We are delighted that Las Vegas is serving as host to this year’s annual gathering of newspaper and marketing executives, sponsored by the Newspaper Association of America. And I’ve noticed that the newspaper industry and the city of Las Vegas have something in common lately — we’ve both generated national headlines about our “brands.”
As your public and tourism officials have worked to establish Las Vegas as a world-class entertainment destination with major attractions in casinos, fine dining, shopping and nightlife, there have been questions about Las Vegas’ ability to serve as a serious venue for trade show, convention and corporate meetings in the wake of a few high-profile cancellations that made national news.
The newspaper brand has faced scrutiny on its own. On the one hand, it is a medium seeped in tradition, integrity and authority, and we’re proud of those traits. On the other hand, with such traditional values connected to our brand, some question whether we are too slow to change and survive in this competing media landscape of emerging technologies.
Pessimists see newspapers as a declining ink-on-paper summary of news and information, dropped at the doorstep every morning or waiting to be picked up the newsstand. Optimists see an ink-on-paper product at the center of a collection of multi-media platforms, reaching different kinds of people with diverse kinds of content, how, when and where they want it.
Which view is correct? Old industry or new industry?
Right now, they both are. We are in the process of moving from one to the other. It’s a time of transition and transformation. Challenges abound, but this also is an exciting time for newspapers. We are not just standing still. We’re innovating, creating, pushing into digital platforms and developing new ways to serve advertisers and consumers.
The NAA meeting this week, mediaXchange, is proof of the dynamic nature of today’s newspaper companies. In fact, more than one-third (35 percent) of the vendors exhibiting at this newspaper trade show represent emerging technologies.
Consider these other facts that newspaper critics and promoters of other media tend to overlook:
1) Digital revenues for newspapers have already become an important part of the sustaining business model for newspapers. For example, in 2008, revenue from newspapers’ digital products generated about $3 billion, and I expect that revenue will continue to grow with newspaper innovations. This revenue stream will need to grow with prices reflecting true value — but it’s a start.
2) Day in, day out — print newspapers remain one of the largest and most vital communications media around — more than 100 million Americans read a daily paper, and 115 million on Sundays. In today’s world of fragmented media, that’s a huge (and very loyal) audience.
3) Unlike many fledgling “new media,” those papers generate profits. According to industry analyst John Morton, looking at newspaper company results through the first three quarters of 2008, the group as a whole had an average operating profit margin of 11.3 percent — not near what it used to be, but comfortably better than profits of most non-media business. As Morton says, “In this environment, that is an achievement.”
Without ignoring the challenges newspaper companies face (which are many and daunting) it’s important to keep things in perspective. We’ve already witnessed several waves of failures of new dot.com businesses; entities as cutting edge as satellite radio networks are struggling; and several of yesterday’s hot mobile telephone players are today’s cratered investments. In contrast, for all the challenges, the newspaper industry perseveres.
It is gratifying for those of us who have been pushing back against a sea of critical jibes about our business to see that the current has swung round. We are energized by the new wave of enthusiasm that celebrates the enduring values and the value of the news organizations we have built, that concedes how important it is to everyday living to be able to access information, reviews and other data in newspapers and hosted on newspaper Web sites. All of this, without even a mention of the critical value to our society and how we govern ourselves.
That sense of connection was mirrored in iconic images from the day after the recent presidential election — the lines of citizens stretching for blocks outside newspaper offices, all eager to purchase their own piece of history — a front-page newspaper story of a new president with his message of change and hope. A story made a little more real, a little more tangible, thanks to the credibility, the trust that newspapers have earned. Connection that you see as well when companies and organizations take out full-page newspaper ads to communicate directly with their consumers and constituencies.
As an industry, we are committed to maintaining that trust and connection, while we find new ways forward, in service to consumers, to advertisers, to our communities and to our readers and users.
They like to say here that what happens in Vegas stays in Vegas. With a few possible exceptions, I hope not. I hope the executives who have gathered here this week will go home with new ideas, innovations and practices for their newspapers, along with a realization that the need to gather in one venue and exchange ideas with colleagues was well worth the trip to this exciting city.
John F. Sturm is president and CEO of the Newspaper Association of America.