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Faced with falling print circulations and growing user demand for online content, newspaper publishers have come under growing pressure to pursue a digital transformation agenda in a bid to survive.
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This holds true for publishers of both regional and national titles, with many embarking on operational efficiency drives to offset falls in print advertising revenues, while ensuring their organisations are still nimble enough to respond to new and emerging competitive threats.
“There is pressure on revenues, and publishers have to look for ways to make their businesses more efficient because the revenue you get from digital doesn’t match what you would have got in the past from print,” says Phil Walker, managing director of publishing software house PCS Publishing.
“The days when there were three or four local newspapers serving the same geography have gone, and newspapers are not competing with each other any more, because each of the [remaining] titles effectively has a geographical franchise and they have their own marketplace.”
The real competition publishers face these days is anything that threatens to divert attention away from their websites or – in the case of Facebook – provide readers with alternative sources of information about what is going on locally.
With the competitive pressure between rival local newspapers now all but eradicated, this has paved the way for some titles to pursue operational efficiency by adopting a shared services-type approach to produce their papers.
“We now have a situation with one of our customers – the Oldham Evening Chronicle – where they are outsourcing their infrastructure to us, while at the same time outsourcing some of their day-to-day functions to another of our customers,” said Walker.
“In that instance, their advertising artwork production is done by the Midland News Association, and their copy editing is done in real time by another of our customers, Newsquest.”
This is a very different way of working from the past, said Walker, when few publishers would have been willing to work so closely with their competitors.
“Now, someone in Oldham writes a story in a browser, which is picked up 200 miles away, and someone copy-edits that story to fit the box on the page, while someone in Wolverhampton is creating the ad that sits alongside it,” he said. “That is all seamless and a real sea-change in the architecture of the newspaper business.”
A problem shared
Collaboration driven by the need for cost-saving and efficiency is an area PCS has explored recently with the Midland News Association. This happened after the two organisations – which are owned by the same holding company – found themselves in need of IT infrastructure upgrades at about the same time.
The Association’s problem is that its IT infrastructure, which was originally installed more than seven years ago, had grown increasingly convoluted and less reliable over time, said print managing director Graeme Clifford.
“As a newspaper publisher, we have to have a system that is robust, offers us the speed we need to talk to people, our readers and our audience online,” he said.
“Over the years, we spent goodness knows how much money as we added a new server for this and a new one for that until we had about a hundred different servers running different parts of our operations.”
With the setup becoming increasingly creaky, the Midland News Association team began investigating the cost of replacing it, with like-for-life pricing coming in at around £300,000, which was judged too expensive.
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Meanwhile, PCS was running into some hardware refresh issues of its own, so the two organisations started looking for a cost-effective solution to their joint IT infrastructure woes.
“Midland News Association uses our software, and we have the same holding company, so we set about coming up with a scheme whereby we could pool our resources, while securing the extra capacity we need for growth,” said Walker.
The two organisations embarked on an infrastructure refresh that saw PCS build a VMware and Dell-based hardware stack, and replicate it across both of its datacentres, which would be used to virtually host Midland News Association’s entire IT infrastructure.
“The biggest thing for us is we’re now not constantly looking over our shoulder expecting hardware failures to happen, because we’re now running our business on this new, high-speed and resilient equipment,” said Clifford.
“And because the equipment is newer and more efficient, it uses less power, generating less heat and a lot less cooling.”
PCS has similar infrastructure hosting and management agreements with other newspaper publishing houses, and – with interest in shared services growing across the industry – Walker said the project could be replicated in other publishing houses across the country.
“The fact we can host people centrally, joining the businesses up so they can pool resources, is a trend that will speed up in 2017, based on the discussions we’re having with other prospects,” he added.