The thing about innovation is that people are inherently resistant to change. That’s never been truer than in the newspaper industry. And, I mean, who could blame them? For decades newspapers were raking in such enormous profits it was literally like printing money. Pun intended.
Nobody in that position wants the gravy train to end. So, even when the gravy train was slowing down, many people in the industry were still in denial. “Oh, it’s just a phase. It’ll pick back up.” Instead, the patient has been hemorrhaging for quite a while now.
Subscriptions and advertising have been slowly dying off over the past few years. This has been the business model since the beginning, so looking beyond that business model that had been such a cash cow has been hard to let go of.
Since the Internet was becoming more of a place where people got their news, it would seem to make sense to just take the print version and put it online, then sell subscriptions and advertising there. But that was easier said than done. The public was now used to free content and having access to it 24/7.
I recently delivered an innovation keynote speech to 700 executives at the Mega Conference on the future of newspapers and learned quite a lot about an industry that seemed to have a simple and very effective business model. When the old business model isn’t working anymore, it’s time to start innovating. Time to look for new markets and new ways of doing business if the industry is to survive. But innovation in the newspaper industry has been incredibly slow.
The newspapers that are doing well are great at local coverage. They can do local better than anyone. Local people, local places and local events. Small and mid-sized businesses represent the largest growth opportunity in local markets. But traditional advertising solutions aren’t working for them.
Not all newspapers are suffering. Many are actually making money, especially the small town newspapers who have the only game in town. TV host Maury Povich, found out when he bought the Montana newspaper the Flathead Beacon, that it would take more than just putting out a print version of a newspaper to generate income. After 9 years he says he is almost breaking even on it. But he has also purchased a local glossy magazine and a marketing firm, which he has integrated with the newspaper. This is the kind of creative thinking newspapers have to have in order to stay in business and ahead of their competition.
Another way newspapers have expanded is by innovating within their competitive advantage. They have two major things that could be capitalized on… their brand name and audience.
Building a brand name takes time and a newspaper that has been around the community long enough to develop that brand name has something of value. People like them and trust them.
Another asset they have is their audience. Again, it takes time to build an audience, and that audience is worth money. One thing many newspapers are doing is to put on events those audiences want to attend.
Events seemed to be a buzz that permeated throughout the conference, and is starting to be seen as a new, additional revenue stream. Those small businesses who used to just stick an ad in the newspaper now want to connect with their own audiences in a more intimate and personal way. Event sponsorship is one way to do that. Small business sponsorship is an untapped area for newspapers.
Many small businesses don’t even know about sponsorship. In my experience, small businesses often think that they have to invest millions of dollars to play in that game. But a small business could sponsor a local event for very little. And their return on investment is good because they are reaching a very targeted audience.
Disruption is occurring in all industries. The newspaper industry has had the same business model for many years. And that’s worked just fine… until now. If you don’t learn how to innovate within your industry, you risk being made irrelevant. But the good news for the newspaper industry is that opportunities are everywhere. It just takes getting out of your comfort zone to find them.