Innovation in the newspaper industry
Q: Last Friday (Jan. 3, 2014), we said that because we ran out of space, we will take up the seemingly more difficult case of innovation in the newspaper industry. To recall, our readers’ request was this: “Will you tell us if our recruitment speakers are correct? Where’s the innovation in these two even longer standing ad media industries of radio and newspaper?”
A: So now, let’s proceed to the case of the newspaper industry. The predicted future for this industry is terrible, much dimmer than for radio. But is there a TeleRadyo-like innovation here that can at least lengthen its life if not rejuvenate it?
If you observe very closely some of the changes that have been taking place in this print media industry, you’ll be surprised. They’re not at all hardly-visible changes. They are there for everyone to see. But they’ve been largely ignored changes especially the change in the reading need of the print media reader segment.
That’s a reader need change that you can’t help notice from the unbelievable multiplication of limited-audience specialty magazines. These specialty magazines have replaced the general-audience magazines, the most popular of which was “Life.”
It was Lisa Gokongwei-Cheng’s Summit Media that pioneered in the Philippines this take-over starting with the publication launch in June 1995 of the magazine “Preview.” Lisa read a need among shoppers for a shopping guide magazine and so brought out “Preview.” Following Preview’s big success, Lisa uncovered two more magazine reader segment needs. Young teen Pinays wanted their own “guide.” So Summit came out with “Candy.” Then, Lisa saw how hungry movie and celebrity fans were about what’s the latest “tsismis” (inside news and rumors) about them. So Lisa’s Summit came out with “Yes!”
And more than a dozen others followed after and were in varying degrees also successful. There was “Cosmopolitan Philippines,” “Entrepreneur Philippines,” and the famous (or infamous) “FHM” that took over “Playboy” and “Penthouse” as sources of the erotic fantasy needs of the Filipino gentlemen. And there were more: “Good Housekeeping Philippines,” “Men’s Health,” “Running Philippines,” “Smart Parenting,” “Top Gear Philippines,” “Total Girl Philippines,” “Town & Country Philippines,” “Women’s Health Philippines,” and several others.
But you may say, these are not newspapers but magazines. That’s probably why the newspapers are in trouble. They’ve narrowly define their industry as the newspaper industry. Harvard business Professor Ted Levitt, known for his “Marketing Myopia” industry concept, would say today to newspapers: “Think of your industry beyond newspapers. At least, define it as a print media industry if not in terms of the market’s communication sharing needs.”
There are unmistakable signs that there is a growing realization of this strategic industry visioning and an enlightened appreciation of the change in market segment reading needs. As we saw, it was the specialty magazines that have been the first to take advantage of the change in reading needs. For example of a newspaper that’s now taking a broader view of its industry is the Philippine Daily Inquirer. The Inquirer had decided a year ago to venture into a limited-audience specialty magazine.
In November 2012, its “Inquirer RED Magazine” came out with its maiden issue. It was specific and clear about its targeting a limited-audience reading need. In Twitter, RED Magazine declared that it is “a modern and luxurious monthly” representing the Inquirer’s “response to the growing need for a minimalist yet informative publication.”
Will Inquirer’s specialty magazine venture succeed? That partly depends on our definition of success. If success for a specialty magazine is defined in terms of its award winning subscriber audience reach of 100,000, then the future probably looks rosy. But if success is defined in business terms as attaining advertiser revenues in the scale of Lisa’s Summit Media during its first three to four years, then the reality check says: “By definition, a limited-audience specialty magazine revenue growing potential is limited.”
So how can Inquirer scale up its advertiser revenue growing in the specialty magazine industry? One appropriate business growing model is “by analogy.” That’s basically doing a Lisa Summit Media multiplication of specialty magazines and to say “no” to a single specialty magazine targeting. Under this “by analogy” model, Inquirer has to identify at least two to three more reader need segments for two to three more specialty magazines to be able to scale up to a profitable advertiser revenue level. If Inquirer says “no” to this business growing requirement, it is effectively saying “no” to innovating “by analogy.” Its business future must then look for another business growing model with as much if not more proven track record as the “by analogy” model.
We close then with this conclusion and answer to your last question. Yes, there are opportunities for innovating in those two even longer standing ad media industries of radio and newspaper. But you have to search for those opportunities in the changes taking place in radio listening needs of radio listeners and in the print media readership needs of newspaper readers. Those are “needs segments” that we used to call “benefit segments.”
Keep your questions coming. Send them to us at [email protected] or [email protected]. God bless!
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