Journalistic deadlock: Print issues losing, online lacks profits

Sherif Tarek , Saturday 5 Jan 2013

The future of the press is in limbo with papers and publishers sinking into the red, unable to sustain print sales or capitalise on the digital market

Newsweek is one of the famous publications that have gone all digital to avoid print losses (Photo: Reuters)

While news organisations have been facing increasing financial difficulties due to market changes, no remedies seem to be on the horizon, according to journalism and business gurus, who believe the digital world has yet to bring back stability to the Fourth Estate.

Behind the mounting woes of print institutions — many of which still primarily rely on papers to generate revenue — is the worldwide boom of online media, with readers progressively opting for free, more up-to-date digital platforms rather than priced and soon-obsolete publications.

And as the persistent decline in paper distribution has been frightening off advertisers for over a decade, the digital market — despite its growth — is still unable to financially counterbalance dwindling newspaper sales in many countries.

Going online is usually seen as the most viable option amid an impasse that has witnessed the layoff of many reporters and the closure of a good number of publications the past couple of years.

Well-known US magazine Newsweek, for instance, cancelled its print edition before its 80th anniversary in October and decided to go digital with the intention of cutting costs. Other publishers around the globe have been following suit.

Egypt's state-run Al-Ahram, the largest news organisation in the Middle East, is no exception.

"I think within three years all Al-Ahram publications will shift from paper to online, except Al-Ahram [national] daily newspaper," Omar Samy, general manager of the institution's online products, said right before the international print of the daily Al-Ahram closed last month.

Internet users in Egypt have reached approximately 22 million, a 30 per cent increase from last year's rate, with an internet penetration rate (percentage of the total population using the Internet) of 27 per cent, according to a recent information and communications technology (ICT) assessment report.

According to other statistics provided by the Ministry of Communications and Information Technology, mobile internet subscribers in Egypt reached 11.5 million by April 2012, registering an annual increase of 28 per cent.

"The online versions would yield better financial results and good outreach," added Samy, who is also a former Al-Ahram board member.

Al-Ahram, which owes the tax office around LE1.6 billion, started developing its web platforms three years ago. Its online products, however, have so far done little to commercially aid the 138-year old organisation, which is still several strides away from attaining net digital profits.

"I believe we are doing a good job. Our online news are number 1 in Forbes' Middle East 2012 ranking (a leading source for business news and financial information)," commented Samy. "We have about 26 websites, more than a million Facebook fans and about 830,000 Twitter followers.

"Though, I don't think the online [platforms] will be able to offset the organisation's losses in the near future … Al-Ahram is facing borderless advertisement-selling competition with very powerful international and regional agencies, and we still lack experience and facilities."

Samy elaborated: "What I think will happen in the near future is that many newspapers, especially the daily ones, will shut down. The main reason is lack of advertising revenue, especially with Egypt's current financial problems."

No better in developed countries

Egypt's unenviable economic situation, which has been deteriorating since the 2011 revolution and the ensuing turmoil, might have added insult to injury. However, newspapers in more politically and economically stable countries are likewise endangered.

Renowned German national daily Frankfurter Rundschau filed for insolvency in November as DuMont, one of Germany's oldest and largest publishing houses, decided to only produce its second daily, Berliner Zeitung, distributed only in Berlin.

"The advertisements [in the Rundschau] are going downwards and now the paper is a financial burden," stated Tobias Miller, the politics editor of both newspapers, during a seminar held at one of DuMont's Berlin offices in October. "This has been the case for all publishers nowadays."

And although it is a European powerhouse and one of the most developed countries in the world, Germany — like other European countries — is lagging behind in the digital trend, much to publishers' misery.

Whereas quite a few news platforms, especially privately owned, in the economically-crippled Egypt have proved financially rewarding as independent outlets with no print versions, German portals are mere online editions of their respective papers and can barely break even.

"Advertisements on news websites are hardly profitable in Germany," Cornelia Hass, the director of the German Journalists' Union, said during another seminar held in the body's Berlin-based headquarters in October.

"This is not the case in several other countries. In the US, for example, advertising on news portals is far ahead in comparison to Germany."

Hass explained that German publishers are to blame for the dull online market in the country, saying they have reacted only recently to the longstanding US digital leadership. Their late response has cost them dearly, she reckons.

"This [online dominance] has been going on for years but German press institutions have started to act accordingly only in recent years; publishers have been sleeping for so long," she added, lamenting Germany's undeveloped digital market.

"Meanwhile, papers are losing readers everyday to news portals, so I would say it's a bad time for print journalists … It will take time until the internet business becomes comprehensive in Germany. I would say in 15-20 years news portals will take the lead."

New generation

In general, news organisations and publishers can survive only on digital platforms, according to Ahmed Saied, content manager of an established Cairo-based digital publishing and marketing company, Sarmady Communications, which owns several reputable smart news platforms.

"But the question is: How many tools and opportunities can they leverage from these digital platforms?" he told Ahram Online. "The problem here won't be in depending solely on these platforms — on computers, mobiles or tablets — but in the incompetence of leveraging them."

Saied is convinced that in order to be successful, engaging, and more importantly lucrative, online journalism has always to go beyond the normal print patterns by employing all possible features that cannot be seen on paper.

"If you are going digital, building your content strategy like you are doing with a paper — using just text and photos, for example — will not work. Info-graphics, interactive content, podcasts, charts, maps and tens of other tools should be used to attract users and drive repeated visits."

Print media, meanwhile, will not be extinct with digital platforms leading the way, Saied stressed.

"Ironically, one of the most successful apps on IOS (a mobile operating system developed by Apple) is flipboard, which gives you the ability to browse your favorite news sources and social profiles as if you are turning pages of a magazine," he said.

"Any smart content marketer and/or journalist can't ignore what this means," Saied said.

But the publications that will survive, Saied thinks, are the ones that reinvent themselves to keep pace. "Journalists and publishing houses have to evolve," he stated. "Print still has its magic and could still achieve success, provided that they know how to appeal to the new generation of media consumers."

Some of the common online structures can be implemented in print papers, Saied explained, such as data visualisation, social integration and citizen journalism (done by users or readers). "This could give a lifeline to traditional newspapers," he added.

"If you look at most of the successful print media outlets in Europe and the US, you will find that every page is being turned into a piece of artwork. The New York Times is the leading newspaper in this area. Spanish and French sports papers are outstanding as well."

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