Aug
8
The Strange Death of the British Regional Press
Filed Under Blog, Industry Analysis, internet, mobile content, news media, online advertising, Publishing, social media, Uncategorized, Workflow | Leave a Comment
“Well, they still make a profit”, said my friend. And indeed they do, but at what a cost! The few daily evening papers are now weeklies, and the weeklies are going free. Advertising and circulation are in monotonous annual retreat, and we were debating whether automated journalism, in the form of Narrative Science or Automated Insights, could be deployed to shave even further cost off these pared and scraped budgets. And would even that save them from joining Yellow Pages and telephone directories in the pulp recycling mill of history? Three hundred years almost exactly from the launch of the Daily Courant, I find this tinged with sadness… and anger at the gross mismanagement that speeded the demise.
An erstwhile colleague who does the numbers for a living provides this analysis of Enterprise Value:
Regional Press players (largest only, all in pounds sterling)
Trinity Mirror 308 m
Johnston Press 295 m
LocalMedia 150-200 m (based on current earnings)
Newsquest 400 m
In other words, an industry value of around 1.2 billion. Then he looked at the major classifieds players in the key regional press markets, and at their Enterprise Values:
Rightmove (homes) 3.36 bn
AutoTrader (cars) 3.86 bn
Total Jobs (now part of Axel Springer, so this is an educated guess) 800 m
In other words, the 7.9 billion pounds represented by these services is 6.5 X the regional press. And you can complain that we have left out Tindle or that the second or third level online services are not included, but it does not fundamentally alter the unarguable conclusion: the regional press has gone down the pan.
Perhaps that was inevitable. The tide of history. They did not see it coming. But the fact is that they did see it coming, they took very appropriate action, and still could not manage the outcomes. In 1995 my then company, EPS, was retained to come up with suggested solutions. This led to a project called AdHunter being hosted in our offices. The idea was to bring together online all of the classifieds from some 800 regional papers, comprizing 80% of UK regional press outlets. Within three years we had cracked the upload problems, built a database, and, with a brilliant management team, the project was launched on 13 October 1999, under its new title of Fish4 (Fish4homes etc). Within a year it was at least number 2 in these key markets, and probably the leading jobs site. I was still closely involved at this stage as Chairman.
Now stop history there for a moment, in the year 2000. If, as my analyst friend indicates, the regional press players, who had all invested both capital and content in this activity, had continued along this track for another fifteen years they would have had an asset, even if it was No 2 in these markets, worth around 75% of 6.5 billion. (And, with commiserations, he reminds me that the listing, when it came, would have yielded the Chairman 60 million!) So why did the newspaper companies fail to follow up this initial breakthrough and create a self-sustaining future online – or even turn into Schibsted or Axel Springer? Basically, for a few simple reasons which were not obvious at the time. They did not know who their customers were, they did not know anything about the behaviour of their readers/users beyond the fact of purchase. And they had no conception of who the competitors were, insisting to the bitter end that other newspapers, and especially their co-investors, were the old and ever present enemy.
This latter characteristic became the bane of my life as Chairman, and after five years I was glad to escape the board room wrangles about who was doing better than whom from the original deal. Investment decisions became trapped in jealous debate, with the farce factor re-inforced by the fact that all of these newspapers were local monopolies, fiercely guarded but without, except in three small towns, more than one newspaper in each community. But the obsession was the idea that a rival group might use the service to grow at the expense of the others: the threat of AutoTrader moving out of print, or their estate agent customers forming their own service, or of Monster eating their breakfast, seemed to be of no consequence alongside this fear.
And they did hate their customers. Estate agents and used car dealers and the jobless did owe them a living. I recall vividly one regional managerial grandee, when it was suggested that we might secure our positioning in the car market by distributing free software for managing inventory and uploading selected vehicles for sale to our site and the local newspaper, expostulating that all car dealers were crooks and criminals, and he had no intention of sanctioning investment to subsidize their nefarious practices. Estate agents were equally wicked, so it was a real shock that a service derived from the market – how come estate agents could collaborate and newspapers couldn’t? – eventually supplanted them. And they saw absolutely no benefit in the fact that an online searcher could search regionally or nationally to great advantage, and that selling this advantage to advertisers was worth a premium.
Only one “manager” of that period now remains in office, and that is the Chairman of DMGT, Jonathan Harmsworth, who inherited his father’s position during this period . He has arguably learnt the lesson, since he sold the group’s regional holdings and has concentrated his company in B2B data services markets. But I often think of Jonathan Turpin and his brilliant management team at Fish4, who were denied the opportunity to shine by obscurantist and blinkered investors. And of an industry which never did accomplish the re-invention of “local” in the network, a task which still remains to be achieved in a smartphone world. I am often told that it is the BBC who destroyed the regional press, or the advertisers, or even the government. But the truth is simpler: management climbed inside the bunker and pulled the roof in on their own heads.
