The Independent is going digital, scraping its print version to save costs and attempt to become a world-class world-wide digital publisher.
Phil Hall, joint head of investment for Mediacom UK, said in The Drum:
The print sales are low and obviously there is a production cost involved in producing print and this is part of the reason for their shift to a digital business. While they have a decent digital subscriber base, the challenge as it is for any digital business will be to monetise that. There is certainly a possibility that they will look at a subscriber model, or they can hope that the quality of their journalism is such that they will generate more traffic and get a greater return from advertising.
The move to ‘more digital’ or ‘digital only’ content is clearly an attractive trend for a every business that deals with content. Digital production, done right so it can be repurposed, can be more cost effective than print so it’s easy to see why any content producer would shift to digital over print. But, as The Independent shows, its not quite that simple. Just being more cost effective in production doesn’t necessarily lead to greater revenue in consumption. People may well consume more content via digital means, but they do so in a very different way. Articles are read, photos looked at, and videos watched with a fast-paced throwaway approach. On the other hand, we have an innate feeling that words and images in print are somehow immortalised and so more precious, that we should take time over reading them, and pay them more attention.
This difference in consumption is what makes the digital business model so difficult to make profitable. As Phil said above, The Independant has only two potential income streams: subscription and advertising. The Subscription Model is a difficult one to get right for a newspaper as it needs to make its best content publicly available to show its quality and value, in which case subscribers are left with paying for lower quality content, and the Advertising Model, which is under increasing pressure because of the rise of ad blocking software.
Other types of organisations face the same issue. A charity could quite sensibly choose to move more of its print content to digital formats, and justify this move as saving print and distribution costs. But that fundraising campaign flyer that drops through your letterbox might hang around longer and be taken notice of more than the banner ad that you didn’t even notice as you were reading an article on The Independant’s website.
I’m a believer in all things digital, and of the digital transformation of organisations and society, but I also believe in knowing what you are trying to achieve and understanding the end-to-end process and impact of decisions like ‘going digital’. Perhaps digital, with its limited revenue models, will force organisations to accept more streamlined and smaller business models. Perhaps it will force businesses to accept lower revenue in return for greater cost-effectiveness. Perhaps ten percent profit on one million pounds turnover is better than one percent profit on one hundred million pounds turnover.