The Blog

Finally, Newspapers Are Facing the Reality of Digital

The Sun newspaper recently announced that it would stop its 'pay wall' on its site, making online stories "largely free" to the public by the end of November. With The Sun having an estimated readership of 5.6m, the largest in the UK, this represents an important change in an industry that has been divided on the best way to administer digital media and to monetize their content.

Whilst the Daily Mail, The Guardian and The Telegraph currently run subscription-free services, the Sun and the Times, both part of News World Corporation, charge a weekly fee for their online content. With the removal of the Sun's pay wall, this means that it is likely that the whole industry may finally come to a consensus on this important issue.

In the past, pay walls have been seen as an important way for traditional print companies to utilise digital media, whilst still not surrendering charging a premium for their content. Whilst the demise of newspapers has been significant, the internet has not signalled the death knell that many expected, with many still willing to buy print editions for a concise collection of the news. However, for many of these organisations, print sales are not enough, and internet revenues are a crucial part of their income, as well as attracting new customers.

The removal of the pay wall by Rebekah Brooks at The Sun finally reflects the company facing up to the fact it cannot treat publishing digital content as it can offline content. This is for two reasons.

Firstly, the competition is more intense online. Papers are competing with native online news platforms, who publish more content, more frequently, that better reflects the ability to target niches with tailored information. The boundaries of economies of scale that have led to profitability in the past have been removed, and the low cost of a blog means that newspapers suddenly are having to compete in a way they have not had to before. The likes of Huffington Post and Buzzfeed embrace a format that would have no place in print, but are suited to the internet generation.

Secondly, the customer needs are so crucially different. An internet consumer usually wants a quicker reflection of interesting news, with a greater focus on personal experiences and humour. Entertainment is arguably as important as being informed, whereas newspapers are much more heavily weighted towards the latter. Changing the tone of online content has been a particular issue to grapple with, many organisations bringing in 'digital natives' to help deal with this transition.

So, what is the answer to newspapers fitting into this digital landscape? Their competitive advantage is the quality of their content, their ability to present the 'important' news through the noise that the internet can often generate, and their ability to be first to breaking news. They need to carve out a segment in the market for which they can sit in this area.

To monetize this output fully, a whole new business model needs to be embraced by the company. Chris Anderson (Wired, 2008), a popular author on embracing digital media, talks about the freemium model, using numerous innovative methods to generate income off the back of the traffic created by unique content.This model is becoming more prominent as the expectations of free media increase.

However, this runs adverse to the business model still existing from the print days of media. The challenge for editors and directors is combining and merging the two purposes, whilst maintaining the quality of the content. Striking a balance between these models to leverage the brilliant news and analysis newspapers provide will be crucial to their continued survival.