Keeping print profitable

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It is no secret that the majority of newspapers are losing money across the Western world. Traditional print media is suffering from digital competition and remains unsure how to take advantage of the opportunities brought about by websites and smart devices.The issue for newspaper and magazine publishers is that the digital side of the business is not growing at the same rate as the print side is decreasing. One newspaper which adopted a radical and innovative approach to the problem is the London Evening Standard. Cutting Costs and Increasing Profit MarginsBetween 2008 and 2009 the Standard made a loss of more than £28m and was subsequently sold for £1. The new owners introduced numerous cost cutting measures and reduced the distribution cost of each copy from 36p to less than 4p. The newspaper also switched to a freesheet model and saw its circulation levels nearly triple to 700, 000, in two years. The reduction in costs coupled with the increased advertising revenue mean the Standard is expected to make a profit this year.Encouraged by the Standard’s success, Time Out magazine has also switched to free distribution in the hopes of increasing its circulation from 55, 000 to 300, 000.  The objective is to cut distribution costs and benefit from increased advertising revenue whilst revamping the magazine’s digital offerings.Innovation and SuccessAlthough it is unlikely that newspapers in their current format will exist in the next 10 years, it is possible to drive growth in the publishing industry through cutting costs. This approach allows companies to balance out the losses incurred on the print side with the benefits associated with digital offerings. However, price alone cannot ensure the sector’s success and innovative thinking remains essential.Speaking at the Media360 event, Jon O’Donnell, Commercial Director at the London Evening Standard offered a word of warning to those looking to emulate the success of the Standard: “We seem to spend 90% of our time on price, leaving just 10% to focus on ideas – this can’t be the right balance going forward.”

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