Analysis from Cyril D. Pereira

It is abundantly clear, in an era of targeted advertising and accountability of budgets, that newspapers are still unable to reconcile with the sea changes taking place in media fragmentation, advertiser shifts and demographic declines. The pricing model for ad rates has not moved.

Like rabbits sitting motionless while the eagle circles overhead, newspapers are hoping the danger will pass. Partly, this is the consequence of a hugely successful business model, built on circulation rate bases that grew every year from population growth and young adults entering the job market. that has served the industry well for 200 years. There is plenty of collective inertia in that.

The problem is that such automatic growth has been interrupted by a combination of the baby boomer generation falling off the edge and NOT being replaced in numbers by new readers. Anybody under 30 years old today is screen oriented with a habit of accessing news and information on-demand.

The gap in circulation rate bases has been filled by spurious circulation practices by way of dumps in doctors' offices, public lounges, hotels and schools, in lieu of single-copy sales.

These creative practices which border on fraud, are widely practiced with great flexibility allowed by the audit circulation bodies. Recently in the United States and Australia, there have been whistle-blowers exposing such scams but there seems to be a collective news media silence about it. that is not surprising.

There is a growing trend in Asia for giving away newspapers for free on commuter trains. The 'travel-to-work' audience has a value and a fairly consistent demographic. Such newspapers do a good job of tight editing, pleasing design and limited pages: a quick, efficient read.

However, we are not seeing high profitability in this model so far. the best achieve modest, wafer-thin profits. Most struggle to break-even. The free papers do catch younger readers who would not pay to buy a traditional newspaper. Generally they have not eroded the readerships of established paid-for newspapers.

The demographic discontinuity will challenge paid-for newspapers to get more out of readers and reduce their dependency on advertisers. The business has to cut waste in the bloated feature pages and sections that enjoyed the colour advertising boom through the 1980s. They have to return to slimmed-down, high-value content and drop the padding.

They have to get more scientific about subscription promotions and reader-retention tactics, to cut out loss-making 'bribing' of readers through expensive gifts and reduce unsold copies. The digital paper has to be connected to the hard-copy product and advertisers, in a dynamic way with improved legibility, convenience and targeting.

We are seeing a clear bi-furcation between quality press and popular press. The middle-market papers are shrinking.

This sharp shift reflects the elite interest in solid analysis and commentary on national and international issues of economics, politics and globalisation impacts. There is a growing focus on health and quality-of-life choices. They have limited time. They want quality information.

The elite press, instead of chasing circ numbers blindly, should accept that the elite in any society are limited in numbers, but powerful in commercial and political influence. They should disconnect the ad rate pricing from circ numbers and charge influence-premiums. There is no point getting confused about the mission by dumbing down, as many broadsheets have tried with mixed results.

How they can leverage their content basket, archives, SMS alerts and e-Newsletter services, to convince elite readers to pay for premium services, is a work-in-progress.

The revenues are marginal at this time but the high- end press has to be openly elitist. Very few have the clarity of purpose of The Daily Telegraph, The NYT or The Washington Post.

Every country has to have its paper of record and public sphere agenda setters. New media in any form, rarely touches the dignity, gravitas and power of a newspaper of record.

That is the leadership quality press has to build on, to redefine advertiser and reader-value. I have no sympathy with mass-market, dumbed-down, alarmist gossip sheets that betray public trust, corrupt the free-press principle and invade privacy. If they die, the world is so much better off.

Page first published: 12.06.2006