How Online is Transforming the Newspaper Industry Tuesday, June 26, 2007 Penn Club, New York Ken Chandler, CEO, Chandler Media.

How Online is Transforming the Newspaper Industry

Tuesday, June 26, 2007Penn Club, New York

Ken Chandler, CEO, Chandler Media

Council Member Biography

Kenneth Chandler is the CEO of Chandler Media, a consultancy that provides communications strategy and media mentoring to senior executives. Mr. Chandler has experience on three continents and spent 30 years as a top editorial executive at Rupert Murdoch's News Corporation. He was Editor-in-Chief of the New York Post for six years and then became its publisher. He served twice as Editor of the Boston Herald. He was also Executive Producer of Fox TV's "A Current Affair" and a founding editor of Star Magazine. Mr. Chandler began his newspaper career in England, rising from trainee reporter on a weekly newspaper in London to working as a copy editor on Fleet Street's major dailies. It was there he joined the Murdoch organization an an editor at The Sun, the largest selling English-language daily newspaper in the world. Mr. Chandler also spent 15 months in Singapore helping launch an English-language daily newspaper. There, he supervised a staff of Chinese, Malay and Indian journalists.

Table of Contents

► Present and future trends related to the newspaper business

► The implication of the internet and declining readership

► Consumption Patterns (viewing habits, competition for eyeballs, and changing business models)

► Newspaper and online advertising trends

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40 years in the newspaper business! 1965: Stratford Express, London, 1970: Singapore Herald 1972: Freelance on Fleet Street 1974: Launche Star Magazine, New York. 1978: Joined N.Y. Post as Managing

Editor 1986: Editor-in-Chief, Boston Herald 1993: Executive Producer, A Current

Affair

40 years in the newspaper business! 1993: Editor-in-Chief N.Y. Post 1999: Publisher, N.Y. Post 2002: Editor-in-Chief, Herald Media 2006: Chandler Media

40 years of turmoil

EVENING NEWSPAPERS BITE THE DUST

• More TV viewing, less time reading newspapers

• Expansion of local TV newscasts• More people commuting by car• Sports Radio, ESPN bring instant results• Stock prices available by computer• Metro traffic congestion hampers efficient P.M.

delivery

40 years of turmoil

. . . And then:

ALONG COMES THE INTERNET!

. . . And just when you thought it couldn’t get worse:

BROADBAND!

40 years of turmoil

Just the facts, m’am

Newspaper circulation plunges for third year in a row

Decline of 7-day a week subscribers Competition from free newspapers Growth of online news consumption

Just the facts, m’am

Biggest losses in large Metro markets*

More internet users and broadband penetration Competition from suburban dailies Free dailies on mass transit The New York Times factor

Data: The Poynter Institute

It’s all downhill

The decline began in the 1990’s with the death of Evening newspapers . . .

. . . And worsened with the advent of the internet and broadband

Why people stopped reading newspapers Don’t have time 23% Inconvenient 10% Biased/opinionated 8% Don’t like to read 7% Inconvenient to get 6% Boring 6% Cost/not free 5% Causes clutter 5%

Data: The Poynter Institute

But wait, there’s some good news!

There are 1,500 newspapers published every day in the U.S.

• Combined circulation of more than 53 million

• Each copy is read by an average of 2.3 people

• Data: Newspaper Association of America

But wait, there’s some good news!

Daily newspapers still reach a majority of adults in the U.S. every day

• Daily readership 51%

Over five days 76%

Data: Newspaper Association of America

Sunday readership 58%

Over four Sundays 72%

Sunday circulation totals 55.2 million Each copy on Sunday read by 2.5 people

Data: Newspaper Association of America

More good news!

Some young people still read newspapers Two-thirds of Americans aged 18 – 34

are at least once-a-week readers

Only 35% of ages 18 – 24 look at a paper each week

Putting out the best spin

HOW TO BEST MEASURE NEWSPAPER SALES AND READERSHIP?

Traditional method: The number of copies sold each day

Putting out the best spin

THE NEW METHOD?

The number of readers for each issue, PLUS

Unduplicated audience for specialty niche publications, PLUS

Unduplicated readership of newspapers and their websites

Other options

WHAT ABOUT

E-mail alerts RSS Podcasting Future technologies?

How do you count them?

The future

Has the business model for newspapers failed?

Is the business in an irreversible decline? Or an emerging business in transition?

Two ways of looking at it

“Newspapers are in a period of protracted decline,” Warren Buffet, May, 2006.

“Newspapers can’t cut their way to the future,” Jeff Johnson, former publisher, L.A. Times.

Don’t tell that to Rupert Murdoch!

• Poised to win control of the Wall Street Journal• How he’ll make the Journal an international

franchise – and a better paper!• He understands the need to invest long-term

in content• He uses huge profits from his brash tabloids to

subsidize serious papers like the Times of London and The Australian

• He’s not beholden to Wall St.

The next economic model

News organizations becoming niche players

It’s what they chose to cover, not how they cover it

Major metro dailies cut back foreign bureaus, focus on local, local, local!

Newspapers have diminished ambitions Journalism’s biggest challenge: Shrinking

resources

The next economic model

FOUR PILLARS OF REVENUE ARE CRUMBLING

Circulation Classifieds Traditional department stores Leverage to raise rates aggressively

every year

Cutting costs

Newspapers struggle to cut costs and the newsroom is always the easiest target, but

EXCESSIVE NEWSROOM CUTS:

Lessen reader appeal and circulation Value to advertisers

Meet the enemy

THE BIGGEST PREDATORS FOR AD $$

Google Craigslist

Meet the enemy

. . . AND FOR READERS:

Wikipedia MySpace YouTube

Back to the Future

Wall St. values newspapers less than private investors

Does ownership by public corporations still work?

Do the demands of Wall St conflict with the demands of management?

Are private owners the future of just vanity play?

Ending with optimism

Why newspapers WILL survive

The need for original contentWhich owners will be most successful