How often do you read a newspaper, magazine or online story which at some point includes a boast along the lines of “as predicted by this publication two weeks ago”?

Are you impressed by this kind of message? I’m not.

It’s what I call self-congratulatory journalism and it’s the media version of self-abuse.

If you call yourself a journalist, stop the practice now.

Nobody cares how clever you are. Nobody turned to the story for information about your brilliance.

Readers want facts. OK, let’s get real and admit what all the research shows — they also want entertainment. “We predicted this would happen” maybe factually correct, but it’s irrelevant and it certainly isn’t entertaining.

The “we told you so” school of journalism is more likely to put people off.

If you want to preen. Go and do it somewhere else. Start a blog.

——

On a personal note: I may have done this in the past. That was a long time ago and before I grew up.

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It’s no longer brave, rash or insightful to suggest printed newspapers will play less of a role in the future. But it counts for something when the scion the world’s largest newspaper company voices the same opinion.

James Murdoch talks about being in “the business of ideas” and says journalism plays a role (phew!) but it won’t be on the scale of News Corp’s broadcasting and entertainment operations.

James Murdoch sees smaller role for newspapers.

According to overseas-based Kiwi blogger Cactus Kate a memo circulated to staff at the New Zealand Herald and other APN titles telling journalists to adopt a “more conservative editorial approach”. The memo, apparently sent to staff from the company’s Sydney headquarters follows a decision to cut the company’s budget for legal action and defence to zero.

According to Cactus Kate, APN instructed editors to spike any stories that could trigger legal action or are otherwise risky.

The New Zealand Herald has never been considered the nation’s hardest newspaper, but Cactus Kate’s APN Chicken Out says the company is no longer participating in ‘real media’.

This creates an enormous news gap in the nation’s largest city – one that television and radio seem equally unable to fill. Bloggers alone can’t fill the void left when a major newspaper decides not to do its job properly.

Update: If you are a journalist or have other relevant skills and would like to take part in a project to develop an online alternative to the Herald please get in touch.

I’ve never believed that print is dead. I’ve always believed that there are two problems with print journalism today. One is lack of advertising, some parts of which will come back, and two, when nobody is buying your magazine or your newspaper, it’s because you’re not writing what people want to read.

Michael Bloomberg, mayor of New York and media magnate quoted in The New York Times following his company’s acquisition of Businessweek magazine.

I’d add a third point to Bloomberg’s list. Print started on the path to unsustainability twenty years ago when corporate spivs started buying media companies and pumping them dry in order to squeeze unrealistic profits from them.

It’s been said before, but you can’t run a media operation like a grocery store.

There’s no question the Internet is hurting print publications, but the technology is simply speeding up a process that was already well under way long before anyone Googled anything.

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Advertising sales revenue is the money publishers make from selling ‘space’ in their titles. Most publishers set aside printed pages or parts of printed pages for advertisers. The number of pages compared to the total number of pages in a public  is known in the business as the advertising ratio. Paid for publications have a lower advertising ratio than free publications.

Advertisements fall into two main categories:

• Display advertisements are larger and often more colourful – they can have highly creative text and images.
• Classified advertisements are smaller and often only text with a minimum of graphics.

Magazines typically sell display advertising by the page, although they offer double page spreads, half pages and other formats. Newspapers will sell pages, but they also sell column centimetres (or column inches). Classifieds sell as column centimetres, as lines of text or in some cases by the word.

The more you buy the cheaper it gets

As a rule, the more advertising an advertiser buys, the cheaper the rate per column centimetre (or page if they are buying magazine ads). So a full-page is cheaper than two half pages and so on.

Publishers also offer advertisers discounts if they commit to buying a series of advertising over a period such as a year or six months. So, booking a year’s worth of advertisements in a monthly magazine is cheaper than buying 12 single advertisements.

Some advertising positions attract a premium rate. On newspapers this would be the front page and maybe the front pages of the internal sections. Magazines typically charge extra for the back cover and possibly the inside front cover. Successful titles can also get away with charging a premium for early right hand pages or other attractive sites.

Agencies and commission

In some industry sectors, advertising is largely placed by specialist media buying companies who develop strategies for their clients and negotiate with publishers. These companies earn their income as a commission. Typically this is between 10 to 20 percent of the booking’s value.

In return for the commission, media buying agencies contract to pay their invoices by a set date after publication – typically a month or so after the advertisements appear.

Advertisers who buy their own space are known as direct clients in the industry. They often haggle over prices, but unless they are large-scale buyers of advertising have less clout than agencies who can buy in bulk. It often harder to collect money from direct clients than from agencies.

Rate cards

Publishers issue rate cards which show the prices or rates for each type of advertisement. Historically they were cards, but now they are usually available online, try Googling the term to see some. Rate cards prices are often, but not always negotiable. They also describe available advertising formats. Depending on circumstances rates shown on rate cards are negotiable.

When an advertiser or a buying agency buys advertising they are usually buying reach that is a publication’s ability to reach so many potential customers.

Advertorial

People in the business use the term advertorial when publishers offer advertising linked to editorial features, or in some cases when a publication’s editorial integrity itself is up for sale.

