Disruptive innovations for newspapers

via Disruptive innovations for newspapers by Brett Chulu Zimbabwe Independent October 25, 2013 

EITHER disrupt or get disrupted. These are the only choices available for Zimbabwe’s print newspapers. Our media houses have cottoned on to digital platforms as media for delivering news content.

If there is one thing our local media industry has done well; it is not leaving it too late to experiment with alternative news delivery platforms such as mobile telephony and the internet. However, a mere change of platform is no guarantee for success. Merely embracing technology may not insulate newspapers from disruptive forces. This is precisely the counsel this article is proffering.

To turn digital platforms into viable concerns, media business strategists may need to explore ideas from the phenomenon disruptive innovation. A word of caution is in order. Casual readers may gloss over the concept of disruptive innovation it is not general innovation. It is a specific phenomenon with carefully established patterns.

A disruptive innovation is a product or service that is so simplified and affordable such that masses of people who are either poor and/or unskilled have access to afford that product or service for the first time. Complexity makes products or services too expensive and too complex to be used by the masses.

Disruptive innovations engineer complexity out of a product or service so that it appeals to excluded masses from an affordability and user-friendliness viewpoint. There are many facets and nuances within the disruptive innovation strategy genre. However, this article will focus on one aspect, ie how to engineer one in the newspaper industry.

Technology or digital myth

Acquiring a technology is not equivalent to having a disruptive innovation. Technology is just a disruptive enabler. In fact, you might not need technology to come up with a disruptive innovation. Where technology such as the internet and mobile telephony are employed, media business strategists still need to find ways of taking complexity off the newspaper product so that they appeal to masses of non-media consumers. Disruptive innovation, in the media industry context, is about either creating new demand from non-consumers or turning infrequent consumers into regular consumers. This is the crux of the matter. Anything less is tinkering with the periphery. So what are some of the disruptive paths newspapers can follow to unleash their own disruptions?

Business blog model

Many disruptive innovators are not even aware that they are disruptors. Unwittingly, they apply disruptive innovation principles. The media industry seems to have a number of these. The rise of commercial blogs provides a laboratory for analysing one of the possible disruptive paths that can help seed ideas for large media houses to craft their own disruptive agendas. Commercial blogs use the advert revenue model based on providing exposure to brands to followers of blogs. What we learn from this phenomenon is the importance of focus. Successful news blogs are focused on delivering one strand or genre of news.

Three lessons can be gleaned from commercial blogs. First, focus allows the blog to remove complexity. Removal of complexity is a prerequisite to establishing a disruptive innovation.

Second, focus allows a blog to develop deep expertise in the subject in question. That turns a blog into an authoritative voice on its subject of specialty. What this means is that when people want to know about a subject, they will make the blog their first source.

That drives traffic onto the blog of people who share common pain points. In theory, that kind of authority can be monetised in two ways. Either the blog sells advertising space to brands that target people drawn to the blog or the blog can sell its content on a pay-per-view model. The pay-per-view model will be viable to the extent that the content found on the blog is very compelling and unique. Uniqueness creates scarcity. Scarcity allows the proprietors of unique content to float premium pricing points. The logic, in simple terms, is that when one offers unique content, people have no alternatives to turn to.

Third, focus, through elimination of complexity lowers the cost structure, allowing price points low enough to attract non-consumers. A combination of unique news delivered at ultra-low prices can woo in large numbers of non-consumers. The game then becomes a volumes one.

One way in which newspapers can self-disrupt is to develop specialisation and focus like blogs. If say, an online paper focuses on three areas, developing a solid reputation in the market, it can attract huge volumes of hungry news hunters. Imagine an online paper that develops a reputation for releasing exclusive investigative journalism stories that cannot be found anywhere. Who would think twice about paying to access that paper? What if your investigative journalism is so good that Zimbabweans in the diaspora and other non-Zimbabweans die to feed their eyes on? Can’t you monetise this?

Can page visits be monetised? Using extrapolation, normally, the size of social media followers is a fraction of monthly page visits. My calculations based on popular Zimbabwean sites, on average, for every Facebook ‘like’ there are 20 monthly page visits to the site. For an online paper with say 100 000 Facebook likes, it means that the online version of a paper gets about 2 million visits every month.

If the online paper charges a flat fee of 10 cents per month to visit specific news pages where it has built a solid reputation, it can make a cool US$200 000 per month. This can be combined with an ad model that provides advertisers with specific web visitors’ habits and characteristics.

Reflect on it

One way of applying disruptive innovation for online newspapers is to specialise in one to three news areas and hive off other news areas where they are not competitive. Commercial blogs are a good case study for the big media houses.

Chulu is a strategic HR consultant pioneering innovative HR practices in both listed and unlisted companies. — brettchulu@consultant.com