free press

The Uncertain Future of Free Dailies

There are signs. Not necessarily good ones. At ten in the morning in Paris, you still find piles of free dailies at almost every distribution point. At four in the afternoon, in the business district, outside one of the busiest subway stations, unopened stacks of copies of Metro lay soaked by the winter rain. Two years ago, subway and commuter trains were filled with people reading a free daily. Now, readership has dropped dramatically. In 2002-2005, to make sure the morning daily was there when its intended target group walked by, the logistics team at 20 Minutes (the market leader) carefully adjusted the number of papers available at key locations using traffic analysis in 15 mins increments. Today, the oversupply is obvious.

What happened to the free dailies that once rocked the press market?

Before I go further, a bit of disclosure. I was 20 Minutes’ editor from 2001 to mid-2007; then, until December 2009, I went to work for Schibsted ASA, the Norwegian group that owns 50% of 20 Minutes.

The French free daily market is a strong one. Here are the main data (source: EPIQ/ Audipresse market research): total readership is 4.5m people (+0.4% from September 2009 to September 2010); this is approx. 9% of the French adult population in about 10-12 major cities.

1- 20 Minutes :………….. 2.7m (+2.2% Y/Y) ……Schibsted/Ouest-France
2-  Metro :      ……………. 2.4m  (-0.7%) …………Metro International
3- Direct Matin: …………..1.7m (+4.8%)……….  Bolloré Média
4- Direct Soir: …………….1.0m.(-5.4%) …………Bolloré Media

Financially speaking, these titles share an advertising market of about €120m ($160m). Their market strategy is built on heavy discounting (about 80% of the rate card vs. 50% for the paid-for press). As a result, a full page in a free daily will net about €10,000-15,000 as opposed to €40,000-50,000 for a major paid-newspaper.
In Q3 2010, for 16% revenue growth, 20 Minutes showed a negative EBIT of €1.3m; it could however turn a small profit for the full 2010 year with revenue in the €50-55m range. Metro showed both a declining EBIT and declining revenue for the same period. The other two papers don’t provide figures but are said to bleed cash.

Where is this going?

#1 Readership. The key issue, obviously, but without a clear trend. The free press is designed to target a young, urban, active audience, one that is in high demand by advertisers. To make targeting more efficient, these papers beg for localization: specific pages for news, culture, services, etc. produced by a small local staff.
On the French market, free dailies show a small year-to-year growth thanks to the opening of new cities. In theory, such expansion is fine.  But going in the second tier of cities means watering down the very demographics the papers rely on for their pitch to advertisers. Plus, in smaller areas, localization becomes economically unviable. Even if, on a spreadsheet, publishers are still able to defend the marginal cost of expanding into smaller cities, the gain in advertising revenues is close to zero (or will get there after few quarters). A perfect example of the law of diminishing returns.

#2 The product. When they commute, what do people do instead of reading a free daily? Their heads are deep down inside their smartphones. Compared to a convenient, permanently updated, set of mobile services, the free press has lost its appeal.
Right now, the free daily is riding a low-cost downward spiral: fewer pages every day, requiring less journalists and editors, at every level cheapest is best, etc. Product people are no longer in charge. The result is seen every day in the product: nothing to retain the reader’s attention, no original treatment or angle, no uniqueness whatsoever; content is flat, bland, and often packaged in an increasingly aggressive ad environment (several times a week, an advertising cover-sheet conceals the content of the front page). No wonder the mobile phone is taking over. The rise of the smartphone took the free press by surprise, both in terms of time allocation (hours spent to text-messaging of Facebooking) and by its ability to provide a competing news product.
In retrospect — always easier than making good predictions — free papers should have capitalized on their brands, built upon millions of daily readers, to develop strongholds in web and mobile, with products targeted at every segment of their audience. In addition, satellite, market driven products in both editorial and services, should have been engineered. Darwin’s survival of the fittest.

