a lot of staff. There is Sales, there’s Account Management, there’s Graphic Design and of course Operations Management. Those are huge fixed cost to deal with for just a pretty advertisement, and only profitable for premium advertising (of which there is less and less as outlined above). Newspapers also operate on the assumption that the bundle of services, is in and of itself, valuable. That was true, but is no longer relevant for readers.
Couple this with the very real fact that the business model of the newspaper business took a serious hit when Facebook and Google cornered the market for advertising, with very grave effects on the price and availability of advertisers willing to spend on printed ads. The protected environmental factors have prevented newspapers from listening to reality. I find it all the more surprising given that here, in the FWI, there is no real competition, which proves the point about external factors playing the central role in killing these businesses.
What should France-Antilles have done?
Firstly, I need to state that I, personally, am not happy with the end result and that I understand that an available and free press — free as in not politically aligned — is essential for a thriving democracy. Newspapers, journalists and investigations are healthy for a country or state, even if they are sometimes difficult conversations. So, to put it succinctly, I want a newspaper in the FWI to flourish out of this debacle. And I want to see the same across the region. For the simple reason that nationalism is currently spreading around the world, and we are not immune from its disease, and one of the first ways nationalism gains ground is through the press. Be vigilant!
(/end.rant)
The crux of the problem for FA and local newspapers is that they are not valuable anymore. Or to put it another way, the content sold has lost its value, and is, in some cases is utterly worthless. Be careful not to confuse interest and importance with procuring value that can be sold against advertising or to the public. It is evident that the newspapers are essential (see above), but the fact that their value has decreased is the reason the current business model is unsustainable.
As I wrote in The long slow demise of France-Antilles and Newspapers in the Caribbean:
Unnecessary Costs
In printed newspapers, there are many fixed costs that render the finances difficult to balance. Printing presses cost phenomenal amounts of money and require trained and dedicated staff to operate them. When you are competing against virtually free digital distribution to get the same information out to your audience, these extra costs are a major burden, and I would suggest, unnecessary now.
Not only that, but the costs of the raw materials required to physically print — i.e., paper and ink — add to the operating budget in a non-inconsequential way. Paper, by the way, is not getting cheaper either due to environmental concerns. Ink is expensive and it is also toxic. Atmospheric fumes from inks are noxious and large costs associated with the handling, processing, usage and disposal of ink are apparent.
Then there is distribution. Without going into any detail, it’s obvious to conclude that distribution of reams of paper has associated costs. Those costs being elevated by the fact that, as a newspaper and the importance on getting to the outlet early in the morning, entails higher-than-standard-hours wages.
Adding high costs and low sale value together, it can only lead to one outcome — the one we’ve seen played out at FA over the last few years.
The first thing FA should have done is use its brand value and monetise that instead of trying to monetise using simple advertising that, as we’ve noted, enters less and less in the coffers. Using ad networks like Facebook and Google might be an option, but they shouldn’t have relied upon those either. Those networks' payout rates are dropping significantly too, as pressure from competition and the way ads are valued (new channels of advertising are more effective — influencers, etc.). Still, they are also suffering from the accelerating backlash from their surveillance capitalism tactics that the public is coming around to understand better. Monetising their brand value takes the form of using something like a direct-to-customer subscription aimed squarely at digital use (one could consider options for print too, but as a secondary channel).
Many will note that FA had a digital offer, but it was flawed in several respects.
For one, it was considered too expensive as it was priced equivalent to the physical newspaper. The physical aspect imbued value for money, you can’t do that with a URL or email. Considered too expensive was not its only flaw; it was principally a PDF of the paper version originally, and it was downright hostile to use.
Digital has to offer the same thing with less friction and for less cost. FA did not. Thirdly, being a clone of the paper version, all the adverts printed in the paper version were also visible in the digital version, offering FA zero scope to monetise differently based on context. FA could have essentially double-dipped by providing advertising based on print and digital for the same text article. Digital affords the possibility to micro-advertise on each item, something that is unsupportable for the reader on paper.
As noted earlier the content itself is the source of difficulty for newspapers and was for FA. Competing with not only freely accessible online publications, but trillions of written words of quality (like these 😀) that are freely available, has made it difficult for newspapers to differentiate themselves.
Full disclosure: I fully intend to take this newsletter to a paid publication in the future, as I state in the second paragraph of the about page.
FA is competing with articles that are on the newswire (national and international), blogs, Facebook pages and tweets more locally and often available faster and they’re trying to bundle all that together into a value-added package to sell to the user. So their costs, their suppliers and the distribution is all tied to a business model that no longer makes any money, and by extrapolation, no longer makes sense.
A business model based loosely on what I’m trying to do here with this newsletter would have better served FA. A newsletter-type publication with richer content, more personal and better targeted to the audience — following the Jobs to be Done model, i.e. hyper-local news in detail with analysis and context, hyper-local sports news with more detail and more context and the odd super-detailed investigative work about a local issue, Chloredecone anyone? (1)
So what does this model fix that the old one couldn’t? For one, distribution. It costs much less to distribute digitally having few fixed costs that are exponentially degressive with an increase in subscribers. Secondly value, or as I put it above, reduced expense.
With this model, production costs (printing should be outsourced) together with the distribution costs mentioned above, are drastically reduced: no trees harmed. More importantly, there is perceived value.
A bundle of scraped articles from the newswire (worthless) packed between low-value simplistic reports of local happenings (we don’t need to know that a dog in a far off town soiled the garden of his neighbour), ended with brief sports results with zero opinion or analysis (also of little monetary value to the publication). I'm a little harsh here, I know. It is not that far from the truth, however!
Why? There used to be value in being informed of a local event; this is no longer the case. Facebook and Twitter tell you about every activity on your Island, and the world, reducing the value of being informed. It's free on Social Media, why would you pay to buy a paper that prints it? It's madness. Virtually every event has its Community Manager dedicated to getting the word out using all the online platforms.
The fix for publications is to concentrate on informing readers in a more personal manner, with longer more informed and better-developed stories helping the reader understand the impact for him or her. It could include a quick light list of international news to inform, leaving the reader to further delve into the subject using the media better suited to the job. A modern publication also needs to provide an amount of free content — one day a week seems to me to be the sweet spot — and by doing so, they build trust and showcase their best journalism to hook subscribers and capture new converts.
On the Internet, people pay for what they care for. Developing that feeling between the publication and the reader is all-important to driving long-serving readership and ultimately profit. And when people care about their town, Island or country, they are inherently more willing to pay for quality content that both sustains those publications and allows them to feel they are contributing to development. They are participating in society, tout simplement.
Footnote:
(1) Chlordecone in English is Kepone - a significant health scandal in the French West Indies currently.
Photo by AbsolutVision on Unsplash
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