It is common knowledge that newspaper business is declining fast. The number of subscriptions of printed newspapers declined 23% in Finland from 2012 to 2014. The traditional business platform of newspaper publishers is burning in high flames.
Digital content services are considered to be the natural rescue ship for the companies. Unfortunately it seems that these rescue ships are already leaking. The yearly growth of digital and combined digital-print subscriptions of the Finnish newspapers in 2014 was 16%. This was a fast decline from 141% growth in 2013.
The digital subscription business seems to be maturing fast. The early mover, and the biggest digital newspaper in Finland, Helsingin Sanomat Digilehti grew in 2014 only 1.6%. It seems that the main transformation from print to paid digital subscription has actually already happened, and the size of the new business is significantly smaller than its predecessor.
Free on Web already in decline
The critical followers of media industry have been claiming that publishing free Web or mobile content by the publishers is a reason why paid media is declining. But decline of mass media has also reached free digital content.
TNS Gallup measures the amount of people Web pages reach weekly. The methodology has been the same only from the week 8 of 2015. Between the weeks of 8 and 26 of 2105 the sum of weekly visitors of five largest Web pages has declined 8.5%.
Listings also leaking
The move of traditional classifieds and information services to digital has been one of the sources of digital revenues to print publishers and expected rescue ship. But also here we find leaking. E.g. Alma Media Oyj collected 2.2% less revenues from its listings services (e.g. etuovi.com and monster.fi) from Finland during the first quarter of 2015 than a year ago.
The challenge in the listings services is that there are new entrants that provide services free of change. They collect their revenues from ads or complementary assets. This happened, e.g., in C2C marketplaces when free service tori.fi entered the Finnish markets.
Mass bundling loses it value
The challenge of mass media is that it has traditionally generated it value by bundling information from different sources to a mass produced large package. The end-product has been a non-tailored package, from which the majority of readers have found something to read, but 90% of the content has not been very interesting for an individual.
The mindset of the whole organizations–starting from the education of journalists–has been how to efficiently find already existing content like news and bundle it to an efficient mass produced package.
From the point of consumers, the biggest improvement the Internet has made possible is unbundling of the traditional package: the consumer does not have to subscribe to something of which she does not need 80-90%.
This means that the value of bundling in media is declining fast. Instead, the readers are interested in getting value added on the information itself. The increasing popularity of data analytics and related businesses is one symptom of this.
Time for a fleet of powerboats
From the point of view of media business this unbundling means that there will not be one or two new businesses replacing traditional daily paper. There will be dozens of different services, instead. The industry is fragmenting. This poses major problems for organizations, whose traditional core strength has been the capability to aggregate and bundle. The companies need to build a fleet of powerboats instead of one rescue ship.
Some companies believe that the fire on the platform leaves some parts of it intact. But this is a hope without foundation. My 75 year old mother-in-law is terminating her subscription to local newspaper Savon Sanomat. She got a tablet last the spring and has now noticed that “all the stories in Savon Sanomat are already old.”
The only niche left for newsprint will be those people so demented that they do not remember what they read yesterday.