#3 Market positions. Revenue and profit numbers show the importance of retaining the number one slot. On the French market, in spite of having a better product and running a tight ship, the n°1 position held from the start by 20 Minutes is likely to change. For one, profitability is fragile with three players on the market — one too many, at least. Two, Bolloré Media — publisher of Direct Matin and Direct Soir — shows both resilience and resolve. Size matters: for the €6bn revenue Bolloré Group, its free dailies weigh about 2% of the conglomerate (two thirds are transportation and logistics). In such a context, the €40-50m poured into the free press is pocket change.

The low barrier-to-entry is one of the most challenging free press features. Basically, you design a product, put together a stable of two dozens journalists, sign a couple of printing and distribution contracts and you’re in business. The rest is a constant adjustment to circumstances. It is very difficult to built a durable, unique and hard to replicate business.
In addition, Bolloré enjoys two advantages: it holds strong positions in the advertising sector (from creation to media buying) and, more importantly, it has the luxury of the time. From its perspective, being the late-comer with a so-so product is a minor inconvenience that can be corrected over time. The 172 years-old Bolloré group is good at the wait-and-adapt game. For instance, the weak evening edition of its free daily (Direct Soir) is about to morph into a theme-oriented daily special (cars, sports, well-being…). In the meantime, it will keep beefing up its circulation and thus could en up in a position to take the critical #1 slot. With a set of editorial products carefully designed to attract advertisers, Bolloré and its Direct papers could disrupt the game.

But in the long run, free newspapers face the tough and delicate challenge of dealing with digital news consumption. They still own great assets: brands (not as diversified as they could have been, still…), huge audiences and healthy shareholder structures. It is “a mere matter” of adapting products and creating new ones. Management by KPI is fine — and necessary. But, in a highly media-diverse competitive market, “painting by the numbers” can’t compensate a lack of product strategy vision and implementation.

Young readers: already hooked on subsidies

I love my country. Among many things, I enjoy its business attitude. In the media sector, it is an unabashed mixture of entrepreneurship, bold risk-taking and fearless independence. You can’t spend a week here without someone telling you : “Hey, you know what? We’re about to send some of our journalists, paid by the Ministry of Foreign Affairs, to train bloggers in Middle East. Isn’t that great ?” (Yeah, indeed — you just received a €14,000 invoice from the state health insurance administration, they recalculated the cost of your health coverage for the past year).
Another one: “We are going to launch a new version of our mega-site, built on CMS x.” (The guy mentions an horrendously expensive proprietary Content Management System)”. You ask : “… Huh, why not using free tools, instead? You hire a couple of engineers, create your own specs, schedule a year of successive upgrades, and you’ll get great results, no?”. The answer is ironclad: “Bah, it’s all government money, you know…  It is part of the Press Modernization Fund… And we’ll even be able to finance the iPhone App from the same moneybag…”

As we speak, there is a big debate at the newly created Syndicat de la Presse Indépendante en Ligne (Spiil). This professional body of online news publishers, is pondering whether to accept subsidies. Pragmatists say big medias have been taking subsidies for decades. Now, the big guys spend huge sums of public money to upgrade their sites and they compete with us. Purists disagree: No way, we are not going to replicate the old MSM (Main Stream Media) behavior. Well, most of those pure players are struggling to balance their P&L while doing good journalism. Now way, I’ll lecture them one way or the other.

Yep, I love France’s profligate attempts to keep its press alive. No country spends more money to preserve the freedom and the plurality of its press: €1.2bn in 2008 (taking into account all forms of aid); that is 12% of the sector’s total revenue. (Just picture the US government coughing up about $8-10bn a year to help its newspapers and magazines industry!). And the percentage is likely to go up: new programs were announced this year (see Media acquisition, the French way) and press revenues are eroding. Between 2003 and 2007, French subsidies rose by 71% versus +21% in Sweden. For added perspective, Swedish readership is three times higher than in France and, as a result, proportionally five times less subsidized. More

Inhale, it’s Free

“Free”, as a business model, is a figment of the imagination. In itself, “Free” is not a business model, it is only a component of broader revenue system. Unlike Chris Anderson, author of the book “Free” ($18.00) — a bestseller not a bestfreebie — I happened to actually practice the free “model”. Between 2002 and 2007, I was the editor of one of the most successful free quality daily newspapers in the world.  20 minutes is now the most read newspaper in France with 2.7m readers, every single day, in eight major cities.

