Business

“There are three kinds of lies,” British Prime Minister Benjamin Disraeli is said to have said. “Lies, damned lies, and statistics.” Most times, it’s difficult to tell one from the other.

As recent as 2015, everyone was certain of two things: Digital media was the way of the future; print would die as a consequence. The statistics to fit the narrative: falling print circulations, lower readerships, and kindle could do no wrong. All aboard the digital bandwagon.

Then somewhere along the line, the numbers began to diverge. Circulation for print publications were on the uptick, an indie movement stoked renewed interest in tactile magazines and people were falling out of love with their smartphones – dubbed ‘social media fatigue’ – and shutting out the Internet for longer periods of time. Companies like Vice Media and Buzzfeed, once valued at US$5.7 billion and US$1.7 billion respectively, collapsed to a fraction of what investors paid for.

In 2015, at the peak of the digital media hype, Disney paid US$400 million for an 11% stake in Vice Media. By September 2018, the entertainment conglomerate declared a US$157 million write-down on its stake as digital’s blueeyed wonder was riddled by consecutive years of losses, multiple rounds of retrenchments and low content ratings by viewers, especially millennials.

Buzzfeed, touted as the No. 1 media company in online video with a whopping 64.8 billion views across social media last year, also missed revenue projections. It recently cut about 100 jobs in a restructuring of the business, the first of more austerity measures to bring it back to black. Mashable, valued at US$250 million in 2016, was sold a year later for just US$50 million – lock, stock, and barrel. Smaller players like DNAinfo simply ceased to exist.

The digital bubble went ‘pop!’ And not a moment too soon as print newspapers and magazines seem to be undergoing a renaissance after years of wandering the wilderness. First: On circulation figures. On the surface of every reported metric out there, in the battle of digital vs. print, the former wins – hands, nose and elbows down.

Dig a little deeper though and a more nuanced story emerges. Digital media – websites, social media, messaging apps, video platforms – have consistently clocked bigger audience numbers and growing adspend. But for the ferocious print newspapers and magazines still standing, circulation data indicate that the free-fall may, at last, have been reined in. Although the UK’s Audit Circulation Bureau magazine reported a 5% drop in overall magazine print circulation in the last six months of 2017, what they didn’t highlight was that the 5% is a skewed aggregate clocked mainly by two segments – women’s weeklies and hobby magazines.

Bucking the trend are current affairs and specialist magazines which recorded a modest 1% rise in overall print sales. That doesn’t sound like much. Until you break down the numbers and put things in perspective. Here’s what that 1% aggregate comprises: The Economist’s 8% jump in year-on-year (y-o-y) circulation; Prospect magazine’s 37% leap; The Spectator’s 7% y-o-y record historic high in print sales.Another eyebrow-raiser: Men’s lifestyle magazines grew circulation by 6%, as did other specialist interest magazines such as literary (+10%), outdoor adventures (+4%), photography (+4%), holiday and travel (+3%), and equestrian (+2%). In a fair bit of strutting (after all, good news has been rare in this bruising decade for print), The Spectator editor Fraser Nelson wrote: “In our experience, digital has led to [a] renaissance of print. “The website brings millions of people to The Spectator and they can read two articles a week before being invited to subscribe for full access. When they do, the vast majority choose our print and digital package. Then, those who never thought they’d get into the habit of reading a print magazine find that they’re hooked.”

Second: On revenue contributions. Despite the advent of digital media, its contributions to publishers’ revenues are still minimal. 2018 World Press Trends, an annual survey of more than 70 countries, reports that print revenues still account for about 90% of publishers’ revenues. Even in digital-savvy Hong Kong, print is entrenched in the city’s fastpaced living.

“Traditional advertising still holds a significant share of revenue and is predicted to grow in the next five years. The strong performance is attributed to the city’s uniquely dense populations, whereby accessibility to print, TV, and out-of-home advertising is still seen as a powerful and effective tool in capturing mass views in a short duration,” says Cecilia Yau, PricewaterhouseCoopers Hong Kong Media & Entertainment Leader.

The uptick has ruffled some new-media feathers. Online media TechRepublic’s Dan Patterson chimed in: “We see bookstores are up, sometimes, with particular magazines, print sales are up… There is, again, hyperbolic conversation about, “Oh, the web is dead, everybody go back to print”. “That’s not going to happen,” he dismissed.

But why not? After all, didn’t everyone in the 80s predict video would kill the radio star? Radio then evolved – with new formats and a slew of new tech – to outlive its detractors. Print, it seems, is at a similar crossroads. It’s undeniable that digital media drives traffic. Problem is, these companies can’t monetise traffic fast enough. Jason Kint, CEO of Digital Content Next (DCN) said: “The revenue earned from distributed platform does not yet match the investment.” DCN, the trade association for a diverse and powerful group of members – from established media brands such as NBC, Conde Nast and ESPN, to digital natives such as Vox, Slate and Business Insider – surveyed that although revenue from digital platforms increased 37% to US$10.1 million in the 1H2017, it’s a mere 16% of member-publishers’ total digital revenue.

