Different Dinosaurs
John Lewis and Apple have embraced the best of both physical and virtual retail, combining on and offline to profitable effect says News International’s Abba Newbery. And the newspaper market is doing the same – offering a great physical experience backed up by a complementary online engagement.
That the digital revolution is going to destroy old ways of working is now an orthodoxy. Whether you’re in the music industry, high street retail or – according to some – print news, the Internet is sweeping away everything that went before to create a new, online-only paradigm.
If you look at the high street then the argument seems clear. HMV, Jessops, Blockbuster and Comet are all familiar names that have fallen victim to the power of the web. They represented, it is argued, old-school business models that had no place in the world of the Internet.
However, where I think this argument fails is in the attempt to translate it to other markets. It’s true that the Internet has cut a swathe through retail and it’s certainly impacted on the news business but I don’t think the end picture for news is anywhere near as bleak as might be suggested by the high street apocalypse.
Why am I so confident that news will avoid the fate of the high street? I think there are three main reasons.
The first is that a comparison between the likes of Comet or HMV and the newspaper market isn’t comparing eggs with eggs. The retail market that’s been disrupted is the ‘pile it high, sell it cheap’ value-led space, where the lower costs of virtual retail were always going to be an in-built advantage.
Quality stores offering great customer service have thrived. You only need to look at the success of John Lewis or the meteoric rise of Apple stores to prove that. I would put newspapers in the same metaphorical space – newspapers aren’t primarily value led, they’re about offering great content, curated by experts.
What’s also interesting in this comparison is that John Lewis and Apple in particular have embraced the best of both physical and virtual retail, combining on and offline to best effect. The newspaper market is doing the same, offering a great physical experience backed up by a complementary online engagement.
The second reason is that the response to the web has been different in each market. Many of the retailers that are now going under failed to embrace the web with the necessary alacrity. The same can’t be said for the news industry which has been amongst the earliest adopters of some key web developments, from pay-walls to rich media to new advertising formats. There’s still a long way to go for traditional news brands in the online space, but no-one could accuse the industry of sitting still.
Finally, there is a clear mis-match in the business models that underpin retail and the news business. What killed the high street in the end was the crushing weight of retail leases. Physical stores are a necessity in offline retail but they are also what is killing the high street value retail market.
Newspapers have traditionally carried a significant cost base, but new ways of working and technological innovation have drastically cut the cost of production. From new printing technologies to ‘write once, distribute everywhere’ production systems, there have been endless areas where newspapers have adapted to the new world in ways that retailers couldn’t.
None of this is to say that the internet isn’t changing news. Indeed, no-one would deny that it’s bringing about the most fundamental change to the industry since the invention of broadcast media. What I would dispute, however, is that the web spells the same sort of death sentence for news media as it has done for sections of the high street.
The printed newspaper market may be seen as a species of dinosaur by some, but if it is then it’s one that will survive and thrive following this particular meteor strike.