News Publishers Get into Social Shopping

The McClatchy Company is getting into the social shopping business, offering daily discount offers on its local newspaper websites. McClatchy is the third largest newspaper company in the U.S., publishing more than 30 daily newspapers, including The Miami Herald and The Fort Worth Star-Telegram, and 43 non-dailies.

The New York Times and Denver Post also are in the business. Think about the implications, though. Traditionally, newspapers made made money from advertising and subscriptions, mostly from advertising. The classical revenue mix for subscription based newspapers is 30 percent from subscription fees and single copy sales and 70 percent from ads and classifieds. See

http://blog.business-model-innovation.com/2009/09/who-says-paper-is-dead-business-model-innovation-in-the-newspaper-industry/. The big problems are that classified advertising has been hit very hard by Internet alternatives, while display also has suffered a major drop.

The classical revenue mix for subscription based newspapers is 30 percent from subscription fees and single copy sales and 70 percent from ads and classifieds.

A new book published by Oxford University essentially argues "too much reliance on advertising" is the problem newspapers in some countries face. The study, commissioned by the Oxford-based Reuters Institute for the Study of Journalism, examined newspaper industries in several countries, including the US, UK, Germany and Brazil. http://ipcarrier.blogspot.com/2010/11/what-ails-newspaper-business-model.html.

But one struggles to think of what new revenue model could be found. Many newspapers operate direct marketing or direct mail operations. The revenue model there is marketing services, not news. It remains to be seen whether a newspaper can actually shift its revenue model enough in the direction of marketing services to sufficiently replace today's newspaper advertising.

Some of us think advertising simply isn't going to be sufficient, over the long term, whatever other sources become more important. In many cases, only commerce--people selling things--has enough financial heft to replace advertising. Where the old model was to "aggregate and audience to sell advertising," the new model might well be "aggregate an audience to sell a product or service."

That will be different. Less activity will occur on non-targeted sites and channels, but much more will happen on targeted, specialized sites and channels. Different kinds of content will sometimes be produced, in that regard. But commerce is a big enough human activity that lots of companies have clear incentives to spend money to make more sales.

Major News Publishers Jump on the Daily Deals Bandwagon