June, 2006
If you thought traditional print journalism and broadband-delivered video don't mix, think again.
Major newspapers, which are confronting challenges brought on by new technology, changing consumer behavior, new competitors and impatient shareholders, have been beefing up their web sites and rolling out broadband video initiatives.
In an upcoming report that my firm is releasing, entitled "The Top 40 U.S. Newspapers and Broadband Video: Read All About It!", our detailed review of the web sites of the top 40 U.S. newspapers (as measured by weekday circulation) revealed that ALL but one now offer some type of broadband video.
In addition, the briefings we conducted for this report with nearly two dozen newspaper industry executives responsible for their web sites and/or broadband video initiatives, plus related industry vendors, clearly revealed the industry's recognition of broadband video as a strategic growth opportunity. The industry's early efforts with video reflect this.
The Challenges Facing Newspapers
Newspapers have a long, proud history and a track record of high-impact investigative journalism, helping expose and explain critical events to their readers. Their role in our open, democratic society is invaluable. Yet, newspapers are perceived by many to be dinosaurs of another age, as their time-fixed publication schedules, top-down, staid cultures and finger-blackening products are seemingly out of date in the on- demand, blog-crazed, digital media-driven world we now live in.
Newspapers have felt this disconnect through both long-term (and recently accelerating) circulation declines, particularly among younger audiences, and ferocious new competition for their traditional base of advertisers. In short, newspapers are on the wrong side of powerful macro trends permeating throughout our society.
This has led to much hand-wringing in the industry about what to do to reverse course. Our research into the industry showed that up until a few years ago skeptical editors and publishers thought they would weather the digital media storm, and did not see the need for bold steps. However, more recently, that point of view has given way to a new sense of urgency that the industry needs to act, and fast.
But the question of what exactly to do to re-energize themselves has remained murky. Some have cut costs by reducing newsroom headcount. These newspapers, often under attack by impatient shareholders, may be resigned to a future where newspapers can only succeed as shadows of their former selves. Certainly Knight Ridder's recent fate (an impending takeover and planned split-up by McClatchy), which was forced by a restive professional investor group, sent a strong message to industry executives: act now or get out of the way. Meanwhile, others have started free newspapers to appeal to younger audiences, invested aggressively in their web sites, and upgraded the look and feel of their papers to be more contemporary.
Broadband Video's Role
As those of you who have followed my previous newsletters and market intelligence know, I believe that broadband-delivered video is the most significant disruptive force in today's video distribution value chain. This is because broadband video offers an open distribution platform, allowing video content producers to bypass traditional gatekeepers (i.e. cable TV and direct broadcast satellite operators) and deliver their video directly to their intended audiences. This capability is already being exploited by dozens of traditional (e.g. ABC, MTV, MLB, Starz, etc.) and emerging (e.g. YouTube, TotalVid, Rocketboom, etc.) video content providers. This is sending shock waves though the entire video industry.
Another aspect of broadband's openness is that it allows established, non-video industries to stake a claim. Herein lies newspapers' big opportunity. Newspapers have many key strengths such as their newsgathering abilities, brand names, large affluent customer bases, web site traffic and regional reach. These provide a sound basis to launch broadband video.
You may ask, "what is so special about video" and "why is the potential so significant?" I think there are at least three reasons:
Getting the Facts
The challenge for newspapers to transform themselves into high-energy, video-driven enterprises is not insignificant. Our upcoming report details five specific strategic and tactical recommendations that newspapers need to pursue to succeed. Importantly, it advocates leveraging newspapers' core strengths, not abandoning them. It also argues that newspapers must be clever about what video they create and use and how it is integrated into their user experiences, to ensure not merely becoming clones of local broadcast channels' online efforts.
In addition, the report devotes considerable attention to revealing newspapers' current broadband video initiatives. Best practices innovation in broadband video is happening throughout the industry, from large newspapers such as the New York Times and the Wall Street Journal, to smaller players in the top 40, such as the Ft. Lauderdale Sun-Sentinel and the Kansas City Star, to those outside the top 40, such as the Naples Daily News and the Virginian-Pilot.
The report quantitatively examines how many newspapers are creating their own video vs. using third party video (e.g. news video services or partnerships with local broadcasters). For those newspapers creating their own video, the report analyzes the focus of their efforts — news, features or both, plus which ones are using advertising to support their video, what kind of advertising is being used (e.g. pre-roll video or display ads), and a range of other metrics.
As with our past reports, all of the report's points are illustrated with screen shots and examples. In addition, the report presents the insights we gained through our industry briefings, opening a window into current industry thinking and strategies. While it is still early in newspapers' push into broadband video, it was very clear to us that industry leaders recognize its potential and are rapidly working to exploit it.
Summing Up
The research process we have undertaken on the newspaper industry and their broadband video initiatives provides another perspective on how dynamic the broadband video industry already is, and is poised to become. Newspapers have as good a shot as anyone of success. For all the players in the broadband video market — broadband ISPs, cable and broadcast networks, portals, online publishers and technology vendors — newspapers are definitely worth knowing more about.
To learn more about this report, join me for a complimentary webcast, underwritten by Voxant, on Thursday, July 20th, at 1pm ET / 10 am PT.
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