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Newspapers in midst of critical experimentation, innovation as digital news changes landscape

By Kristen Shane      

With attention focused on the many challenges of adapting the newspaper business to an increasingly online and mobile world, it's easy to lose sight of the importance of maintaining the strength of a company's core product: its print newspaper.

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The Canadian newspaper business is in the midst of a critical time of experimentation and innovation to adapt to challenges sparked by an increasingly digital world, say industry players and observers. By the end of this era, there may no longer be a standard way of publishing a newspaper, and only the strongest players will be left standing.

“I’m not convinced we’re ever going to go back to the time where there was only one way to do this,” said Carleton University journalism school director Christopher Waddell. “That creates lots of opportunities for innovation, it creates lots of opportunities for experimentation. It also makes the environment riskier because there’s a higher opportunity you’re going to guess wrong and fail. But that’s what happens. I don’t think there’s any rule that says newspapers shouldn’t fail.”

Despite belief to the contrary, Canadian newspapers are doing well, said John Hinds, president and CEO of Newspapers Canada, a marketing front embodying the Canadian Newspaper Association and Canadian Community Newspapers Association.

He attributes talk of the “death of newspapers” in the digital age to the misconception that the Canadian industry has mirrored its American counterpart.

It hasn’t, said Mr. Hinds. While American publishers were hit hard by the emergence of free classified websites such as Kijiji and Craigslist, Canadians were not because they were not as dependent upon classified ad revenues. The United States also has many one-paper cities, whereas Canada has a more competitive market.

These types of differences helped Canada’s newspaper industry stay afloat amid an economic recession in 2009, without the closures seen in the United States, even though Canadian newspapers have depended upon recession-hit real estate, automotive and job ads, said Mr. Hinds.

Canadian print ad revenues were down 11 per cent in 2009. In 2010, they were up two per cent in Canada, and down eight per cent in the United States, said Suzanne Raitt, Newspapers Canada marketing and innovation vice-president. Online revenues in Canada rose 16 per cent, while they had a modest eight per cent increase in the United States.

Last year’s sale of Canwest Global Communications’ publishing division for $1.1-billion, shows that investors are interested in snapping up Canadian newspapers because they are profitable, said Mr. Hinds.

The industry is in much better shape now that some conglomerates such as Canwest have disintegrated, said Prof. Waddell.

“Everybody realizes you have to have an internet strategy,” he said. “Everyone’s trying to figure out what that internet strategy should be.”

But it’s not an either/or equation, said Phillip Crawley, The Globe and Mail‘s publisher.

“I think people fall rapidly under the fallacy, the mistake of thinking the big choice is between print and digital; it isn’t. It’s a complementary activity,” he told The Hill Times last week.

Indeed, about 85 per cent of Canadians are still reading newspapers in print, and of the 15 per cent going online, most of them are also still reading print versions, said Mr. Hinds.

Canadian print newspaper readership has been stable for the last five years, according to data compiled by NADbank, Newspaper Audience Databank Inc.

Mr. Crawley said his paper’s readers want to be able to access The Globe‘s content whichever way they think is most convenient, which may change depending on the time of day. The company has been able to track that readers continue to want their 20-minute morning print fix. They want to stay connected during the day, but that might be by checking The Globe site on their desktop at work, or skimming through headlines on their BlackBerry on the bus home.

While print remains at the heart of the brand, “Our challenge is to deliver on the various new platforms available,” he said.

But in this new age, where traditional print newspapers are competing for readers on smart phones, tablets, and the internet, companies are grappling with a host of questions about how to do business effectively. They’re having to re-evaluate their business models, which have traditionally been about 80 per cent ad revenue-reliant.

One of the great debates is what a newspaper company can reasonably charge a consumer accessing its content in ways beyond the newsstand.

Well-known international publications such as The Wall Street Journal and Financial Times have put their content behind pay walls on their websites. The New York Times is starting this month its own version of a pay wall, allowing users some free access before requiring them to pay for further unlimited access.

