27 Print Dollars for $1 Digital; Social News; Papers in Trouble; Kodak v. Fuji
I posted this picture via Twitpic earlier today, and my digital brethren quickly chimed in on how much they felt like this in their daily lives. And I get it. Working in the media industry these days is far, far different from the way it was when the journalists of my generation got into the biz. Looking back at recordings from the early 90s, I am struck by how much free time we all seem to have had back then – these days, you feel like you can’t take your eyes off your Twitter feed for even a second, lest you miss the Next Big Meme and are thus branded as a digital troglodyte who “just doesn’t get it.”
So yeah, if you feel like you’re lost in the desert and that the only future involves your bones bleaching in the sun next to a steer skull … well, maybe it’s because most newsrooms these days evoke the feeling you get when wandering through any of the weathered ghost towns that dot the arid landscape in Arizona and Nevada, left behind when the seams of gold and silver petered out.
First, the bad news. Over at Reflections of a Newsosaur, Alan Mutter is running the numbers, and it appears that for the news business, migrating to digital is not such a profitable move.
publishers since 2005 have lost $26.7 billion in print advertising revenues while gaining only $1.2 billion in new digital revenue. Thus, the true ratio of print loss to digital gain is 22 to 1, not the 7 to 1 reported by Pew in March.
The difference between my findings and the Pew conclusions is that Pew only looked at the performance of newspapers in the last two years, a period in which most publishers put more emphasis than ever on building digital revenues to offset their print losses.
While the long-overdue effort is welcome, publishers have a lot of ground to make up.
As if that wasn’t enough, we’re starting to see that the audience has started to figure out that this social media stuff is good for more than just milking virtual cows and spamming all your friends about it. It turns out that more than 50% of people who follow news say that they are learning about breaking news from digital/social sources. They realize that what they are getting may not be completely accurate – but it’s more timely, convenient, and provides them opportunities to share and comment on what is happening in the world around them:
Courtesy of: Schools.com
Now to some more actual financial news from newspapers — the Gannett chain of papers continues to slide. The print ad revenues are down $50 million from last year, and the rise in digital revenues is only $11 million to offset those losses:
Publishing segment operating revenues in the quarter were $874.1 million compared to $929.8 million in the first quarter last year reflecting soft advertising demand due in part to the tepid pace of the economic recovery. Digital revenues in the Publishing segment were 12.5 percent higher in the quarter.
But there is an interesting bit from HDVideoPro.com that might provide a glimmer of hope – a promise of an oasis, even if it is not yet distinct:
“At the beginning of 2012, a monumental event took place in regards to filmmaking. As most of you already know, Kodak recently filed for Chapter 11 bankruptcy […] with this news, it is easy to say that Kodak is the biggest casualty of the digital revolution. I read an article in The Economist recently, which analyzed Kodak’s ineptness at changing its business model. The most interesting aspect of the article is that Kodak’s biggest competitor, Fujifilm, is still doing reasonably well financially even though the businesses were nearly identical. The big difference was that Fujifilm adapted to the coming film-to-digital changeover earlier and more efficiently than Kodak. The Japanese company developed a “three-pronged” plan: milk their film divisions as long as possible, get ready for the inevitable changeover from film to digital, and develop new businesses.”
The article goes on to say that Fuji recognized that it was not a film company. It was a chemical company. So they took that core competency and used it to start making optical films for LCD screens, and branching out into the lucrative world of cosmetics (using their knowledge of colors and compounds).
There’s a very strong lesson there for media companies.