Abstract
The print media industry is on a declining trend both in the number publications and revenues. This has happened due to technological changes, poor readership, deteriorating quality of journalism, and competing media. These factors have impacted the entire supply chain of the print media industry. Consequently, there have been job losses, migration to online platforms, and closure of some units.
The industry pundits believe that the print media industry needs readjustments in order to serve changing needs of consumers and create experiences in contents rather than present them. Thus, the supply chain must identify areas of improvements and cost-cutting in order to sustain the industry.
Introduction
According to statistics of Newspaper Association of America, print media is declining at an alarming rate compared to previous years (Newspaper Association of America, 2011). The publishing market has gone down drastically for a while as the reduction of economic activity of newspapers confronts the global recession. The US print media had a 30% decline in income from online and off-line distribution and advertisement between 2007 and 2009.
The decline of the print media is as a result of over reliance on advertising than most newspapers in the rest of the world. According to OECD, 2010, “total advertisement income of newspapers is 57%, as circulation totals to 43%” (OECD, 2010). This deduces that the average revenue of US print media generates 73% from advertisement. Circulation has declined, resulting to 23% drop in 2008 advertisements income.
This poses challenges to newspaper supply chain as buyers are keen on the competition that is on the rise from alternative media such as the Internet. This reflects the dwindling profit in print media business. The drop in revenue and the deteriorating circulation compels the firms to reduce the number of staff and the editorial content. However, this creates more problems of circulation declines with increasing loss of advertisement revenue.
An increase on Internet usage through Google for searching information has seen readers shift their reading habits. They decline to use print media as they pursue exceptional sources of information via varied sources rendering the newspaper and other print media unimportant.
With the growing trend of digital format overtaking print, marketers and publishers should consider embracing more visual and multimedia resources to add to written materials. This will help capture the target audience with appropriate content. This will raise the consumer expectation as they access written information on affordable, faster, multimedia devices. In their messaging, marketers should aim for messages that are engaging, experiential, and comprehendible in an easy format.
Observed Trends in Print Media Decline
In the recent past, the print media industry has witnessed some significant changes that can transform its existence. According to Carr, Google had plans to digitalize print media and consequently reached a settlement with book authors and publishers (Carr, 2008). A number of print media companies have indicated that they will reduce or stop publication works.
At the same time, most magazine and newspaper organizations such as Sports Illustrated, the Olympian, Fortune, and People have shown interests in reducing workforces and reorganizing their staff. This trend has not spared Gannet, the US largest print media publisher. The company announced that it was reducing its workforce by 10 percent (3,000 workers). The Tribune Company had also expressed its intention of reducing its workforce at The Los Angeles Times. 1
There are also declining trends in the pricing of print media products. For instance, some print media companies such as TV Guide commenced prices reductions in reactions to decline in readership, preferences, and purchasing power.
Despite these downward trends, print media still have the audience. However, most consumers prefer visiting print media online publications. This implies that many people still rely on print media but in different formats and platforms for deliveries. Herman Wong has observed that there is a decline in print magazines (Wong, 2009). They have lost advertisers and readers. This trend is also visible in San Francisco Public Library (Main Branch).
The library has significantly reduced its spending on print media.2 They have noticed that most magazine organizations are reacting to changes in the industry by switching to online databases. Still, the library has also experienced reductions in the number of its collections and subscriptions.
Such decline in print publications reflects changes among consumers. Students and library users demand fast access using their computers and other hand-held devices. Therefore, supplies for print media and spending have moved online. This implies that supplies and contracting among organizations in print media have significantly declined, shifted to online business, or ceased altogether.
Why the Decline in Print Media
Economic factors may bear the blame for the current worrying situation of the print media, but there are other variables that offer the explanation to the decline of the US print media. The three distinct reasons mainly are:
Deteriorating quality of journalism
The publishing firms are in quest of making profit, regardless of the circulation decline. Therefore, cutting on the staff number and trimming of the coverage. As of 2009, the number of employees in newspaper newsroom dwindled to 41,500. Such initiatives cause strained work in the newsroom that result to undeniably poor quality of journalistic work production. The American dailies have cut off many of the significant news sections.
As well, noted are the incidents of errors and falsifications that pose questions on the accuracy of journalistic work. Shortages of internal control, facilitated by financial challenges are some factors triggering unreliability and inaccuracy in print media. Staff cutbacks results to reduced editorial oversight and reduced check for accuracy.
This translates to degradation of the print media. Therefore, financial motivation has adverse effects on the quality of the paper and readers are reluctant in consulting the paper due to inaccuracy and unreliable content. Therefore, they opt for reliable and accurate information sources such as the Internet.
Poor readership
In the course of struggling to maintain the paper’s quality, print media feels the impact of the large number of American disinterested population. Decline in readership, shot in the age bracket of 18-24 years equivalent to 42% in 1999 and in 2009, decreased to 27% (Filloux, 2011).
