WHEN Amazon billionaire Jeff Bezos bought the Washington Post early last month for $250m, the question everyone wanted the answer to was, why would a new media guy invest in old media?
Similarly, why would the reclusive owner of Liverpool Football Club and the Boston Red Sox, John Henry, buy the Boston Globe for $70m from the New York Times, just a month before? Why indeed would the world's wealthiest investor, Warren Buffett, spend $400m buying a portfolio of newspapers across the US in the past year.
In his annual Berkshire Hathaway shareholder newsletter, Buffett wrote: "Papers delivering comprehensive and reliable information to tightly bound communities and having a sensible internet strategy will remain viable for a long time."
It's a view Independent News & Media, publisher of the Sunday Independent, takes to heart. The Irish media landscape has been challenged as much as any by the rapid changes in readership across print and digital platforms; perhaps more so considering the astonishing array of titles on news stands in this country, many of them regional variations of the British newspaper giants.
Yet INM, which also publishes the Irish Independent, the Herald and the Sunday World, and has an interest in the Irish Daily Star, remains optimistic regarding the future of newspapers in the new media environment.
In common with many of our competitors, our challenge is to keep pace with the rapidly evolving consumption patterns of our readers and to create a sustainable future for quality journalism.
Earlier this month, the latest Audit Bureau of Circulation for the six months to June 2013 were published. Declines, though evident, were not out of kilter with the recessionary market in which we operate. Indeed, relative to our competition, the circulation of our flagship titles, the Irish Independent and Sunday Independent, remained stubbornly robust, just 3.9 per cent and 2.6 per cent respectively behind the prior period.
By any measure, this was a strong outcome in a world where printed newspapers are under pressure worldwide and where competing titles such as the Irish Times and Sunday Business Post have endured falls of 9 per cent and 6.7 per cent respectively.
Notwithstanding this resilience, INM has little ground for complacency. We cannot rely on the fact that the Irish Independent and Sunday Independent have a unique reach and connection with communities in every corner of the country and in every section of society.
Why then my seemingly contrarian and positive outlook for newspapers? My reasons are twofold: firstly, as Buffet has observed, newspapers need a sensible internet strategy and that is borne out by our experience at INM where independent.ie is already the leading news and information website in Ireland with 5.1 million unique visitors in July – up 39 per cent on the prior year – and 59 million page impressions, a rise of 37 per cent.
This achievement is associated with an exceptionally strong brand identity; a third-party study, commissioned in July, in which more than 2,000 users of the site took part, revealed almost unheard-of loyalty to the Independent brand.
It showed that independent.ie has an 'intense' relationship with its readers, as they are nearly three times as likely to access the site several times relative to internet news readers in general.
Some 84 per cent of independent.ie users use the website at least once a day, while 40 per cent of users rank independent.ie as their first rank of importance for online news – ahead of Rte.ie, Irishtimes.com, Journal.ie and BBC.com/News.
The second reason is that INM has recently begun implementing a co-ordinated digital strategy to build on the strength of its brand and prepare for a future in which digital platforms become increasingly important.
Print readers are still hugely important to publishers such as INM, and will be for a long time to come. But the emerging audiences forming around the new digital platforms must be catered for to build a sustainable business into the future. For many people, news is no longer just what is edited and packaged in a once-a-day newspaper edition. They get news how they want it, when they want it and where they want it.
The new mantra is that news is social, mobile and real-time. Already up to 40 per cent of users of independent.ie are accessing the site from smartphones and tablets, either commuting or moving around at home – the rise of the "second screen" in the evening is one revolution that is touching the television industry as much as the newspaper industry.
A significant number of people now get much of their news either directly or through links shared on social media sites such as Twitter or Facebook.
We can never take this audience for granted, and we are being more responsive than ever.
To prepare for this shifting audience balance, INM is undertaking the biggest ever reorganisation of our editorial workforce, appointing a new Editor-in-Chief and a Group Head of News to support the editors and marshal these resources across our three national titles, in print and digital. Intensive training has already begun, to equip reporters, photographers, editors and production staff with new, digitally oriented skills.
One such skill is the ability to shoot and edit video on iPhone, and to present to camera. Bell Labs in the United States estimates that the ratio of video watched on demand (as opposed to rigid TV schedules) will shift in the next seven years from 30:70 to 70:30. Much of the new video content that audiences will consume in 2020, according to Bell, will be created by companies such as INM, once only in the print business.
While advertising will continue to be an important source of income for the digital products, INM has also embarked on one of its biggest-ever development projects to introduce a "leaky" paywall later this year. Light users of the site will continue to read the website for free; heavy users will be asked to subscribe, and will be given an exciting new tablet app set to be launched at the same time.
As the leading media company in Ireland, we are preparing ourselves for an increasingly digital future. We have fantastic journalists across all our titles whose skills can be better used across titles and platforms. Our aim is to become an integrated, digitally adept, multi-platform news organisation.
At the same time, we are not losing sight of our print products and we continue to invest in our market-leading products, to very good effect, as evidenced by our recent readership numbers.
Looking to the future, it is clear that no one media company has all the answers to a sustainable future that pays for the quality, independent journalism that is so vital in a society such as ours. Similarly, no one platform, not even one with the longevity and mass appeal of newspapers, can expect to survive without adapting to the needs of that society. INM believes it is taking the appropriate steps to safeguard that future, increasing our versatility, investing in digital and continuing to enhance the standing and appeal of our newspapers for generations to come.
Vincent Crowley is Group Chief Executive Officer, INM