To put things in perspective, the US equivalent would be a free daily distributed in about 20 cities, with 13 millions readers. More than Japan’s Asahi Shimbun. 20 minutes is not a mere compilation of newswires. It is a “real” newspaper, with original content provided by an 80+ journalists newsroom. And readers love it. Free it is. But so costly.  When we reached our cruising altitude, we needed about €200,00 ($280,000) in advertising to break even (which the paper eventually did achieve). In Spain, too, 20 minutos, became the largest daily in its market with 14 different editions and a good profit margin — that was before the recession struck hard. (The Norwegian group Schibsted owns 100% of Spain’s 20 minutos and half of the French edition, in joint ownership with the regional group Ouest-France).  

I was then an advocate for the “free” press and I still am. Applied to the print media, the free concept brings many great things. 20 minutes’ readers turned out to be :

  • New : 75% of them didn’t read a newspapers before.
  • Young : they were about 10 to 15 years younger than the average French reader.
  • More gender balanced: we had an equal proportion of male and female readers.
  • More professionally active (almost no retired people, for instance).

This was no accident, it was the result of a well-crafted strategy. More

Web + Print: A Powerful Combo

In today’s context of massive revenue depletion, everyone (almost) agrees on one thing: digital media revenue sources will have to be diversified. There is no magic bullet, no dominant model that will guarantee, by itself, a sustainable revenue stream. Time to think the hybrid way.  Free will coexist with paid-for, different users (occasional vs. intensive) will be discreetly assigned different revenue models, platforms will diversify as technical standards for publishing or transactions emerge, opening new fields for monetization. Old churches and ideologies will crumble.

The biggest stimulus for such creativity is the collapse of the internet advertising model. On average, CPM (cost per thousand viewers) have dropped by 30% – 40% during the last twelve months and very few expect a recovery.  As far as booking rates are concerned, they are dropping as well. It is frequent to see only a mere 30% of pages inventories actually sold to advertisers. Unlike prices, this latter percentage is likely to bounce back at the first sign of economic relief.

But the classical advertising model’s weakness is more structural. The “old” banners / display stuff doesn’t fly as expected. People simply don’t click enough on those items and even sophisticated targeting yields minor relief. The only “healthy” segment is search ads, but it is dominated by the Google Way — a massively deflationary one. Successful medias will be the ones who manage to shake off the old cobwebs and proceed to rethink their relationship with the advertising sphere. It will be fairly easy for social or non-hard news sites, but true information content vehicles are likely to struggle with ethical issues…

As far as platforms are concerned, last week, we looked at smartphones: they’re on their way to become the main vector for news, whether it is for text or video. Numbers looks good: last year, according to IDC, on the 1.19 billion mobile phones sold worldwide 155 million (13%) where smartphones. In 2013, says IDC, 1.4 billion handsets will be sold, among them 280 million (20%) smartphones. And if anyone harbored any doubt regarding the ecosystem’s health, just consider the 65,000 applications available for the iPhone and the state of the competition. As explained in this Fortune magazine story, the sector is red-hot: since the iPhone introduction in june 2007, Blackberry quarterly sales have more than tripled. Even Google joined the fray with Android phones — and following a trajectory than will put the search engine to a collision course with Apple (see Jean-Louis’s column War in the Valley; Apple vs. Google).

Coming back to the title of today’s column, let’s talk about paper, the pulp, dead tree version. I can see many reasons why some sort of paper version can help. More

