Publishers can survive digital kryptonite

Clark Kent has quit the Daily Planet newspaper, according to the latest Superman comic, heading for the blogosphere as his editor dubbed print "a dying medium". But Superman's journalist alter ego is not alone. Tina Brown, one of the most talked about magazine editors of her era, is ending Newsweek's print edition after 80 years, declaring that the print/digital "tipping point" is upon us.

Ms Brown's decision seemed to confirm for many what she called the "inexorable trend" of print decline – for magazines, newspapers and books – in the digital age. Yet the dynamics of that decline and the strategies for managing it deserve closer scrutiny: for all the predictions that print may disappear, remarkably few publishers have switched to an all-digital strategy.

In 2009, when the financial crisis proved the last straw for the Rocky Mountain News, most analysts predicted a far bigger toll. The Seattle Post-Intelligencer went online-only. The Christian Science Monitor moved to weekly printing. The Philadelphia Inquirer, the Chicago Tribune and Los Angeles Times went bankrupt.

The pressure has been intense: Newspapers have lost nearly a third of their share of advertising budgets in four years, as Alan Mutter, a newspaper analyst, noted this week. But now, as the Tribune titles prepare to emerge from Chapter 11, it is striking that not one of the titles has disappeared. Their cost bases have shrunk, but the worst fears about the fourth estate have not been fulfilled.

It is too easy to blame every failure on the print to digital format shift. Across media, from broadcasting to publishing, business model changes are widening the gulf between strong and weak brands.

Newsweek's rapid descent contrasts with more stable stories at competitors including Time, The Week and The Economist (half-owned by the FT Group). Analysts even predict that magazine publishers are about to start growing again. eMarketer, a research firm, sees US print advertising budgets staying steady, slightly above $15bn, between 2010 and 2016. Growing digital spending in that period will lift total US magazine advertising from $17.5bn to $19.2bn.

The outlook for all advertising remains uncertain as analysts bring forecasts down again after a tough third quarter, and merely hoping for an upswing will not save those publishers that still rely too heavily on advertising.

Newsweek, like many magazines in a country where news-stand sales account for only a small portion of total revenues, has heavily discounted print copies to guarantee a large audience for advertisers.

As ad revenues started to tumble it did little to raise circulation pricing and, even as its print subscribers halved to 1.5m, it found only 41,000 digital subscribers. In contrast, the New York Times had 566,000 digital subscribers in September.

Many publishers are finding more success with digital subscriptions. The Audit Bureau of Circulations reported this week that digital editions accounted for 15.3 per cent of US newspaper circulation from April to September, up from 9.8 per cent a year earlier. As a result, the 613 newspapers it measures recorded a fall in daily circulation of only 0.2 per cent, and Sunday sales actually rose by 0.6 per cent.

But as traditional models shift, there are still few examples of digital-only success. Alan Rusbridger, editor of The Guardian, dismissed in October a report that his newspaper may drop its print edition with a telling tweet: "Numbers for going digital only & junking print just don't add up."

Numbers for all-digital news brands such as the Huffington Post are hard to come by, and if Newsweek thrives as a digital-only product it will be bucking the trend. When Rupert Murdoch launched The Daily as a tablet newspaper in February 2011 he said it could break even with 500,000 subscribers. By July this year, it had barely more than 100,000 subscribers and was laying off almost a third of its staff.

It is tempting for publishers to focus only on digital strategies, but they must also think about how to manage their declining print businesses and how to keep up the value of their journalism, regardless of medium. The music industry discovered this to its cost. For a decade after Napster launched, executives scurried to find new digital business models, neglecting the CD even as it represented a majority of their revenues. Newspapers and magazines risk repeating the mistake.

For more than a decade, investors have asked publishers what their digital strategies are. It is time to ask about their print strategies, too. Perry White, Clark Kent's editor, was right to say The Daily Planet's only hope was to "give the people what they want ... on the television, or QPad [sic], or cellphone." Had he added "or newsprint", maybe Superman would have stayed.