Looking out the telescope

What’s over the horizon

 Market trends
• Consumption
• Revenue
• Competition
• Brand
• Service
• Culture
Consumption
• News consumption
– people who enjoy keeping up with the news down from 54%
in 95 to 45 % in 2000 (pew:us)
– watch TV news regularly: 1993 =77%, 2000 = 56%
– enjoy keeping up with the news
• under 30 = 31%, over 50 = 57%
• graduate 54 %, non grad 41 %
– read a newspaper yesterday
• under 30 = 29 %, over 65 = 63 %

• Driven by age and education

Consumption
• Readership
– Weekday readers: 1970 = 77%, 2000 = 55% (US:
Simmons/Scarborough)
– Young are not reading newspapers as much
• in 1979, 61% of 25 to 34 year olds read papers, in 1999
only 44% read papers
• readership drops with age
• if same trends continue only 33% of the 25 to 34 year
cohort will read when they are 55.
• this is less half the number of 55+ who read newspapers
now
– worse for Gen Y
Demand for news is waning and the young are not getting the
habit
Consumption
• Fragmentation
Regular users of News
– Diversity of medias A lot Some Not
to get news Network news
%
47
%
22
%
7
– Newspapers at top of Local TV news 71 49 15
Cable 67 47 16
useage, but not Internet 53 34 26
Newspaper 75 56 33
dominant Mags 18 9 3
– Newspapers have to Pew 2000
change the metric to
useage eg RBS
Consumption

• Two big cohorts Boomers and Gen Y

• Boomers
– Boomers are living longer
– Median age is climbing rapidly and will be above 40 in 2020,
compared with 27 in 1970 (US Census)
– 20 % of population will be over 65 from 2010
– This will be BB’s decade, high income and fewer
dependencies
– Buy services and experiences

– Follow them to their grave

Consumption
• Gen Y
– Tidal wave
– Now are 11 % of population
– In 2010 will be 30 %, same size as boomers
– Buy goods
– Multi media, multi task, brand conscious, optimistic

– Gold mine for which ever media channel can get them
– Can we serve two menus from the same restaurant?
Revenue
• Consolidation
• Consolidation of buyers
– top 6 agencies have doubled market share
• Consolidation of industry
• Globalisation
– Half ad spend is now on global campaigns

• Balance of power has shifted against media

Revenue
• Fragmentation of delivery channels
– Multiplicity of media all vying for share
– Digital media able to minimise wastage
– Endless inventory
– Minimal barriers of entry

• Supply side boom is pushing price down

• Below the line growth
– Double the growth of advertising
– Not accessed by most media
• As demand softens
Revenue
• Cream skimming
– Technology advances allow high end niche publications to
steal categories eg real estate
– New functionality allows new operators to compete and
steal market share eg employment

• Mass market mindset is killing us

Competition
• Globalisation
• Fragmentation due to technology
• Rapid movement into niche markets
• Commoditisation of news
• Network and interactive communications driving new
consumer paradigm
• Low inflation
Brand
• Only six US newspapers have a strong brand (US:
readership institute)
• Reflects lack of clear positioning
• Brand not aligned with commercial strategy
• Brand not reflecting consumer need and competitive
advantage
• Brand too often a brag box
Culture
• Reflect similar cultures to army and hospitals (US Readership
Institute)
– Inward
– Defensive
• Aggressively so in case of editorial
• Perfectionist/obsessive
– Silo mindset
– Inflexible and lack of innovation

– Across the board with managers only exception

Service
• As important as content for consumer satisfaction
(US: Readership Institute)
• More important to older readers
• Six factors are critical: Condition and completeness;
quality of paper, font , colour; When and how
delivered; accuracy of bill; cost and overall customer
service.

• Highly under rated by media

Conclusions
• Readership
– Less interested in news
– Not getting what they want
• Variable reader wants: monitoring, keep up,
water cooler and self improvement type content
• Community/local (people), lifestyle/go and do,
advertising and international and national
provided it is relevant are top categories
– Need new metric we can all aim at
Conclusions
• Readership (continued)
– Want easy to read and easy to find content
– Self promotion is critical
– Get their news elsewhere eg TV
– Is not relevant to their generation eg gen Y
Conclusions

• Revenue
– Fewer bigger players
– Caught in yield trap
– Supply boom
– Pricing power declining
– Key category under attack
– Inflation masked underlying trends
– Shift away from direct advertising
– Performance can be strongly affected
Conclusions
• Competition
• Big players are running commodity game
• Low returns on content
• Fragmentation is spawning new and highly flexible
competition
• Lack of positioning is death
Conclusions
• Brand under used and misused
– Brand has to be defined in terms of
consumer need and targeted at key
variable audience
– Positioning has to be strategic and
relevant to all parts of the business
Conclusions
• Culture highly dysfunctional
– Not currently able to make the journey
• Service highly underrated and
consistent with lack of consumer focus
Process
• Develop the market trends data
• Bring all groups of the business together
• Allow self discovery of need to change
• Allow synthesis of ideas of what to do
• Adopt a positioning and value statement which is relevant to
consumers, business and functional units and employees (common
aspirational goal)
• Agree what needs to be done to bridge the gap: critical success
factors for all departments
• Adopt a set of action plans and timetable
• Align performance targets of departments, sections and people
• Recruit and incent accordingly
The Challenge: To move us from a
mass market, inward, slow moving, risk adverse ,
price making newspaper company focussed at
boomer generation;

to a strategically positioned, consumer

driven, innovative, value based media
business, servicing our users with relevant
news and advertising.

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