The biggest challenge today for newspaper companies around the world is to successfully monetise the new platforms of content delivery, namely, the Web and the mobile phone. According to studies done by various consultancy firms and agencies, the share of internet and mobile phone in the overall advertising pie will rise in the future. But how much of that will go the news media companies remains doubtful.
"Internet offered so much promise, but not profits," said Les Hinton, chief executive officer, Dow Jones & Co., US on the third day of the 62nd World Newspaper Congress (WNC). His statement sums up what most media companies are currently going through.
However, that does not, by any means, suggest moving out of the platform. Newspaper companies already are, or are moving towards, being multimedia companies. At the WNC yesterday, owners of newspaper companies sat down to discuss the ways of growth of such an entity and how to make money out of the new platforms.
John Paton, chairman and chief executive officer, ImpreMedia LLC, USA did not agree with Hilton's views. In his opinion, companies should work with search engines or "aggregators", which walk away with the lion's share of the advertising pie. "Companies cannot discriminate between aggregators. Do what you do best and link the rest," said Paton.
ImpreMedia is the largest Spanish paper and online portal in the US. The company currently gets 10 percent of its revenues from the digital space; the objective is to increase this to 40 percent in the next three years. The company has adopted the notion of "print last". Paton, however, clarified that this did not mean that newspapers did not have a future. What it emphasised is that paper is one of the many products from print media companies. He gave newspapers companies 10 years at most to restructure, so that print newspapers account for only 30 percent of their revenues.
The Indian newspaper companies, though aggressive about the new media, have paper as their priority. This is partly because the literacy levels in India are not as high as in developed markets; and therefore, potential exists in the market. Also, with the market being huge, there is space for many players to coexist.
Bharat Gupta, executive president of the Jagran Group, said that while the base is small, the internet penetration will go up and it is important for them to be active in this space. Right now, no Indian news media company charges for online content.
In addition to internet, the mobile phone is likely to become a major source of news media content. Most newspaper companies have tie-ups with telecom operators, which allow them to send news on the mobile phone. But maximisation of revenues remains a challenge here too.
"We get 30 percent of revenues earned from texting. This is not much, but we go with the volumes. At the same time, we are talking to new entrants," said Ma Alexandra R Prieto-Romualdez, president and chief executive officer, Philippine Daily Inquirer/inquirer.net. People in the Philippines are active users of SMS. In fact, Manila is known as the text capital of the world.