Advertorial deals come in many flavours. Many publications are more or less entirely made up of advertorial material – if an advertiser pays for space they are given a degree of say over what appears in the publication’s editorial content.

More credible titles wall off areas of content for advertorial projects. These might be clearly marked with terms like “advertising supplement” or “special advertising feature”, but it isn’t transparent to the reader.

Some publishers simply run editorial-style material provided by advertisers and charge for it. Others allow advertisers to send copy for inclusion alongside paid advertisements.

Publishers may or may not allow advertisers to sign off on their advertorial content. Some publishers will have journalists write advertiser-friendly copy for these sections, others keep up a strict demarcation between editorial and advertising.

It’s about the business model

As a rule, free publications are more likely to run advertorial and compromise editorial integrity for commercial consideration than paid-for titles. Paid titles are less likely to take this approach. Some paid titles have little in the way of advertising and charge a hefty premium for quality editorial content. This works best if they can manage a high circulation.

Have I missed anything here? Do you have any questions about how this works?

Other articles in this series:

Where the money comes from: - an introduction to traditional print publishing business models
Copy sales: – how traditional print publishers make money from selling copies

In Publishing business models: Where the money comes from we saw print publishers typically make money from  copy sales and advertising sales. Here we look more closely at copy sales:

Publishers don’t usually keep all copy sales revenue. Typically newspapers, magazines and books sell through newsagents, bookstores and other outlets. Retailers earn a margin of somewhere between 30 and 40 percent of the cover price – which may or may not also include sales tax, GST or VAT depending on local tax rules.

A second slice of the total copy sales revenue may go to a periodical distributor, but more often distributors charge a fixed fee per copy delivered and not a ticket-clipping percentage.

Sell-through rates

Not every copy of a publication sent out to a retail outlet is sold. Publishers talk of the sell-through rate – that’s the percentage sold. Retail outlets usually send unsold publications – often just the masthead – back to distributors to get a refund on unsold copies.

Some poorly managed titles have a low sell-through rate. Others can have a higher rate. There’s a range of rates, the number could realistically fall anywhere between 20 percent and 80 percent.

Some publications sell out – but this is rare and publishers may regard selling-out as a failure because they didn’t maximise sales. Long established, popular, frequently-published titles often have much better sell through rates than newer or irregular publications. That’s largely because publishers have more information to help them plan print runs and know where to send copies.

Revenue lags sales

Copy sales revenue for monthly titles usually takes a month or two to trickle from the reader, through the retailer and distributor back to the publisher.

Given printers often require payment – or a guarantee of payment before the presses role, this means a publisher would need to carry the costs of at least three editions of a monthly title before seeing a penny in copy sales revenue. More in the case of weeklies, less in the case of bi-monthlies and quarterly publications.

This revenue lag explains why so many publishers are keen to sell their titles direct to readers through subscription sales.

Subscriptions are particularly lucrative from a publisher’s point of view for two reasons.

First, the money arrives upfront – usually a year in advance, but some publications offer two-year and even three-year subscriptions.

Second, a publisher gets to keep all the revenue – there’s no retailer cut – but mailing out subscriptions has a cost attached and, often, there’s a small management fee paid if an external company handles subscriptions.

Have I missed anything here? Do you have any questions about how this works? Please add your comments and questions below or get in touch through my contact page.

Also in this series:

Where the money comes from

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Publishers are experimenting with new online business models. So I’m starting a series putting newspaper pay walls, electronic books and other strategies in context. My plan is to show how old-school publishers made and continue to make money, then use this to examine their digital strategies.

This is a basic look at the print publishing business model. You may consider it oversimplified, but the big picture is more important than the details.

Revenue

Historically print publishers earned revenue from copy sales and advertising. Some publishers, mainly in the trade press, rely solely on advertising. Others, such as book publishers, rely solely on copy sales. Most newspapers and magazines make money from a mix of the two.

The balance between advertising and copy sales revenue usually determines a title’s editorial strategy.

The revenue part of a publication’s business model is simple:

Revenue = copy sales + advertising sales

Publishers who rely mainly on copy sales for their income typically spend more on producing quality editorial to attract readers. Advertising-focused publishers often put less emphasis on editorial. In extreme cases, they do away with editorial all together producing publications which closely resemble catalogues.

In part 2, we’ll look at print copy sales.

This post is deliberately short and simple. In future I’ll ask readers have I missed anything here? Do you have any questions about how this works?

Please add your comments and questions below or get in touch through my contact page.

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As newspaper owners prepare to install paywalls and charge readers for online access to news stories, some interesting research puts the issue in perspective. Statistics from NAA Nielsen show newspapers own less than one percent of the time US web users spend online.

More precisely huge numbers of readers visit newspaper sites, but few stay for long or read very much.

Martin Langeveld who wrote the story for the Nieman Journalism Lab says this indicates newspapers need to do more to build online market share. He thinks paywalls and attacking aggregators is only going to harm market share numbers.

My take is yes, there is a danger newspapers could simply fade into irrelevance if publishers don’t find ways to keep readers on-site for longer and read more pages. Ironically making them pay for content is likely to deepen reader relationships, although with far smaller audiences.

NAA/Nielsen stats show newspapers own less than 1 percent of U.S. online audience page views, time spent

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