Tuesday, July 05, 2005

No barriers for regional newspapers

Escalators go up and down. But the escalator of a free internet site can only go down. That was the lesson which the daily newspaper BN/De Stem in The Netherlands learned over the past 10 month. Yesterday the editor-in-chief announced that it was going to remove all barriers from the site. It was no use to ask money for the site, he concluded. The revenues were small, the traffic to the site diminished and subscribers even cancelled their subscription. So the newspaper has to increase revenues from banners and advertisements. The sunny side is that advertising on internet is on the increase. It must have been a hard lesson.

These 10 months must have been a hard lesson. Should the staff of BN/De Stem have known better? In my view, they should have. The escalator of a free internet site only goes down. Besides, the staff should have known that a regional newspaper is not the Wall Street Journal. But lessons are hard to be learned.

Where can regional or even national newspapers make money? In 1995, when I was working for Wegener, there was an intern Beate Crombags who studied the opportunities for the newspaper industry. Eventually she wrote her thesis for the university and together we wrote together an internal report on newspaper models and an article on personal newspapers, which was published in a Dutch trade magazine. The internal report identified the following money sources:
- advertisements and banners;
- electronic version of the newspaper;
- alert/personal newspapers;
- archive;
- city guides;
- community sites following the free city models;
- internetsites based on specialities of the newspapers such as movies, books;
- auction sites based on classified ads.

In the meantime all of the models have been tried and not many have been a success.
- Banners and advertisements is a slowly growing sector, but still they do not pay for the sites.
- The electronic version of the newspaper has come around rather lately. They are like PDF papers. Once electronic paper comes around and is accepted this type of newspaper will replace the printed version. I predict that the change-over will start in 2015.
- Personal newspapers have not really been tries. In Belgium and the Netherlands there have been attempts to offer a personal newspaper made up from articles from all national newspapers and based on a personal profile. Only in Belgium it works and is paying its way. But such a model can only work in a small country.
- Archives have been not been a real source. Partly this is due to the newspapers themselves as they think that their customer only wants their newspaper information. Someone consulting the archive of a newspaper does not care whether it is the archive of a particular newspaper as long as he finds the information. So a special service like Reed Elseviers’ Nexus should be marketed by the newspapers.
- City guides. Wegener was in the right position to build city guides, but they did not really go for it and spent the money on other models.
- The community sites were a hot item in the late nineties. Internet had been introduced in The Netherlands with the model of the Digital City in Amsterdam. In 1996 Maurice de Hond got the board of Wegener to support his model of digital cities and it became a failure. Some million guilders further and a lot of internal hassle, the communities folded. Maurice de Hond had left already by that time for greater things, the incubator Newconomy.
- Specialty internet sites like movies and books have come about, usually in collaboration with other sites.
- It took a while before newspapers understood, that putting up classified ads was not good enough, but that internet sites were capable of transactions. So classified ads had to be turned into an auction site. PCM in The Netherlands participated in such a site, but this one folded within a year. De Telegraaf has now its Speurders, but they lost out on Marktplaats.nl, an auction site bought by eBay for 125 million euro.

I think that I should trace Beate Crombags and after 10 years we should start to map the lessons learned.

No comments: