azeem.azhar

So my Sunday newspaper, The Observer, is rumoured to be under a strategic review. And we all know what that means for a loss-making

newspaper in 2009.

Let’s play a thought experiment and assume that, GMG’s denials aside, the Sunday Times is right and:

The Observer is thought to have lost £10m- £20m a year in recent years, and not to have made a profit since it was bought by The Guardian in 1993 …. [and]

Members of the Scott Trust, the charitable foundation that owns GMG, discussed the plan on July 6. They were shown trial copies of an Observer-branded news magazine that would replace the paper and be published on a Thursday.

How might you go about saving the Observer?

Guardian News and Media made a loss of £30m to March 2009. Revenues were £254m. It would be generous to assume that about 20% of revenues were from The Observer (or about £50m).

Let’s assume that half of £30m  accountable to the Observer, being a low circulation Sunday. This loss of £15m translates to an annual loss (or subsidy) to its readers of £37.50 a year or adding nearly 80p a week to the cover price.

Let us also assume that editorial costs run to about £15m per annum. I have no real verification of those other than the Guardian and FT’s editorial budgets are rumoured to be in the £50 to £75m annual range.

Let’s also assume that

So here are some ideas:

1. Stop duplicating content: Why repost content that is already mainstreamed and published elsewhere? Eliminate duplication. Assume that because of the Internet, the Guardian and rolling news that your readers already know what is happening. Slim news down to a page summary. The reason you write in inverted pyramids is because no-one gets past the first paragraph.
2. Adopt a bar bell content strategy: Most newspaper analysis (and I speak as a former newspaper guy) is trite crap. Deadlines prevent real analysis; and most newspaper journalists are too thinly spread to really get into real depth around an issue. So forget those middle-market quickly hacked out columns or news features. If you can’t give it real depth, then just give it a surface glance. Most of your journalists are really really smart and wasted filling column inches.
   1. That means brief summaries re-written from news wire stories
   2. Really deep investigations which you can string out Telegraph style for $$$
   3. If any journalist files a bylined column after less than 2 hours of writing and thinking, spike it. Bylined columns cost you too much money to have anything but incredibly analytical or melodically written prose. You are better off grabbing a blog post (from anyone) which has proven traction from its depth of comments.
3. Republish brilliant content authored elsewhere: Bizarrely I spend more time reading the NY Times supplement in the Observer than the Observer itself. Many bloggers would happily be republished for free in an august distributor like the Observer–the brand still has value and being in a Sunday paper still has some cultural cachet.
4. Ask DMGT and NWS for danger money Ask DMGT and Newscorp for danger money. Keeping the Observer alive may stave off a competition commission enquiry, so get them to support you.
5. Figure out if you are in the packaging business or in the production business. Today’s economies don’t allow you to do both. I would submit that your assets are brand and distribution not content production.
6. Enforce scarcity on your advertising. Allow no more than four brands to advertise each week but insist that for such heavy presence and for such a deep relationship with your audience then need to pay a signifcant premium. Say £500k per advertiser per week. No house ads. Just four pieces of creative. One for each section: and no more. (I know I am making that number up; but we are talking about reach of 250k to 500k per week, we a guarantee that your advert is noticed and possibly acted on.)
7. Measure the value of your remaining journalists: Measure the value of your remaining journalists and reward those whose contributions drive your audience. (And spike those who don’t.)

Just some ideas.

If I better knew the economics of the newspaper (cover price margin, editorial budget, product budget, distribution costs, advertising budgets, consumer price elasticity) we could build on this and come up with an economic model for the Observer which would allow it not to survive but to thrive.

If anyone has these, use hushmail and…

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