Tuesday, December 26, 2006

print turns to electronic, reluctant or hard?

My long-time online friend Fons seems didn't care on what's going on in the Hong Kong's largest newspaper. To him, "By maintaining a solid financial firewall, its articles fail to become part of the ongoing online discussions, making into the laughing stock of the 21st century." I could understand his feeling. As one of the active foreign bloggers in China, Fons has more than enough reason to believe the Internet power, and in turn, he thinks many things should be exposed out of the financial wall to Internet users.

When I was a young journalism student and active Internet surfer too, I couldn't agree more on his opinion. But after working in newspapers for several years, I understood more on the worries of newpaper, especiall the leading newspaper, from an inside view. SCMP is not the only one having the wall, Financial Times and Wall Street Journal, two most accomplished business newspaper, also have the financial wall. As a new start-up media company, it is much easier to share the content freely in order to attract new readiers, and thus new advertisements; but for established and branded newspaper, their worries on turning around to use the new online profitable model, may kill their already-successful business model in one day. Destination to the electronic age already exists in everyone's mind, but "when" and "how" are the biggest problems. Several issues to consider:

(1) Subscribers.

When you could read the newspaper online freely, will you still buy newspapers? I believe that's the most important question in the desk of every newspaper executives. Possibly, many people will stop buying newspaper, so in the turning-around process, how to make sure the smooth connection between the time point when the subscribers could still buy the prints and the time point when the advertising could cover the loss of subscribing revenues.

(2) Content.

How many content could be publicized freely is also another question. It decides finally on how many print readers will leave and how many advertisement could attract. FT.com will make the first and second paragraph of every story as free, which is a common model among many media; getting advertisers' eyes as well as readers' stomach is a good trick.

(3) Employee.

Online expansion also needs more stuffs to work on more as getting rid of the space limitation on the print copies. It is hard to recruit good employees when online revenue is still zero(except for the period of Internet bubble). So if is it a good way to push the current employees to contribute more to the online copy or invest more in the expansion remains a question.

Having said those, one of my good suggestions for estabilished newspaper is trying to set up "free" model in the emerging market providing new content to new customers. The online Chinese version of Financial Times and Wall Street Journal have done a good job in bringing many Chinese readers without affecting the current revenue from English version. They also brought a bunch of advertisers. At the current stage, the newspaper could subsidize "the new model of new content" based on the revenue from "old model of old content". When the new model is profitable enough, the old model could be subsidized in a reverse way to finish its turn around.

That's just like the egg-basket strategy. When you could afford the risk of losing all eggs, you could definitely put all eggs in one basket; but if you couldn't, then better put some eggs in another basket to test its stability, and then try to move more. Finally some day you will put all eggs in one basket when you trust that basket fully.

P.S. SCMP also started to provide its Chinese content freely on the website. A good beginning but still in the progress.

1 comment:

Fons Tuinstra said...

Amy, Amy: you already sound like an old-style newspaper journalist and you ask exactly the wrong questions in your headline.
The online activities should not be seen as a different activity or even a threat for the offline paper.
Even in a city like Hong Kong, where the South China Morning Post has a priviliged position because of its quasi monopoly, the worldwide trends undermining the traditional newspaper industry will in the end ask its tol.
Newspapers often still make money, while online operations have a hard time to do so, although the balance has started to shift. But when the traditional media do not use this window of opportunity now and only start to invest - and explore revenue possibilities - in online operation when they are losing money.
I'm not sure whether foreign newspapers will ever be able to compete with domestic media in China. For the time being I would use existing strongholds in stead of diving into unfamiliar markets.