In-house local development.

Partnership with global brands.

These are two themes that are emerging as drivers of our industry’s growth.

Case in point: The Record, Scotland’s dominant national newspaper, is now under pressure by the under-priced and printing-plant enhanced Murdoch-owned Sun.

The Record is now under pressure to expand at a time when U.K. newspaper ad revenues are falling faster than the country’s already dismal circulations (the worst in Europe).

The Record’s management is working hard to respond, launching efforts aimed at innovation and product development. It has also cut costs, by outsourcing, and rolled out zoned editions.

Last year, it also introduced Record PM, a free distribution evening “editionet” of the daily. Even though the edition is free, it doesn’t cost a lot to produce, instead relying on the paper’s current editorial, advertising and circulation resources.

The edition is thriving. It expanded The Record’s readership, especially among the young, and it attracted additional ad revenues.

The Record’s second move was to launch a free weekly newspaper. Two journalists were transferred from The Record’s newsroom (saving redundancy costs), and two more were recruited.

To contain editorial and production costs, The Record outsourced its design and copy-editing to an Indian company. The result: Readers like the paper and, financially, it’s a commercial success.

Powerful force

These examples prove the notion that newspapers can, if they wish, be an astonishingly powerful and enterprising force.

But until now, many publishers have been obsessed with retaining their single version of what they do. Moreover, many remain over-protective of competencies, such as printing, page design and copy-editing, that can be done just as well elsewhere at a proportion of the cost. (Want proof? One London business weekly outsources all of its coverage to a third-party, retaining only opinion and analysis within its own newsroom.)

The Record realized that by leveraging its core company resources, the cost of innovation is little more than coming up with a good idea. By maximizing its core local brand and exploiting its market penetration, the Record was able to attract new readers and new revenue streams.

At the other extreme, a growing number of North American newspapers are striking deals with Yahoo and Google in bids to capture their local markets’ digital space.

The feedback I have received thus far is very positive. Yet suspicion remains: “They are trying to destroy us.”  “They’re stealing our content!” “We need to establish rules of engagement!”

It’s all nonsense.

Flexible

There’s room for all of us out here, as long as we’re prepared to become as fast, flexible and innovative as our competitors.

Other industries are discovering the need to recognize where it’s right to do it yourself, where to outsource and where partnership — often with competitors — might be more advantageous.

The newspaper view of one solution (us), one product (ours), one company (mine) is moribund. Our customers are as eager for a range of solutions from us as they are from Colgate and Mercedes. They are seeking solutions in time and place, and they won’t all be branded as our newspaper brand. Outsourcing is one central industrial theme that we’ve been slow to adopt. Partnership is a version of that.

Maybe our partnership deals with Google and Yahoo are outsourcing deals for them. But if they help us grow our business in our local franchise, they are as important as versioning and diversity.
 

Jim Chisholm is joint principal of iMedia, Ifra’s joint venture advisory service. He can be reached at jim.chisholm@imediaadvisory.com.