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Did your parents read the daily newspaper? I can still remember my father sitting on the living room couch every day after dinner, reading the Cleveland Press. That was the afternoon paper. The Cleveland Plain Dealer was the morning newspaper. Many cities supported two large newspapers. I picked up the paper reading habit from my dad and have read a daily newspaper since I was in high school. But I don’t receive a physical newspaper at my door. And the Cleveland Press folded in 1982. These two facts are not unrelated.
People that follow the news know this: the newspaper industry is under duress. The statistics are stunning:
And the reasons for this demise have also been widely discussed:
There has been much hand-wringing concerning this demise. The deterioration in the United States newspaper market led one senator to introduce a bill allowing newspaper companies to restructure as nonprofit corporations with an array of tax breaks. It has not passed. And the downward spiral continues unabated. Or does it?
New business models often emerge from the ashes of industry decline. When enterprise printer hardware commoditized, Xerox, HP, and others leaned into a new business model called “managed print services.” This forced transformation is exactly what is happening in the newspaper industry.
In May of 2019, The Wall Street Journal published an article titled “In News Industry, a Stark Divide Between Haves and Have-Nots.” The articles states:
“The results are in: A stark divide has emerged between a handful of national players that have managed to stabilize their businesses and local outlets for which time is running out.”
The article states that three papers are dominating the national newspaper landscape: The New York Times, The Washington Post, and The Wall Street Journal. All three are doing this by embracing the digital delivery of their product on a global basis. The figure below provides the trends on paper vs. digital subscriptions to The New York Times.
These three dominant newspapers are also leveraging all the benefits that come with digital delivery:
The state of the newspaper industry is relevant to technology companies selling on-premise technology:
Growing Gap: Just as The Wall Street Journal highlighted the growing gap between the haves and have nots of their industry, TSIA has published a paper highlighting the growing gap between the haves and have nots of the technology industry: “The State of the Technology Industry 2021: The Haves and the Have Nots.” Technology companies selling on-premise technology are more likely to be on the “have not” side of the equation. Read the paper to understand the assertion.
Die Hards: 54% of surveyed newspaper subscribers said they prefer print and 53% of print subscribers have their subscriptions for five years or longer. However, these hard copy die hards are not going to represent growth to the newspaper industry. There are many TSIA members we hear from that state their customers seem very content with running technology on-premise and managing that technology themselves. That is great, but this customer profile will probably not drive double digit growth in future revenues.
Dated Delivery Model: When a newspaper aggressively invests in a digital platform, they unlock new capabilities. They can update editions throughout the day. They can change digital ads on the fly. They can see what articles are trending and promote that content more aggressively. Traditional newspapers have none of those options. The same is true when comparing unconnected on-premise technology to connected or cloud offers. Suddenly, that unconnected on-premise software application looks just about as valuable as a day-old printed newspaper.
Yes, on-premise technology providers have many worrisome commonalities with the media titans of old. We can see from the newspaper industry that many well respected brands did not make the bend through industry disruption. The same will be true in the technology industry.
The newspaper industry proves, yet again, that leaning into the reality of new industry trends is the only path to survival and eventual growth. Over the next decade, that reality will undoubtedly play out in the technology industry.
It is a snowy, crisp morning in my neighborhood. I sip on a cup of coffee and finish reading the sports section of my local paper--on my Ipad. There is a big news conference scheduled by the head football coach later today. I’ll read the recap in the afternoon update.
Suddenly, I see a car slog through the snow. It is the paper getting delivered to my neighbor. She is the last one on the street to stay with the print edition. Today, it arrived two hours late because of the heavy snow. And already, some of the news printed on the pages is woefully out of date.
“The Haves and the Have Nots” was chosen as the theme for this spring’s TSIA Interact virtual conference, taking place May 4-6, 2021. Join TSIA and industry leaders as we discuss the critical business capabilities that will separate the haves from the have nots in the technology and services industries.
 Between Haves and Have-Nots: Local newspapers are failing to make the digital transition larger players did — and are in danger of vanishing. Hagey, K., Alpert, L. I., & Serkez, Y. (2019, May 4).
Post Date: March 4, 2021
Thomas Lah is executive director and executive vice president of TSIA. Since 1996, he has used his incisive analysis, strategic thinking, and creative solutions to help some of the world’s largest technology companies improve the efficiency of their daily operations. He has authored several books, including, Bridging the Services Chasm (2009), Consumption Economics (2011), B4B (2013), and Technology-as-a-Service Playbook: How to Grow a Profitable Subscription Business (2016).
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The Technology & Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.