(Limor Peer)

A study just released by the Readership Institute finds that newspaper executives in the U.S. generally feel pretty good about how things are going for the industry in general and for their newspapers in particular.

But, of course, all is not well and fingers seem to be pointing at the Internet: Over 50% of the executives see the Internet as their biggest competition in the next five years.

Well, that's progress!

Just about 10 years ago - when the World Wide Web already established its presence, the Internet's volume has grown by leaps and bounds, and Google and eBay were already on the scene - a similar survey by Editor & Publisher showed that in 1998 the top concerns among newspaper managers were poor customer service, delivery problems, and high prices; the Internet was considered a threat by only 20% of the respondents. In fact, 58% thought the industry has taken "adequate steps" to address the threats posed by the Internet.

Now, the Internet as a major factor for newspaper executives - a threat or an opportunity - comes through loud and clear. We asked questions about competition, challenges, improvements, and reactions, and overwhelmingly the Internet played a major role in all of them.

The focus on the Internet (or more broadly on digital information technologies) is correct, but woefully overdue.

Still, if we accept that newspapers now have a grasp on the nature and magnitude of the challenge - however late - can this comprehension be translated into successful, future-oriented strategies?

I am not sure how newspapers will fare in the future, but as organizations, it seems to me they have to do the following if they are to stand a chance:

1. Understand the new information environment - How do people spend time? What are they doing with media? We were encouraged by the finding that 17% of the executives in our study (the second largest category) thought that the biggest competition for newspapers (after the Internet) is changes in consumer habits. This tells us that there's recognition that newspapers have to figure out how they fit in consumers' lives and that new technology per se is not the issue.
   
   
2. Expand your horizon - We tend to think we are insulated in the U.S., but can learn a lot from other countries (even if they are very different). In Europe, for example, many newspapers successfully transitioned into the digital space (see Vorarlberg in Austria) and, while they are still concerned about the impact of the Internet on their print products, they also worry about free print editorial products (as shown in data collected by Dr. Erik Wilberg in four Nordic countries) - could that be the next challenge to U.S. newspapers? How will you be prepared?
   
   Interestingly, the Nordic study highlights other telling differences with U.S. executives: Nordic executives believe that overall improvements to the paper can be effective in combating declining youth readership (whereas their U.S. counterparts focus more on better marketing to youth). Are you putting resources into the paper in order to attract young people? Should you? If not, is this part of a strategic decision?
   
   We also tend to think that we are insulated as an industry but need to look at other industries and other trends to get an edge. For example, massive multi-player online games are widely popular, especially among young people. News organizations would do well to study what makes them so attractive and what principles can be transferred into the news environment. This is not to say that news should become a game (although that is being tried), just that games have something to teach journalists about engagement.
   
   
3. Get your priorities straight and make a plan - What is it that you value the most about your organization? Is it your loyal readers? Or, it is new readers? Is it the print product? Is it your business model? Is it your mission and values? Figure out what it is you need to do strategically to face a successful future and keep only the essentials and revamp or do away with the rest.
   
   
4. Make the changes you need to make - Three years ago, RI published a paper called "Revolution, not Evolution" - we still stand by that motto. Newspapers need to do it big and do it now to survive in the future. And some do. Making changes can't guarantee success, but not making them will guarantee failure.

By Limor Peer (l-peer@northwestern.edu)
Limor Peer is research director for the Media Management Center and Readership Institute.