Yet, in Southeast Asia, home to some of the world’s fastest digital adopters, this reversal of fortune in print has yet to arrive. Tumbling newspaper and magazine sales have led to widespread mergers, layoffs and, in the worst instances, shuttering of the region’s mighty. In Malaysia, Malay Mail, a 122-yearold newspaper that ran its first issue in 1896, shelved its print edition to become a pure-play online newspaper last December. Its editor-in-chief Datuk Wong Sai Wan reportedly told staff in a town hall meeting “the old way of doing the newspaper business, of advertising subsidising the circulation, editorial and printing costs, is no longer viable”. Singapore Press Holdings (SPH) – the city state’s sole newspaper publisher – has seen a steady dwindling of all print titles under its stable.

In March 2018, UOB Kay Hian’s research note pointed to SPH’s 12.7% slip in newspaper page count (a “smaller” paper indicates less headcount and signals a more sombre outlook), prompting a downward revision of its revenue estimates by the research house. A bag of contradictions? Perhaps not. In the age of fake news, it all boils down to a single word: Trust. Or lack of it. Circulation is as much about public perception as it is content. Public support surged at “The Gray Lady”, as The New York Times is endearingly called, whenever President Donald Trump cried ‘fake news’ or indulged in his twitter fest of “failing @nytimes”. It peaked again with hard-hitting reports of the Weinstein sexual harassment scandal. The result: NYT repositioned itself as the source for unbiased reporting. Subscriptions and stock price soared to its highest since September 2005 (although print ad revenue continued to decline). On 8 February 2019, it announced that it was now doing well enough for a planned buy-back of its Manhattan office space for US$250 million.

The same cannot be said for SPH, which although not government-owned is perceived as strongly government aligned. It also enjoys a monopoly in a profession that thrives on competition: Who ‘scooped’ it first? Is there an agenda? Can I trust them? The absence of which, begs every reader to ask: “Why pay at all?” A question that hits at the bottom line of all media conglomerates.

Reuters Institute’s Digital News Report 2018, a survey of 74,000 people in 37 markets, found 71% believed that much of the news from mainstream media is biased or inaccurate and publishers have Even the onus of fixing the problem of fake or unreliable news. The report states: “Much of the public does not feel it can trust the news, especially in countries with highly polarised politics and where many media are vulnerable to undue economic or political influence. Consumers are being put off by ‘toxic’ debates and unreliable news. “They are also finding that alternative networks offer more convenience, greater privacy and less opportunity to be misunderstood. As a result they are moving the discussion to messaging apps where they can be sure they are talking to ‘real friends’.”

It explains why no one is feeling particularly bullish about media companies like SPH, turning instead to messaging apps like WeChat or WhatsApp, which they perceive to be more reliable, independent and free of charge. NYT’s stellar recovery is an outlier in what’s been written off as a sunset industry. It follows years of aggressive repositioning of both content and business model – luring subscribers through heavy discounting, more attractive bundling of its digital product with home delivered print, and access to its popular crossword puzzles and cooking recipes. The majority of traditional media is not as aggressive.

Consequently, it’s let slip some golden opportunities. Take, for instance, the recent PR backlash after The Times of London revealed that online ads for brands like Adidas, Nissan, Unilever, Audi, RBS and L’oreal were featured alongside YouTube videos promoting white supremacy, paedophilia and religious extremism. Brand furore erupted as screen captures proved that their family-friendly ads were viewed by millions alongside hate speech and fake news videos. Google, which owns the video-sharing website, pays about £6 for every 1,000 clicks to the creators. This means that aside from keeping these degenerates in business, brands were effectively paying to tarnish their own reputations.

In March 2017, French advertising giant Havas, which represents clients such as Dominos, BBC and Emirates, was the first major global marketing company to blacklist Google and YouTube, pulling all its adspend for UK clients “until we are confident in the YouTube platform and Google Display Network’s ability to deliver the standards we and our clients expect.” That’s £175 million in digital adspend for its UK clients alone. Did print seize this golden opportunity? Far from it. WPP’s GroupM director Adam Smith is adamant that despite the ability to offer more brand-safe environments to advertisers, “no traditional media owner has made as much of this as they should have done.” There was a smattering of revived interest in 1Q2018 as print advertising rose for the first time in eight years, which tapered back into a decline the following quarter. Nonetheless, there are inspiring ideas out there that excite our inner child.

In October 2017, the UK’s Guardian Media Group which owns The Guardian newspaper and online portal, sought to transform the reading experience through use of virtual reality (VR). Bundled within the pages of its newsprint was a free Google Cardboard headset for readers. The headset, used together with a free downloadable VR app, offered readers the chance to visit the scene of a murder or interactively explore subterranean London. An ingenious way to not just read, but experience the news. It seems print is reinventing itself in ways once unimaginable. Who’s to say the future cannot be one of mutual coexistence alongside digital, VR, artificial intelligence and augmented realities?

Far from rolling over and playing dead, print – albeit an upgraded, funkier version of itself – looks poised to whip up a storm. Hopefully, more than just a storm in a teacup.

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