Paid-for-free papers: the mirage of the hybrid models

In less than five years, major newspapers will be giving away more than 50% of their copies. We call this the hybrid model. It works like this: a paid-for newspaper (one posting a price on its first page) with a vast portion it circulation distributed in selected – that’s the key point — areas for free.
I started writing this column last Monday in the Copenhagen airport while waiting for my connecting flight to Oslo. I was able to grab a copy of the International Herald Tribune for free in an airline courtesy rack.   All the while, fifty meters away, a newsstand sold the very same paper for 20 Danish Kroner, approximately €2.68 Euros or $3.60 dollars. (Just for context: the New York Times charges $2.80 a week  for weekdays home delivery in Manhattan).
Where is the catch? Actually, the IHT does just what many other papers already do: selling papers to airlines to reach business travelers. And the higher you go in the air travel social ladder, the more free papers and magazines you get. Business hotels do the same.  But for airlines, the deals are well structured, mostly for logistics reasons: putting the right number of copies in airport gates and on-board is way more complicated than dumping stacks in a Hilton. Numbers are closely held but, usually, airlines buy newspapers for a fraction of the face prices. For the International Herald Tribune, it must be around 10% of the official price while others get around 20% of the same. But, in many cases, cross advertising deals and logistics billing end up offsetting the entire price of the paper. Then, we can safely say that any paper you find while boarding your plane is 100% free from the publisher’s perspective.
Why are publishers paying such a high price to have paper delivered on airlines? Two reasons: reader attention and demographics. In this context, there are no official studies for daily newspapers or news magazine.  But we can derive a few trends from the in-flight magazines industry. According to a survey made in 2006 by Arbitron (PDF here), 80% of travelers have read an in-flight magazine in the past month. During each flight, the time spent reading is 31 minutes — that’s about the time spent daily by a reader of a national newspaper in Europe. Again, this is for a magazine, nice and glossy, that just happened to be “in the seat pocket in front of you”, but with a rather shallow content. For a newspaper you actually choose to pick-up at the gate, the reading time and emotional engagement is likely to be higher, especially on long-haul flights.  Now the demographics: 72% of such readers have an annual household income higher than $100,000 and 27% higher than $200,000. An attractive target indeed.
How big is the airline free distribution? That’s a good question. Free or almost free distribution is buried deep into audit circulation data. Let’s have a look at the International Herald Tribune figures. As a Paris-based newspaper, the IHT files its circulation data to the French audit bureau of circulation (OJD) even for its global sales.

Here are the key figures (rounded) for the full year 2007:
-    Total circulation: 242,000 copies
Breakup per zone:
-    Europe: 57%
-    Asia: 38%
-    Middle east:  2.5%
-    Americas: <2%
Breakup by type of circulation
-    Individual sales: 44%
-    Third party paid circulation: 38%
-    Non paid circulation: 18%
Now, the OJD report shows that in the “Third party circulation”, airlines account for 60% and various “hosting” (than includes hotels and corporate sites) for 36%.
Well, you get it: more than 56% of the circulation of The Herald Tribune is actually free. (That is all third party, 38% + the 18% admittedly non-paid). And if we apply the same calculation to the French press, we get, as a real free circulation:
-    17 % for Le Monde
-    27 % for Le Figaro
-    37 % for Les Échos (France’s main business daily)
Hence the question, how to implement the idea on a much larger scale? How to reach a bigger chunk of high value audiences using the same technique?  “Than can be summed up in one idea”, says Bruno Patino, former CEO of Le Monde Interactive, who likes to pitch the concept of paid-for-free newspapers: “The audience I do want, as a publisher, gets the paper for free; the rest have to pay for it”. This principle is applied by an increasing number of newspapers such as La Repubblica in Italy, El Pais in Spain, Le Figaro in France and, of course, the Herald Tribune (eventually to be merged with the New York Times as their websites will soon be). These papers currently give away about a third of their circulation.  My prediction is this proportion will reach the 50% mark in three to five years.
The hybrid model bumps against two limits, though. The first one is the fit of the product to the target audience(s). OK, giving away a business newspaper to a business reader on a flight between London and New York or in Sheratons makes sense.  But for most general news publications, the goal is to cultivate three types of demographics: young, women, and “urbanites” (those who live in big cities and spend well). Problem is: reaching them with mainstream newspapers doesn’t work, even (or especially) free ones.  In France or in Spain, in places such as universities where several newspapers stand side-by-side, the ones who go first are the quality free papers such as 20 minutes, Metro, or Qué, which are designed precisely for young urban people of both genders. (Having said that, it is probably somewhat worrisome that student don’t pick-up newspapers with heavy world affairs or economics coverage, but that discussion is for another day). Fact is: we know that the “one-size-fits-all” doesn’t work in the media sector — especially as audiences become increasingly segmented). At least it won’t fly without a major product adaptation and segmentation.
The second limit is the social approach of the news business. Giving away a quality paper in affluent universities, trendy places, while, at the same time, asking a young person leaving in a below-average neighborhood to go to the newsstand and pay for the paper, is to say the least, disturbing.  Of course, there is the option of “you do it, but don’t say you do it”. This is even more cynical. Some will retort that free newspapers have been doing audience selection by optimizing their distribution maps for a long time. Right, but it was done for a much wider audience: in the greater Paris area for instance, the free quality daily 20 Minutes reaches 1.57m people, the second free Metro 1.37m,  compared to 0.8m for Le Monde, 0.5m for Le Figaro and 0.3m for the business daily Les Echos). Plus, free papers are mostly read by commuters, so their social penetration is unparalleled.
There is no argument: newsmedia are not philanthropic institutions. But it is also undisputable they carry out a social function in their community. This function remains more important than ever as media become more interactive, more conversational. And it is part of the monetization process. By making a caricature of the audience selection process, this social function will wither away. –FF