Jun
22
After the Web was Over
Filed Under B2B, Big Data, Blog, eBook, Industry Analysis, internet, mobile content, online advertising, Publishing, Search, semantic web, social media, Uncategorized, Workflow | 2 Comments
Please evaluate the following three statements: There is no Advertising marketplace on the Internet; Print will be a hobby for collectors only within your lifetime; The Web is the next and fastest casualty of tech disruption. Last year, given my ever optimistic approach to these matters, I would have wagered that the first two were certainly true in the medium to long term, but that the third was fairly unlikely, and that there was every chance that the Web would grow and develop as a format, and be able to resist all challenges for a very long time. After all, print in the book format lasted for over five hundred years, and if it would be an act of near-certifiable madness to try to create a print-only book publisher today, the fact that you can now throw off digitally-derived printed books from the print on demand segment of a digital process, and price it as if it came out of a long print run of yesteryear, means that having print remains an option for those who like serial reading with restricted cross-referencing.
But the Web? The wonderful, flexible Web? In some ways we have still only just grasped its potential. It was no fault of Tim Berners-Lee that eCommerce jumped aboard his good intentions for linking scientific research reporting. What they created, a shopping mall bigger than Edmonton, Canada, was a restoration of the shopper-as-hunter ethos of primitive man, and by making all goods findable, may have destroyed advertising as we knew it in the disaggregated world. What Berners-Lee intended for science has come to pass, though a combination of the residual controls of private sector publishing, the need for metadata and ranking above content, and the migration of scholarly communication into the blogosphere and twittersphere may be re-positioning the importance of URL-based connectivity.
No, its surely unthinkable. After all, we have struggled so hard to make the Web work. Back in the 1990s, I was chief stoker on many a crew determined to shovel everything that we had ever created or archived in print into the massive maw of the Web Moloch. It took over a decade to discover that creating things for the Web was better, that ex-print material could be a liability, and that digital-first meant, amongst other things, optimizing content design in favour of formats that echoed the way people were likely to use them on a screen. Surely all these hard-earned advances cannot be in jeopardy so soon? Some of us had just fancied that they had cracked it, after all!
And some have only just learned that Web and Internet are not the same things at all. While the world is committed to the cats cradle of private and public networks globally which carry standard format data in an Internet context, because here the IP protocol acts as a standard that locks them in, and change involves everyone changing at once, this is far from true when it comes to the constructions that sit on top of the network. They can change whenever enough people want them to change and a groundswell for change emerges. And having recently returned from Singapore, and then New York, I feel the groundswell more powerfully than I did last year. And this is not about WiFi and its not about the total engagement of mobile networks in the world we are building. It is all about how and why and where we carry our massive computing power around with us. I am typing this on an iPad Air, which is a powerful machine. Next to it stands a laptop which was as powerful as my original iPad of three years ago. Either of them could have run the Eurolex service of 1985, where I and my colleagues were able to distribute the case law and statutes of Great Britain (450 million words in secular terms!) to some 1500 law practices. These changes – Moores Law, nanotechnology, the Cloud – increase in impact. Are they the foundations of Web disruption?
Or do those lie elsewhere – in the increasing impatience of end users seeking answers, gratification, solutions? Sir Tim was catering for researchers, for whom enquiry process was a way of life. In the speeded up world of 25 years later, “solutioning” is moving away from enquiry and into the realm of prefabrication. For very many users and usages, the answer is in the App. No, I don’t want to search on search engines – they produce options, not answers. Give me the App. In a bar in Singapore, was I as naked as I felt – the only one without a smartphone in front of him, earnestly consulting a page of App choices? In the new Whitney Museum in New York, I was certainly the only person looking at Andrew Wyeth or Edwin Hopper with a (foreign) naked eye. When the machines in those young hands become as powerful as today’s portable devices – and there is nothing more certain than the fact that they will, time and screen size will dictate a major change in modality. We shall all be App publishers then.
But perhaps not publishers of Apps as we now know them. Think for a start that these Apps will have to be solutions engines. They will need to customize to user practice. They will need Cloud support for memory and computation. They will need to be up to date at all times. They will need to be fully responsive to the IoT environment, so capable of acquiring fresh data from us and our travels. They will be connected, and while I am sure that I do not yet know fully what “deep linking” means in this context, the great advances of the Web in knowledge connectivity will surely not go away along with the static, horizontal presentation that we shall come to see the Web as having entailed. Apps may be tokens for shared, community experiences, or solitary voyages that create shareable experiences. Above all, though, I would wager that in this phase we do cross a last frontier. While we provide the shell, the storage and some algorithms, the reader/user populates it and shares it, becoming in every sense the “publisher” in the process.
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