The CEO of UK’s Guardian Media Group, Andrew Miller, is facing the same dilemma every other newspaper in the world is facing – going digital but still making money. Miller did not hold back when describing the challenges at a seminar for the Institute of Chartered Accountants Scotland (ICAS). As paidContent put it, “there is something ironic about a newspaper publisher discussing its financial travails at an event thrown for accountants.”

“Journalism is very under threat at the moment with the digital transition,” he said, and that the Guardian still had time to innovate before it really must turn a profit. How it can adapt to digital, and do that, may be quite a task because currently only 30 percent of the Guardian’s revenues come from digital. “So, to say we can sustain a business for a long time with a high level of journalists with this mix of revenue is very, very difficult.”

As a result, staff numbers have had to be cut, but the news still has to be written – whether in print or digitally. Newspapers, it seems, are going through much the same agony as CSPs – how to generate revenues from digital services. Writing good, original news was why people used to buy newspapers and the advertisements in them generated the money to pay for the news (and generate profits).

Those traditional advertisers have been lured away, presumably now spending their money where they get better results or can better monitor the return on the spending. It’s not as easy to tell how newspaper ads are working compared to open rates and click-throughs via digital channels. So, why don’t those same ads from print work in digital versions of newspapers?

The answer to that is pretty obvious. The much richer medium offers the opportunity for much more creativity and interaction, but many advertisers haven’t quite understood that or don’t want to spend the extra money in production. Strangely enough, classified ad revenue is still the main earner, with Miller pointing out that a significant part for that for The Guardian came from dating classifieds.

Presuming that good or popular journalism gets the readers to the digital site, the next challenge is getting them to pay for the privilege, even before they click on an ad. It seems weird that we were happy to pay for a newspaper but not for a digital version of the same thing. Are we so conditioned to think everything on the internet should be free? This is the first hurdle that publishers are trying to cross by adding ‘pay walls’ to their sites. Newsweek magazine, that is going all digital shortly, is assuming that if there is no other choice of medium readers will happily pay.

That plan may also backfire and most publishers overlook the fact that moving from print to digital gives them a bare canvas to work on. Creativity and good design are needed to take advantage of the digital world. Just recreating an electronic version of the paper edition simply won’t ‘cut the mustard’ and will turn people away. Yet, there is a fear that losing the familiarity of the print version is an even greater risk.

The real creativity may be left to the advertisers that can now add video to their space. I used to marvel at the scenes in the Harry Potter movies when the newspaper images came to life as the pages were turned. With the advent of the iPad, the same can almost be achieved today. How much fun could you have with that?

I suspect that we haven’t yet touched the surface on how far digital press can go, but it’s going to take a pretty adventurous publisher to get there and, adventurous newspaper publishers, it seems, are almost as common as adventurous, risk-taking CSP CEOs. Something else they have in common?

First published at TM Forum as The Insider, 31 October, 2012