Harte-Hanks was ahead of its time. And the more data that I see on newspaper readership the more they look pretty smart.
Hitting newspaper publishers with yet another piece of negative data about their future health might seem like piling on at this point. But when the data is so compelling that it has strategic implications it needs to be given broad circulation (so to speak).
I don't know how many of you are aware of the Grade the News Web site, a project of the San Jose State University's School of Journalism and Mass Communication. I just discovered it myself. It describes itself as the Consumer Reports for news outlets in the San Francisco Bay Area. Earlier this month journalism professor and former Knight-Ridder journalist Phil Meyer penned (if that can be used anymore) a column headlined “Newspapers can't maintain monopoly profits because they've lost their monopolies.” In it he voiced skepticism that attracting “young readers” is a viable resuscitation strategy for traditional newspapers. His compelling evidence went beyond the usual table that shows that 20-somethings don’t read the newspaper. No, Prof. Meyer, the creator of the term and author of the landmark book Precision Journalism makes an even more compelling case with this graph:
It's a fine example of a picture having value of a thousand words. But just to leave nothing to chance, the import of the data is that the pre-radio generation had and maintains a higher level of newspaper readership than the pre-television generation, which in turn is higher than the boomers who were raised with TV and radio. And the post-boomers, having had VCRs, DVDs, gazillion channel cable and, of course, the Internet, distracted by more media choices than ever, not surprisingly has the least need for-- or at least the least time for-- traditional newspapers.
I'm not sure where Phil got this data, but if there's anyone I trust to have accurate information it would be the author of Precision Journalism.
Meyer does see a sliver of a silver lining, reminding us that "new media never completely replaces old media. They just drive the old media into more specialized niches. Newspapers will survive, but in radically different form, many less than daily." Certainly true for the intermediate future. But it will also eventually result in changes of ownership, as some of today's owners decide they don't want to be in the lower volume, specialized niche business.
The prototype may have been the Harte-Hanks newspaper group, headed by a smart CEO named Robert Marbut. About 10 years ago they decided that the value of their newspapers was high and the future was dull, so they sold their papers-- mostly in Texas-- and redeployed assets into the direct mail business, which indeed has been more robust than newspapers. Direct mail has actually increased its share of advertising expenditures as newspaper share continue to fall. Today more advertising dollars are spent on direct mail than in newspapers. Harte-Hanks may not have foreseen the impact of the Internet when it made its strategic decisions, but it was aware of the move to digital and it understood the long term implications for newspapers. While Harte-Hanks still uses print, it is essentially a data base business.
One scenario is that down the road we may well see a handful of companies that will specialize in smaller, higher priced printed dailies and less than dailies, while many of today's publishers, like Harte-Hanks before them, will morph into something else in the ever-more broadly defined media arena.
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