Poor readership is as a result of readers shifting to other means of accessing news like Internet. Terminating circulation in distant areas is another cause for poor readership. This is an initiative to reduce the delivery cost. This deprives the reader the opportunity for information. As a result, readers opt for other means of acquiring information and drop the inaccessible print media.3
With prices of print media going up, and with the current global recession, readers have dropped spending on newspapers. Instead, they embrace affordable media that offer information without subscription.
Failure of the public to accept authority and institutions reinforces the print media decline. In the 20th century, print media had an agenda to set power within the realms of American politics. As the public interest decreased towards authority, the power of the print media to attract readers diminished.
The old generation associates with high readership of newspapers while the young age delves more in technology in quest for information. As the old group continues to age, the readership within the group dwindles. This reflects the dropping trend of the American readership in turn spelling the demise of print media.
Competing news media
News media compete in target for similar resources that include customers and advertisers. According to The McCombs, “Relative Constancy Hypothesis” concludes that customers set aside equal amount of income to news media irrespective of the number they can access (Edmonds, Guskin, Rosenstiel and Mitchell, 2012).
The theory is a basis for claims that decline of print media, revenue from advertisement and circulation is a result of rapid increase in other new media forms like radio, Television and most recent the Internet.
Proliferation of the Internet contributes heavily to the decline of print media. Readership of print media seems to have gone down as readers access information from the Internet. This focuses on the patterns of readership reflecting that though circulation of print is declining, on the other hand, it reaches a larger audience than before via website.
The Washington Post and Boston Globe for example record a high readership of papers on the web than on the paid circulation of the same print newspaper.
Nielson data report an increase in web readership from 60 million in 2007 to 72 million in 2009. A research on the US newspapers reflects undesirable relationship existing between web and print newspaper circulation for varied newspapers. This means that the web related news diminishes the print newspaper ability to maximize profit from circulation.
As print media are yet to recover from the recession, the Internet thrives in attracting customers for advertising due to friendly costs. While the Web pays five cent reaching for the audience, the print media spend a dollar. This indicates Internet responsibility in print media downfalls with regard to advertisement revenues.
The Internet has also taken over on classified advertisements. This has affected the once successful newspaper classified sections in terms of revenues and profits. In a bid to go online with advertisements, the print media have failed to generate sufficient funds to sustain expenses for new business ventures. The advertisement and circulation threats from the Internet indicate that new media are outdoing the print media.
Effects of Decline in Print Media in supply management and contracting
Organizational behaviors tend to reflect dynamics in the industry. The declining trend in print media is risky to the industry. Therefore, most print media companies will strive to avoid risks related to production and supply as most consumers have changed their preferences to online media. In addition, contracting has equally declined in print media. In general, operation management in print media industry has changed. Most firms have reduced a significance proportion of their workforces and budget.
Organizations must weigh risks associated with reductions in print media to their supply chains. Procurement procedures consider sustainability and affordability of materials and buying media has shifted to online contents as they tend to be cheap, and reach a wider readership across the globe.
This trend has caused risks to supply management. Organizations must focus on impacts and losses that occur as a result of decline in print media to their specific business operation. This means that they must avert risks and move with consumers’ demands. For instance, UCPS (Berkeley University of California) puts it that it has experienced difficulties in combating the decline in print and graphic markets since 2001.
UCPS notes factors such as recession and economic situations had negative impacts on their operation and financial viability leading to closure of its three units.4 This implies that such risks are serious and affect the entire supply management to a point leading to closure of the organizational units.
Organizations can plan to minimize decline in print media on its supply management and contracting. A careful planning cannot eliminate risks to the organization but can help avert serious effects such as job losses and operation closure. Managing risks to the supply chain needs a “contingency plan that must indicate possible alternatives and solutions before any problem arises” (Singel, 2000). 5
In this case, the question of “what if the there is a decline in print media” can help an organization develop a contingency plan for minimizing effects to its supply chain.
The case is that there is a general decline from primary suppliers (print media production). This issue will force the organizational decision-making teams to review their logistic processes regularly. Regular reviews of logistic procedures enable organizations to enhance their adjustment strategies, thinking, and reduce chances of possible surprises in cases of dwindling demands.
We cannot look at effects without looking at substitute products, and how they impact supply management and contracting. The Internet and mobile platforms are replacing the traditional print media. Internet giants like Google, Facebook, and Yahoo! among others constantly engage in tactics of ensuring advertisements in print media go online. Thus, the Internet and mobile are the main threats to print media, and its traditional source of revenues (advertisement).
The idea of supply chain management touches every activity in the organization. Thus, business units provide the concept of a value chain in an organization. The production processes go through all these stages and create value in the product. Distribution of print media limits availability to certain geographical regions. Costs of distribution rise and put much pressure on the industry.
