How SA newspapers should ride the storm

GUY BERGER: CONVERSE May 28 2009 06:00

A perfect storm of coinciding crises is killing some US newspapers and hurting many others, and the people within the South African press are getting nervous.

It's right that they should. But our pre-broadband era provides some breathing space to avoid a similar fate. It depends on how we use the period.

The greatest disasters in the US press have been triggered by the collapse of bad business models. It was these which made titles like the Los Angeles Times and Philadelphia Enquirer especially vulnerable to the recession.

Their problems date back to times of too-easy money, where newspaper owners borrowed piles of cash against their share prices and embarked on strings of acquisitions or share buy-backs. The New York Times reportedly owes $1-billion.

With stock market values down, repayment charges to banks have risen, and bankruptcies been the result.

At the same time, the recession has severely reduced advertising so revenues are lower.

Adding to the calamity is the rise of broadband internet connectivity in the US. It has meant there's an ever-expanding cornucopia of content that competes for newspaper readers’ time.

And the self-same content proliferation also competes for advertisers who formerly focussed on newspaper readers.

Within this mix, is also the growing trend of internet users spending time on social networks -- which destinations then offer advertisers an audience that is relatively stable Contrast that proposition to erratic search-engine traffic which comes to online newspapers on a once-basis off.

Compounding the picture is the fact that search-engine linked advertising often offers advertisers better value for money when compared to the newspaper model of incidental exposure.

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In short, coinciding with lightening strikes of financial pressures, the US press is being buffeted by gusts generated by cheap and powerful internet access made mainstream.

South African newspapers haven’t had similar bad business models, and are unlikely to try them. They are also not exposed (yet) to really bad cuts in advertising (excepting property and motoring).

And of course, internet access levels are not likely to render print redundant in South Africa any time soon.

But no one here is feeling complacent. Many newspapers are already battening down centralising sub-editing across titles and merging congruent content types (like business news). And there are job cuts.

Depending on your perspective, the industry is wisely preparing for a worsening economy or cynically capitalising on the possibility of one.

But the real issue is whether their actions are putting the press on a footing for the future. The imperative is fitness for transition to a time when South Africa does enjoy ubiquitous internet (on desktop computers or cellphones).

So it's one thing to be implementing greater economies and making the papers more lean and mean. But it's another thing to answer the following questions:

Are cost-savings being made at the expense of the core product i.e. are they damaging the quality required to attract a given audience? If so, that’s a short-term logic leading in one direction only: a downward spiral, even if and when the economy recovers.

Are gains in productivity (in terms of output per journalist) related to more stories being produced per employee? Or are there steps to raise productivity in terms of quality?

To illustrate this: must a smaller team of reporters or sub-editors now superficially process a greater number of stories to keep volumes up? Or, instead of the newsroom chasing that previous total, is it understood that fewer stories get done and done well (including in more formats and greater depth).

If staff cuts reduce the quantity and/or quality of journalism, is there a complementary strategy to draw in high-quality user-generated content? And, if so, is this a cynical and exploitative exercise, or is it integral to re-visioning the nature of the newspaper in the era of Web 2.0?

Further, if there are going to be gaps, is there a vision of allying with foundations and sponsors so as to fill them? For instance, finding ways to maintain environmental coverage by means of paid-for content sections which nevertheless retain their integrity.

Will new-found savings go into profits, or be put into developing new platforms and revenue streams? And will there be room for the experimentation that’s needed when there’s no tried-and-tested business model?

Reporters may increasingly also have to add to their jobs the work of taking photos, writing headlines for Twitter and RSS, as well as doing a blog. But will they be trained? Will there be recognition of primary strengths as well as of the best mix for telling a particular story (which might primarily be via old-fashioned print).

Will newspaper groups continue to operate at existing levels of collaboration or will they, for instance, develop joint approaches to cellphone companies or to google.co.za?

South Africa’s press needs to respond to today’s challenges in a manner that is also strategic and forward-looking. Operating more cheaply is not something to be sniffed at in the current climate. But on its own, it certainly won’t guarantee viability in the longer-term.

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How SA newspapers should ride the storm

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