"Groupon is Hastening the Demise of the Newspaper Industry," wrote a daily deals trade pub in April.
It could be the other way around.
The technological barriers to the deals space are pretty low; Shoutback and Nimble Commerce and many other companies are offering consulting and white-label systems to power deal mechanisms. And newspapers have other things many other Groupon clones don't -- large local audiences that are still used to turning to newspapers for coupons, and a sales force with established local relationships.
The Boston Globe is offering its own Boston Deals (promoted on the home page, no less) after trying a partnership with BuyWithMe last year (and SCVNGR, also last year) as it moves to separate its online content from a potentially more lucrative e-commerce business. Boston Phoenix offers deals, Star Tribune in the Twin Cities offers STeals.
It's interesting how newspapers today struggle to make money on content -- putting up paywalls, repackaging it into single-device apps -- instead of going for an easier buck. It seems like the newspapers should be able do a lot with the two things they already have -- local audiences and local sales relationships. They could do daily deals, for example, like The Globe, Phoenix and Star Tribune. Or they could aggregate local deals from Groupon and its numerous clones, Yipit-style. (Maybe they could also print some of these deals in Sunday circulars, for fun.) Or maybe they could try getting some of the classifieds back from Craigslist -- has any newspaper really tried?
But even content -- what if they took their massive and rich content they have accumulated and repackaged it for a different, non-news market? For almost everything a large newspaper touches there's a start-up that is likely doing for more money. School ratings in the Globe? There's School Digger and Great Schools. "Hyper-local news"? Neighborhood Scout.
A lot of tech start-ups are going to great lengths to produce content to attract people to sell their services to. With newspapers, it almost feels like they half-heartedly bolt on random third-party services (job search by Monster, auto listings by cars.com) to attract people to read content off which the newspapers then struggle to make money.
It's easy to be an armchair strategist so I'll shut up, but I like newspapers and hope that maybe the Globe's and other publications' experiments with daily deals will mark the beginning of things turning around for them.
Seen this movie before, in the late 1990s. A company called Auction Universe was going to say newspapers from the erosion of classified advertising, the cash cow for dailies. Newspaper groups invested in it, but the Internet rolled over them anyway.
ReplyDeleteThis is the sequel, and the ending won't likely be any different.
Auction Universe: Sold!
Jennifer Sullivan 11.11.98
Times Mirror said on Wednesday that it will sell Auction Universe, its online auction unit, for an undisclosed sum to a group of eight newspapers seeking to sell more classified advertising on the Internet.
Classified Ventures -- jointly owned by the New York Times Co., Tribune Co., Gannett, Knight-Ridder, Central Newspapers, Washington Post Co., McClatchy, and Times Mirror itself -- will operate the Auction Universe sites.
"Together, the media networks of Classified Ventures and Auction Universe reach more than 70 million people every day," said Larry Schwartz, president and CEO of Auction Universe. "We get access to 140 newspapers in the top 50 markets."
Schwartz said that while auction sites like eBay (EBAY) target lower-priced items and aim for a national audience, Auction Universe will pursue the higher-end auction market for products like antiques. In order to do so, he said, the company must pursue local markets through local newspapers.
Times Mirror (TMC), which publishes the Los Angeles Times, has been selling operations that aren't directly related to newspaper publishing.
At the same time, the owners of Classified Ventures haven't been able to come up with an online answer to the free and popular classified sections on leading Internet sites, such as Yahoo.
The change of ownership could help both groups' efforts.
To date, Auction Universe hasn't made much of a name for itself. It currently has advertising and marketing deals with 30 newspapers and media outlets like the Los Angeles Times.
Classified Ventures, owned by the biggest newspaper chains in the United States, was launched last year as an answer to the looming threat of online classified services like Excite's Classifieds2000. Classified Ventures currently runs a national apartment-finding site and a car site, among others.
Analysts said the acquisition could increase Auction Universe's exposure.
"Being embedded in a gigantic media conglomerate may not be the best thing for a Web site," said Vernon Keenan, an analyst at research firm Keenan Vision. "There may be a better cultural fit with this new owner."
You make some very valid points. Local audiences plus local relationships with clients should translate into decent revenue for newspapers via their on line content.
ReplyDeleteThe challenge for dailies is to be able to do more than just duplicate or re-hash content for their online platforms.
ReplyDeleteThe strategy of emulating Groupon is not a good one for newspapers. They would be better off taking advantage of their core competencies -- expertise on local issues and interaction with local people and businesses -- and the large amount of content that can be produced from this.
ReplyDeleteMany newspapers are little more than printing presses for the wire services; and, although this reduces costs, this is a recipe for failure. Most local newspapers have a near monopoly on coverage of local topics, and this is what local subscribers want to read. Newspapers just need to exploit this.
In additional to the traditional newspaper medium (which many of us enjoy reading in this form), the content needs to be formatted for modern media -- indexed, outlined and hyperlinked so the reader can find what he is looking for and skip over the rest.
I don't think they will turn around newspapers. It requires an action that in the end, forces people to increase spending. As the economy turns south, spending will turn south and papers, with all of their infrastructure and costs, will suffer along side. They would be great if the papers could figure out a solid prospecting model, but they can't even do that for themselves.
ReplyDeleteI think that they can be pretty efficient online but there are still things they need to correct and adapt!
ReplyDelete