Traditionally, print media have depended on advertisement revenues for supporting their operation. However, these revenues decline as online media conquer the advertisement industry. The print media have a challenge of adjusting their prices upwards due to possible consequences of reduced buyers. This implies that print media will have cost-related pressure resulting to the above observed trends of workforces’ reductions, salary cut, and possible closures.
In the supply chain, circulation revenue is hardly enough to contain huge costs of operation in organizations. Advertisers will not use print media with low circulations. Circulation of print media has become a value added service that does not generate revenues to the organization. It requires efficiency through industry expertise for fair logistic services, management, product organization, and distribution.
The print media industry should identify suitable platforms for their products and financial flows in order to align them with the supply chain and other industry practices. The most crucial factor is product flow, which is information flow. Therefore, the print media industry should optimize information flow in supply chain management. Efficient supply chain management is crucial in adjusting the industry to meet consumers changing needs, efficiency, and demands within the print media industry.
The Future of Print Media Industry
Some industry analysts concur that print media is facing its end, but some do not agree with such conclusions. There is a need to review the industry supply chain and develop conclusive understanding of all areas, especially the audience.6 The supply chain management must identify and develop strategic elements that can provide focus and future direction of the print media industry.
The industry should drive its performance. There should be different incentives and performance tracking systems. This will introduce a new culture of performance in media organizations. There are also calls to replace some aspects of traditional supply chain systems such as circulation. The industry should engage in collaboration processes with regards to aspects of distribution, warehousing and elements that media houses can outsource cost effectively.
The print media industry must also attract, retain, and enrich their workforces. This means that the print media must evolve as demands and needs of consumers change. Changes must also affect contents of the print media. The print media must create experience and engagement among consumers.
Creating experience and engagement shall remain a major challenge even if the print media changes its platform to online access. Thus, the supply chain management must create value to ensure that the print media remain relevant even if it is in the form of e-paper (Edmonds, Guskin, Rosenstiel and Mitchell, 2012).
This means that the decline in print media signifies the need for the industry to move to new platforms as the industry demands. Technology is responsible for such changes in the print media industry. This calls for diversification in the supply chain management especially in value creation in different stages and processes involved.7
Appendix
References
Carr, D. (2008). The Media Equation: Mourning Old Media’s Decline. The New York Edition , 1.
Edmonds, R., Guskin, E., Rosenstiel, T. and Mitchell, A. (2012). Newspapers: Building Digital Revenues Proves Painfully Slow. The State of the Newspaper Media 2012: Annual Report on American Journalism , 1-5.
Filloux, F. (2011). The Publisher’s Dilemma. Monday Note, 2(27) , 4-6.
Newspaper Association of America. (2011). Trends and Numbers. Retrieved from https://www.newsmediaalliance.org/
OECD. (2010). The Evolution of News and the Internet. Washington, DC: OECD.
Singel, S. (2000). Books, libraries and electronics. New York: Knowledge Industry Publications.
Wong, H. (2009). Want evidence of the decline of print media? Go to the library. SF Weekly Articles, 8, 1-2.
Footnotes
1 “The American Society of News Editors employment census, released in April 2012, counted a loss of 1,000 full-time newsroom jobs in 2011, a decline of 2.4%” (Edmonds, Rick, 2011).
2 In 2009, the branch spent nearly $385,000 on periodicals, down by almost $75,000 from the year 2008.
3 “Fifteen years after the concept’s emergence, the impact of digital media on the news industry could be added to the list of most quoted examples of disrupted (devastated?) sectors” (Frédéric Filloux, 2011).
4 UC Printing Services closed all three units by April 30th 2010. These units include, the main facility located at 1100 67th St. Emeryville, CA, University Hall room-70, and The Copy Center located at UCOP.
5 Sigel notes that contents that readers need to read as “a whole and that can command an audience will continue to be more effectively disseminated in traditional book form – inexpensive, compact, portable, requiring no equipment to use and easy to handle & read” (Sigel, 2000).
6 See “The Future of Print Media: How to Adapt to the Digital Age” Monday, April 28, 2008 “We renegotiated a number of contracts, eliminated wasteful habits and realigned resources to grow online revenue, stabilize print news, improve quality, create niche products, incorporate local video, online radio and ask what else we can sell from our web presence” (Speakers: Brian, Theodore Olson, and Brian Tierney, 2008).
7 See Newspapers: Building Digital Revenues Proves Painfully Slow “Along the way, newspapers, whatever balance they strike, are getting more serious about identifying and building the elements of an innovation business culture, not just invoking innovation as a mantra” (Rick Edmonds, Emily Guskin, Tom Rosenstiel and Amy Mitchell, (2012).