What a modern newspaper will look like.
Inventing the DIS.

A few years ago, someone involved in the rescue of the French newspaper Libération asked me what would I do to save the paper. The question meant a lot to me. I had spent a total of twelve years at “Libé”, many of those when the paper was at its best (I even enrolled Jean-Louis Gassée as a columnist at the time).

This is what I told the owner’s representative:
- One: Dump the idea of a daily paper. Too expensive. Too much competition with the Internet. Distribution in France is hopelessly costly and unreliable.
- Two: Equally allocate journalistic resources to two products, a website and a weekly paper. The website (and its mobile version) covers daily news. The weekly is a light and focused Friday magazine: a small number of well adjusted, value-added stories (investigative pieces, in-depth news analysis, great profiles), great photographs (Libération was once renowned for its piercing, memorable pictures).
- Three: Dump your current printing contract; is only produces a paper where the news stick to the reader’s fingers. Pick a modern printing plant, one able to make a 60 pages magazine, tabloid-sized, with a look and feel comparable to classy British Sunday magazines.
- Four: Restructure the newsroom. Not a little, drastically. Keep the well-known bylines (I meant, those who work), keep the editors who will preserve the standard for the news gathering process. Flatten the organization (French papers, like American ones, have about ten layers of management in the newsroom). Don’t do a buyout like you did already four times (in each instance, the best people took it, it was an IQ test). Inject new blood, there is plenty of young talent out there. Outsource whatever doesn’t make the paper’s style and substance.
- Five: Build on your brand. It is a terrific, undervalued asset, your poor management has downgraded it to charity business (I was even more diplomatic, but that was the idea).

Needless to say, Libération chose a different path. Mostly flattering the oldest segment of their shrinking readership and therefore, sliding slowly on the tedious slope of a complacent irrelevancy. In marketing theory, this is known as “following your demography to the grave”.

Was a turnaround of such magnitude feasible? Perhaps not. Too much financial and human pain. Maybe the very fabric of the paper would have been lost in the process. Maybe. But I’ll always think this paper, which used to be the most brilliant of its time, missed an opportunity to regain its avant-garde status.

Like most of my generation, I don’t see life without newspapers. Well, without something that fulfills the theoretical functions of a newspaper (which, in turn, open the door to other forms of news products).

Two things strike me though.

The first is the cliff-like drop in newspaper advertising revenue. (Read this stunning account in last week’s NY Times). Speaking of The New York Times, its debt is approaching “junk” status.

The second is the number of news junkies (look around you, not at me) who give up physical newspapers without any visible withdrawal symptom. They simply replace one interface with many: web, mobile internet, RSS feeds, a good laser printer to enjoy long articles in bed or at breakfast.

This leads me to wonder: knowing what we know today — shifting advertising market, readership changing habits, modern production settings — what would a modern newspaper designed from scratch look like?

