How newspapers offer less Unique Value than before

Newspapers used to provide strong Unique Value to their readers. No longer is that necessarily the case. Here is why.

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Let’s start with a statement of belief: You cannot charge for content unless you provide Unique Value to your readers! Never, ever.

Pretty obvious, is it? That may be so, but still it is important to keep in mind.

So what creates Unique Value for a media product? I have my own model, which I have described in this blog post: Five ways to build Unique Value for paid digital content. In short I argue that content providers must fulfill strongly at least one of five uniqueness attributes in order to be able to charge:

• Unique Content
• Unique Convenience
• Unique Usefullness
• Unique Packaging
• Unique Experience

Please do read the original blog post to follow the reasoning of this one.

In my mind this model works well to explain how newspapers are losing grounds as products people are willing to pay for.

Let us start with how newspapers were doing about 20 years ago according to these five uniqueness attributes.

My claim is that a typical subscription newspaper scored high on all the five uniqueness attributes at that time:

• Content was indeed unique. There was no other way you would find the depth and perspective of what your read in your newspaper of choice.
• The newspaper was an extremely convenient format. It was brought to your house in the morning without any effort on your part, and there was no other way you could consume this type of content as you were having your breakfast, sitting on the bus or in your living room. Also the newspaper was the ultimate mobile media consumption device at the time.
• You just needed the newspaper. It was so useful! How else would you find out what was on the movies or what houses in your neighborhood were for sale. Not subscribing to a newspaper gave you a lot of practically hazzle in life.
• Unique packaging. The newspaper put together the last 24 hours worth of news and perspective in an attractive way, making it compelling for you to read the content.
• The fact that practically everybody read the newspaper provided also an Unique Experience. People did indeed feel they were part of society by reading the content. A major value of reading the newspaper was that it gave you a sense of community feeling with other people living in your area. It connected people.

Scoring high on all the five uniqueness attributes a subscription newspaper could charge good money from its readers. In fact many newspapers probably could have charged much more than they did without loosing subscribers. Add to this that most subscription papers in reality were monopoly companies. It was extremely expensive for other companies to start competing – for most readers there were only one choice of paper to subscribe  to.

Now let us look at the situation today.

This graph explains in my opinion the difference:

All the uniqueness attributes are going through dramatic changes. This is already influencing people’s willingness to pay for newspapers. And the trend is continuing:

• A typical subscription newspaper is nothing near as strong in Unique Content as it used to be. The reason is obvious: News has become a commodity and content is abundant on the web. People can get most of the content in a newspaper for free on the web in addition to similar content from numerous other sources. And this trend is accelerating as more content is becoming available on the web and aggregated in more useful ways.
• Unique Convenience is still a very strong selling point for a subscription newspaper, but less so for a newspaper sold as single copies in the kiosks.  For many people there is a real benefit of having the newspaper delivered to their home in a very flexible format. In fact I think this is the main reason why many people still choose to subscribe to a newspaper.
• Newspapers are loosing ground quickly when it comes to Unique Usefulness.  The reason is  that numerous good online services are serving many of these needs much better, often based on users helping each other. You are no longer dependent on subscribing to a newspaper to check houses for sale or find the latest weather forecast just to name two examples.
• Newspapers still have a Unique Packaging of news, with the physical limitation of the content package and well planned presentation as the major benefints. Yet even this uniqueness attribute is not as strong as before.
• Still many newspapers provide a Unique Experience in many ways, for instance by being a glue in the local society and maintaining strong brands. But also this benefit is diminishing quickly as new digital platforms arise. Today Facebook can be as important connecting people locally as the newspaper.

So where does this bring us? My conclusion is that newspapers are experiencing a downward trend on all the five uniqueness attributes and that this trend will continue. This explains why the number of subscribers is going down in most countries. Of course this will not happen to all newspapers. Some are able to offer truly unique content for niche groups while others, such as Wall Street Journal, are being perceived as providing especially useful information for its readers. The main trend can not be overlooked, though.

This is of course generalizing, but I think for most subscription newspapers today the strongest benefit is the Unique Convenience. This is even a more important driver for willingness to pay than the content itself. (In fact, it seems to me that many newspaper editors tend to overvalue how unique their content is when it becomes disaggregated in the digital world)

In a speech I listened to recently Torry Pedersen (Twitter: @torryp), the CEO of Norway’s (still) largest newspaper VG, used the expression “situational dominance” to explain the benefit many newspapers have enjoyed.  He pointed out how a subscription newspaper like my own employer Aftenposten traditionally has dominated the “the breakfast situation” in people’s life by actually carrying the newspaper to the homes of the subscribers in the early morning.

This type of “situational dominance” will get weaker in the years to come, and thus challenging the strongest benefit of newspapers even further. The reason is that new digital platforms are becoming as convenient to use in the situations where newspapers have dominated. Many might as well choose to read the news at breakfast on smartphones, Kindle, iPad or similar devices. And the same content is becoming accessible in new situations as well, like in bed with your mobile phone.

So we can just start to charge on iPad, can we not? Sure, but remember this platform also will offer content from thousands of other sources, most of them free. The “situational dominance” of a single media player is lost and as such also part of the benefit newspapers enjoyed in Unique Convenience. To be able to charge on iPad I think you will need to hit on other uniqueness attributes as well, such as offering the readers a truly unique experience.

It is all about creating scarcity in a content world of abundance. Can it be done? I think so, but not by copying the models of the past.

Tagged as: E-readers, media, news, newspapers, Unique Value, user payment