No Sooner Does ftm Suggest That A Newspaper’s Web Strategy Should Support Print, Not Supplant It, Then Along Comes An Internet Wizard Who Says Print Should Turn Off Its Lights Today And Tomorrow Become All Web

Philip M. Stone October 30, 2008

A couple of days back this column suggested that newspapers need to change their web strategy – stop giving everything away for free – and instead the newspaper’s web site should be dedicated to supporting the print product for that’s still where the big money is. But now along comes an Internet pioneer who says print actually should quit today and become all web tomorrow. Who’s right?

This column argued that while the Internet may have all the bells and whistles of a multimedia culture the one thing it does not bring to newspapers is big revenue. Newspapers still make more than 90% of their revenues from print, and the Web advertising-supported business model has been around for long enough now to prove that as a financial model it doesn’t work. The Internet may be great for readers but it’s rotten for print publishers.

So we suggested a Wall Street Journal type of strategy in which the web site supports the print model buy putting under subscription lock and key a newspaper’s premium news – its local coverage.

But now comes Marc Andreesen, Netscape founder and well-respected Internet wizard, who says newspapers should give up the ghost of print right away and become an all-Internet product.  In an interview in Portfolio he said that if he was running the New York Times he would, “Shut off the print edition right now.” He says newspapers need to start playing offense instead of defense and aggressively attack the Internet playing field.

“The financial markets have discounted forward to the terminal conclusion for newspapers, which is basically bankruptcy. So at this point, if you’re one of these major newspapers and you shut off the printing press, your stock price would probably go up, despite the fact that you would lose 90% of your revenue. Then you play offense. And guess what? You’re an Internet company.”

Well, we agree on one point – that print need to start playing offense. But our definition of offense is not print capitulation; rather it is to harness the power of the Internet to support, rather than supplant, the print product. Andreesen’s view is to put all the eggs in the Internet basket and that there is enough advertising to go around to make newspaper web sites more profitable than what they are now earning under a print-web combo.

The feeling is that if the entire print organization was focused 100% on the Internet, then the advertisers would be found and higher profits would be made.

Unkind sceptics of Andreesen’s  philosophy would probably point out that Netscape came and went in 12 years – he certainly got very rich from it – but newspapers whether they be print or the web need policies that will ensure they last longer than 12 years,  and that they don’t exist just to make an owner very wealthy in a sell-out.

Newspapers make around 90% of their revenue from print. Ad rates between print and the Internet are so divergent that the basic rule of thumb says print earns anywhere from 20 to 100 times more per consumer than does a newspaper’s web site – a 2% circulation loss means there would need to be 40% more website users just for the revenue to stay even and we all know that just plain is not happening. 

True, the overheads for print are much higher – newsprint, ink, distribution costs and the like that just aren’t there for the Internet – but then again, the online advertising revenue is so much less than print. It is said that around 60% of print’s operating costs go on printing and distribution which is why so much cost-cutting has been focused on that part of the business. What’s unfortunate is all the cutting, too, in editorial for whether you’re in print or on the Web you still need to have that decent editorial product to draw eyeballs. 

The announcement this week that the Christian Science Monitor (CSM) was quitting the daily world and would become a weekly starting next April while putting far more emphasis on its web product seemed to have come as an absolute shock – perhaps a wakeup call -- to the American journalistic world. For here was proof positive that a daily print newspaper is giving up on print for the most part. It will produce a nice weekly with loads of good features but it going to rely upon the web now to get out its daily message.

The shock of that announcement, of course, is that people are now saying if the Christian Science Monitor does that then who is going to be next? Is that newspaper’s decision the beginning of the end for print? John Yemma, the Monitor’s editor, said he thought that most newspapers will go entirely digital in the next five years.

Countering that, Randy Bennett, the senior vice president for business development at the Newspaper Association of America, told Newsweek, “The focus may change. It may be a tighter product, and it may not be delivered seven days a week. But print still has a strong audience that likes it.”

But the CSM’s action brings what was pure theory before now into reality. And it’s a reality that makes print lovers shudder.