Today, there was very bad news from one of the biggest
publishers of weekly and monthly magazines in The Netherlands, the Finnish
company Sanoma.
More than 500 personnel members of this company have been
sacked today and many more freelance writers, editors and photographers will
lose a valuable source of income too.
And to make things even worse, a staggering 32 magazine titles
have been nominated to be either sold to another party or to be completely abolished
in 2014/2015. Perhaps counter-intuitively, these 32 magazines were not obscure
titles and small editions, like ‘Dutch Ikebana Magazine’, ‘Young Scientist’ or ‘Cars
for Doctors’.
To the contrary, among the titles to be abolished were the Dutch
Playboy, ‘Kijk’ magazine (i.e. ‘Look’; an old and very interesting popular-scientific
magazine, which I almost spelled as a child) and other renowned men’s magazines,
like Nieuwe Revu and Panorama: magazines that offered a once unbeatable
combination of barely dressed ladies and interesting stories upon crime and popular
culture.
Het Financieele Dagblad wrote the following snippets about
the events at Sanoma:
The Finnish media
corporation scraps 500 of the 1600 jobs at its publisher’s branch in The Netherlands.
The sheer existance of 32 magazines is uncertain.
The company will focus
on 17 magazine titles. Most of these titles are women’s and housing magazines.
Of the men’s magazines only Autoweek will remain.
The magazine branch entered
into the problem zone, as a consequence of dropping advert yields and smaller editions.
The yields from the subscription sales dropped by 6% in the first nine months
of 2013. Store sales dropped by 10%, and the advert revenues in the printing
branch even dropped by 25%, year on year.
Sanoma announced the
reorganization during the publication of its quarterly data. The corporation
suffered a net loss of € 265.5 mln,
as a consequence of €268 mln in depreciations on the Dutch activities. The total
revenues dropped by 5% to €568 mln, while the Dutch revenues dropped with 5.1%
to € 164,7 mln.
This is just another nail in the coffin of both online and ‘dead
tree’ publishers, as they are lovingly called: formerly very succesful
publishers of online and paper magazines and newspapers, who suddenly saw their
business models vanish into thin air and now cling onto life by the skin of
their teeth.
Their business models have suffered enormously, due to the fact that:
- Soft-erotic magazines like Playboy, Penthouse and Hustler have become almost totally obsolete, as every man can enter into a mega-ton of free x-rated stuff in just a few mouseclicks, while being in the privacy of his home;
- The celebrity skin in those magazines – formerly a huge motivation for youngsters and older men to buy them – can also be found nude online within just a few mouseclicks; sometimes even starring in their own leaked x-rated videos;
- Most interviews-with-the-stars in paper magazines have been published online, even before they could be printed;
- The ‘notorious crime’ stories, which formerly attracted many readers of paper magazines, can also be found on the net, at specialized websites;
- A zillion bloggers – including ‘yours truly’ – supply worldwide readers with tons and tons of free information and interesting stuff, about almost any subject there is in the world and at an often surprisingly high quality;
- Almost all newspapers and magazines print 90% of their news online, but yet failed blatantly in finding a way for making money with it, outside online adverts and a (mostly unsuccessful) paywall;
- Consequently, less and less people buy a subscription to a daily newspaper or a weekly/monthly magazine on paper;
- The market for printed and online adverts seems to suffer from an incurable anaemia, due to both the credit crisis, with its strongly diminished private consumption as a consequence, and the fact that people have been beaten to a jelly by all pop up and online adverts and ever since categorically refuse to click on anything at all.
The results are
devastating, as many weekly and monthly entertainment magazines – especially for
men – can’t keep their head above water anymore and simply disappear. Other magazines –
especially women’s magazines and specialty magazines – survive, but most of
them lead an anaemic existence, waiting for better times that will probably
never arrive.
And also for the daily newspapers, the consequences are dire
and almost impossible to turn around: due to the reduced subscription and single
sales revenues and also the dropping advert yields, these newspapers have to
shrink their editorial staff to the bare minimum in order to save expenses and
be more or less profitable.
The consequence is that the quality of their editorial work
and research – especially the specialized and labour-intensive, hands-on
research that once distinguished newspapers, like the New York Times and the Washington
Post – is dropping like a rock in water.
There are only fully-employed reporters and editors left for
the most important subjects (domestic and foreign affairs, sports, politics and
economy) and locations (The Hague, Brussels, Frankfurt, Washington/New York, London and
Paris).
All other news is gathered from freelancers, who are yet
willing to work for a ‘token’ fee and especially from the press agencies that
cover the local and global daily news (AP, Reuters, Bloomberg and ANP, to name
a few).
Therefore these newspapers become more and more dependent upon
the local and international press agencies for their daily news-supply, which
makes them less distinguishable in comparison with other newspapers that are suffering
from the same problems.
Consequently, almost the only items left for chief editors to
distinguish their newspaper from all other newspapers, are the columnists and
pundits, who are filling the opinion pages. Further, the weekend specials and
magazines are about the only chance left to make some extra money, as these
specials still attract specialized, high-brow advertisers, who seldomly make use
of online advertisements until now.
While all the aforementioned problems didn’t come unexpected
at all, how to solve them remains the €1 billion dollar question, which hardly
any newspaper has solved yet.
Today, I had an interesting discussion with one of my
Twitter-buddies, ‘Edwin’, concerning the question which model for content
payments could eventually be the winning one.
We both feel that the current world of ‘unlimited gratuitous
information’ is a world that will eventually kill all online newspapers and
magazines, as their shrinking editorial staffs run slowly, but surely dry from
money to do their work.
The problem is, however, that most people have become very reluctant
to pay for news and information, especially as almost all information can be
obtained for free through the internet. Edwin and I both agree that only the
best, most valuable and distinguishable news and information will be paid for,
unless… it is simple, quick and cheap to make those payments online.
When either the news in a paid-for online newspaper is just
ordinary, off-the-shelf news, which can be obtained everywhere for free, or the
payment method is too complicated or slow: just forget it to make money from a
paywall. People will simply skip your newspaper from their shortlists and get
their news from the numerous other online newspapers.
However, if you can offer unique, ‘home-made’ and very
valuable news, you still have a chance: especially when you combine paper and
online news in a package deal for people and companies.
Still, every potentially successful online payment method for
such a newspaper or online magazine should be quick, easy and cheap: payments through
a cellphone subscription or through continuous or one-off online direct debits
from one’s current account might have a good
chance.
However, complicated and/or expensive payment systems, like realtime
payments with credit cards, Paypal or interactive bank payments are doomed, in
my humble opinion. Too complicated, too expensive and too slow.
Still, I feel (and probably does Edwin too) that the real payment
method to “crack the paywall anxiety”, has not been invented yet.
Such a system won’t be one second too soon, as Sanoma proved
today!
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