Canadian publications are watching how the process works, said Prof. Waddell.

“At the moment, nobody could be sure what’s the winning formula,” said Mr. Crawley.

Canadian newspaper companies are also stuck with the public remembrance of huge competitions at various points in the last decade to give away free newspapers, said Prof. Waddell. Now, he said, “You’ve got to persuade people that the product you have is worth buying.”

Newspapers are also challenged by the fact that online advertising brings in only about one-tenth of print advertising revenue, according to University of King’s College associate professor of online journalism, Tim Currie.

When the internet first came out, media companies were practically giving away ads there for free, said Ms. Raitt.

“It’s very hard to go from zero to 100,” she said. “Now that we’re more established, cost of the internet is going up slowly, but you started from a very low place.”

With attention focused on the many challenges of adapting the newspaper business to an increasingly online and mobile world, it’s easy to lose sight of the importance of maintaining the strength of a company’s core product: its print newspaper.

Ever since newspapers began posting stories online, editors have had to decide what goes online and in the paper. In the process, they are redefining the purpose of their print product.

To avoid printing yesterday’s news, most news organizations have gone the way of The Globe: “Breaking news is breaking news; you don’t hold it back for the next day’s newspaper. And the next day’s newspaper has to be much more forward-looking, it’s got to be analytical, it’s got to offer insights that are not available anywhere else,” said Mr. Crawley.

But Prof. Waddell noted that that requires editorial staff to assume how much readers have been keeping track of a story through more immediate sources so they can decide how much background information to inject into their print story.

While newspapers grapple with these issues, they are faced with a second slate of competition in the digital-only domain, hungering for a piece of increasing online ad sales.

Even non-journalism Twitter feeds about local libraries or entertainment events are eating into traditional print news territory, said Prof. Currie.

“We’ll see local startups start to nibble away [at traditional print journalism sources],” he said last week.

Newspapers benefit from their strong, trusted brands, which translate online, said Ms. Raitt, but they are not taking anything for granted.

To adapt to the new publishing environment, many newspapers are exploring new publishing technologies and subscription types.

Journalists from the Toronto Star, CBC, The Globe, and the National Post all used live blogging programs to update readers in real time on the trial of convicted murderer Russell Williams last year.

National Post and Metro newspapers both use Foursquare, a location-based social media network, to alert their followers, for instance, of restaurants the papers have reviewed.

National Post‘s parent company, Postmedia News (formerly Canwest), recently launched an iPad application for 10 of its newspapers. The Globe has done the same. It has a subscription service available through iTunes, in which users can download a free app and subscribe to the paper through their iPhone or iPad.

The mobile publishing world has expanded extremely rapidly within the last 18 months, said Mr. Crawley.

The Globe and Mail late last year committed to a $1.7-billion contract over 18 years to print on new, cutting-edge presses as part of a redesign of The Globe‘s print and online offerings. Changes included improved navigation online, substantially more colour ads and a mix of glossy, magazine-like paper and traditional newsprint in the physical newspaper.

Research it commissioned shows the change has been effective so far, with people spending more time on the site and newspaper. In the first month after the Oct. 1 launch, circulation increased about seven per cent and print ad revenues in October represented “the best single month we’ve ever had,” said Mr. Crawley.

But Prof. Waddell said The Globe’s changes are unique. “They’re doing what works for them. I don’t think it’s going to work for everybody else,” he said.

A key factor in deciding how to innovate and resolve challenges facing newspapers in the digital age, is who they perceive their audience to be and what their readership’s interests are, he said.

“I think they’re struggling,” said Prof. Currie. “The best are trying things and experimenting.”

It is a critical time for the business, said Mr. Crawley. People are still working out how to best capitalize on the many digital opportunities, which will certainly hold areas of hot growth in the future.

“There are some newspapers that are not coping very well. However, five years down the line, for those that have good ownership and can invest in content and the quality of content, there will still be a strong role for newspapers alongside other forms of delivery,” he said.

kshane@hilltimes.com

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