The DIS (Daily Information System) core features:

1. No more one-media setup. Today’s stand-alone daily is on deathwatch. As DIS component, it has a future. Let’s face it: pure news, breaking news, developing stories now belong to the electronic medium. Radio, mobile Internet, website: when speed is key, the paper is dead. Therefore, a DIS must allocate resources flexibly between electronic and paper versions. The survival of the paper is not conceivable otherwise.

2. No more 365 print runs a year. The paper must not be printed every single day of the year. Readers don’t need it; the advertising market no longer supports daily printing. Relevancy and value-added are the only allowable motives for a newspaper, not day-to-day obligation, a stricture of the pre-Internet era. But now, as long as a media enjoys a comparable audience for its electronic and print product, a newspaper can afford (enjoy is a better word, as in financial health) a dotted publication pace. A sustainable model assumes publishing three or four times a week.

Wait, it makes more sense than what we see when only looking through today’s lens: since breaking news and updates are on the web & mobile, the paper is devoted to in-depth journalism (news analysis, reporting, investigative pieces, profiles). Frankly, as long as hard news is available elsewhere and controlled by the same editorial team, who cares if an analysis of Vladimir Putin’s strategy in Georgia has to wait a couple of days? (Actually, more thinking and editing time will make it better). There, relevancy majestically trumps immediacy. Majestically? Think of the regard in which the NYT’s editorials and columns are held.

From a cost perspective, this model makes a huge difference: no more dual labor shifts, better profitability of the ad space (less discount for slow circulation days).

3. The price equation: paid or free? I lean towards the free model. Here is why.

- First, most newspapers are already free — almost. From the Times of India to the Washington Post. Advertising makes the bulk of their revenue. The reader paying to support his paper? This is mostly an illusion (France is an exception, its press is expensive, elitist… and dying).

- Second, like it or not, the Generation X sees can’t see information in any way no other than free.
Three, a sophisticated free newspaper can have a distribution system as targeted and precise as a paid one. Today’s techniques for spotting audience groups are unprecedentedly refined, much more efficient than dumping a stack of papers before a newsstand at 5:30am. By factoring socio-demographics, hourly habits, even newscycle and weather conditions, distribution can be laser sharp.

Readers like free papers. Research shows they find the concept friendly, generous, practical. Many free papers launched as a defensive move by their publishers turn out to be embarrassing successes.

There is an alternative to the free model: a very low price; it yields a better measure of readership and discourages people to discard the paper after 30 seconds of scanning. (For the best free newspapers, the proportion of premature evaluation readers turned out to be small).

4. A more sophisticated sales model. Airlines hate empty seats, look at what they do: dynamic pricing, rates change every minute, yes, a deal will disappear before your very eyes, if computer’s instant load forecast says so. Contrast this with newspapers: the advertiser is asked to pay the same rate per square centimeter every single day of the year (plus or minus 20% with good negotiation skills). Weirdly enough, dynamic pricing has percolated into broadcast media, but not into the print press, why is that? The size of the inventory — i.e. number of slots — does not explain everything. The roots of the problem lie in the advertising food chain, in its creaky conservatism. It starts with the sales manager. There, the preferred staff performance metric is the number of appointments the salesperson manages to stuff in a week (bear with me: it’s pathetic). Then, we move to the media buying agency’s struggling contortions to justify its presumed competency.
For the business plan of a modern DIS, my first move would be hiring a quant PhD. I’d task the brainiac on a tri-media (paper-mobile-web) dynamic pricing model.

5. The product interface and production. Low quality newsprint on a broadsheet is like vinyl records for the music industry. Time to switch to iPods, folks. Contemporary recipes are: small format, no more than forty pages, paper that doesn’t bleed ink, pages glued or stapled, good quality printing to justify premium pricing to advertisers. Indisputably, it works, cf. the tremendous success of the French 20 Minutes (2.5m readers). And layout must be as modular as a Lego game.

This also means the end of cathedral-like, union-controlled printing plants. Small printing presses, able to do profitable runs of few thousand copies are key. And no more printing ownership anymore. That’s passé. Now is the time for well-designed contracts that reflect the new medium’s flexibility.

Modern printers can also economically handle upstream distribution tasks such as preparing bar-coded bundles of papers at the end of the printing chain to make the truck distribution process more efficient (unthinkable in France or the United States due to union obstruction, of course).

6. Staff structure. Keep the org chart as flat as possible. A newspaper must be run by no more than five top editors, plus a few section heads. That’s it. Three or four levels of management maximum, not ten or twelve. The complexity (hence the cost) of a newsroom tends to grow with the square of its staff size.

Outsource non-core competencies. Including journalistic ones. By core competencies, I mean what really defines the identity, the orientation of a newspaper: national coverage, foreign affairs, economy, and culture. Conversely, sports, consumerism, science, style, travel can be outsourced to specialized entities, on a contractual or on-demand basis. Less people in the core newsroom means a smaller chain of command and therefore a much healthier metabolism. No place to hide, bosses included.

Outsourcing includes the recourse to outside experts. Experience shows that many stories would be vastly improved with input from technical experts (legal or economic areas come to mind). A respectable paper maintains a network of experts and scholars, real ones, not quote machines.

Oh, by the way, to the best of my knowledge, an engineer at Apple is not especially encouraged to work on the side for Cisco or Google. Therefore I don’t think a journalist should be allowed to moonlight for other media outlets. It’s fine to have some star-writers who are going to enhance the visibility of a title by writing best sellers or hosting TV shows. But, frankly, how many fall into that category? Two percent? Truth is: the Woodward type is a scarce commodity (and still: according to his contract with the Washington Post, he can work on any subject, as long as he gives first dibs for his scoops to his paper). Therefore, salaries must be adjusted accordingly (kill the idea of low-cost journalism, would you trust a low-cost neurosurgeon?).

7. The test and learn approach. An virtue of an Internet venture lies in its ability to morph and adapt in response to change, whether it is market conditions, unexpected competition, or simply intuition. By comparison, the concept of “release” (v.1.0, 1.1, etc.) is totally alien to newspaper culture. There, because of layers of managements and fiefdom mentality, committee is required to make the simplest change in a layout or to launch a new heading. Like any product, a newspaper needs constant adjustments. The ability to test and adjust is not a byproduct of Internet technology, it is a core feature.

In my view, the DIS is not an option, it’s not even “innovation”, as in something that’s nice to have, that you can get on your own time. How many of today’s newspapers will survive by merely tweaking their ways, their culture? Will they march to the grave with their aging readership? They should look at how many Grey Panthers are using laptops now and weep. In other words, how many titles will get to the newspaper graveyard leaving their readers to really new newspapers? –FF

UK’s CityAM : profit and expansion

The free business newspaper CityAM is growing slowly but steadily. Its circulation is now close to 102,000 copies, a 47% increase since its launch in September 2005, and it could now expand out of London. Financially, CityAM made a 59,000 Euros profit for the six months ended in March, on revenues of 4,4m Euros for the period.

In many ways this small newspaper represents what a modern, focused daily should be:

- A lean and mean organization, built around a circulation calibrated for its audience, and which is small compared to other free UK papers (400,000 for Londonlite, 500,000 for The LondonPaper, 1.36m for Metro UK)

- Precise targeting: CityAM is distributed in the City of London at Canary Wharf, i.e. at the exit of only 17 subway stations out of the 572 in London. As a result, it enjoys a market reach greater than the Financial Times (actually, 80% of those who take CityAM have not read the FT when they arrive to work).

- Selective journalism: not only does CityAM bring its share of scoops, but it also manages to provide incisive analysis thanks to a sharp set of columnists. Its small staff also conducts excellent in-depth, fairly long, interviews. (CityAM is largely killing the idea that free press means only short articles).

- Editorial mix: a fair share of the paper is dedicated to lifestyle (about fifteen items spread all the week) and sport.

The result are enviable and solvent demographics, with readers making an average of 80,000 Euros a year. Not the grandiosity of the Financial Times, but way more readers per stories. (You can find more stuff on the subject in PressGazette and in the Newspaper Innovation blog.