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Friday, October 10, 2008

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xarkGirl

Don't forget one of the most profound truths. In increasingly desperate attempts to salvage the bottom line (particularly for publicly owned companies), media outlets have abandoned any pretense of investing in personnel. They cut positions, cut training budgets (if they ever had one), cut positions. They have behaved as if experience doesn't matter, expertise is ego and everyone is expendable. The bleeding started years ago. At this point, it's full-fledged arterial spurting.

John Robinson

Yeah, but other than that....

Peg

Well, I, for one, would like to hear your ideas on the subject of what can be done.

reader

Unless "what can be done" occurs in a different universe than Nos. 1-10, nothing can be done. Can you buy any of the companies you think have screwed everything up and are run by people who don't know what to do? Would you WANT to? If not, nothing can be done.

Daniel

OK, here's one solution: Newspaper companies should get out of the news business.

I'm not kidding, either.

If you look at modern newspaper companies, most of them are really in the advertising, printing and (to a lesser degree) distribution business. The actual news contained in the product is generally irrelevant to the company's mission: profit.

So what would happen if a metro paper announced that it was getting out of producing news?

The company could invite other groups to come in and negotiate for the rights to use its infrastructure to produce a product that could be sold, printed and delivered. It might even reach agreements with multiple groups that wanted to produce multiple publications.

Once those agreements were in place, the newspaper company would simply lay off its entire news staff. Some would be hired by the incoming news organizations. Others wouldn't.

The incoming news organizations would receive the revenues from their publications' ads, subscriptions and rack sales. But they'd have to pay the original company for production costs, printing costs, delivery costs, etc.

What I'm suggesting is that if newspaper companies focus on their real business (printing and production) and get out of the content creation business, the newspaper company might survive in a new form.

What about the Web? Well, the newspaper company would simply get out of the Web business. The new start-up news organizations that make use of their printing services would each create their own news web sites -- which isn't that big of a deal in terms of cost if you've already got the personnel.

So, by getting out of the news business, legacy newspaper companies would:

1. Create room for start-up, third-party, replacement news operations that would have otherwise avoided challenging the existing brand;
2. Create a more healthy local media ecosystem of mainstream and niche publications, both in print and online;
3. Spread out their risk to multiple clients. Once they're out of the news business, these companies will make their money no matter what the content producers do. And if one of the new start-ups fails, they'll simply have to work out new deals that encourage another startup to make use of its available capacity.
4. Improved their focus on their core business.

That's what I'd be exploring if I was on the board of directors. Because everything else heads straight toward disaster.

Pat Conover

I read a good bit of the news content in the A section of the Washington Post and the New York Times. I like it better than reading online because of comfort and portability. The big reason is that I assume that the editors will post the stories I most likely should stay in touch with. I don't have to go hunting for the stories I should be reading to be an informed citizen about the major events of the world. I also appreciate the writing quality.

The big news content is a small fraction of the printed pages delivered to my door each morning. Most of the rest goes into recycling without making it to the dining room table for breakfast, or into the "forget it" pile for recycling when I'm done with my coffee.

The biggest deal in high quality journalism is about a small portion of the product. So suppose you had a newspaper that consisted of the high quality journalism and advertisements. The rest of the "feature" material could go into "weekly magazines" that only go to those who buy them, and/or go online. With today's data management techniques keeping orders straight is doable. Consider the huge savings in print costs and distribution costs (and trees).

Then set up a blog for every major news story and get follow-up web ads income in addition.

And do all the classified ads online and compete with Craig's list, etc. Charge more for the classified ad that has a picture of the car that is for sale.

This would give you a decentralized newspaper and every "magazine" would have to earn its way.

Daniel

Hi Dad:

Comfort and portability are selling points. Back in my newspaper days I liked to emphasize speed: You can browse and consume a tightly edited newspaper much more rapidly and conveniently than you can a website, something I called "burst rate." But the issue there is "tightly edited," and most papers aren't.

Worst of all, the kinds of papers I'm writing about (and you'll notice I exempted the national metro dailies) have in many cases given up on running "the stories you most likely should stay in touch with" in favor of a losing strategy of pandering localism. Doesn't work in a metro setting.

The idea of a paper consisting only of high quality journalism on serious subjects + advertisements, supplemented by opt-in sections has its adherents, but here's the business side problem: a metro paper is an aggregation based on providing enough of everything to attract a general readership. In other words, you're meant to toss the majority of the paper. Everyone is.

It's a business model that's based on a low-bandwidth era, and it created profitable economies of scale for a long, long time. The waste involved was acceptable, because there just wasn't much in the way of competition.

But breaking that model by going KINDA niche is not a solution that I'm particularly enthusiastic about. Not that it isn't an interesting and good idea -- but in practical terms it's probably a marginal adjustment that doesn't change the game. To use a football analogy, it's the difference between losing 31-7 instead of 31-3.

Main reason? You'd still be doing these niche pubs with the same staff, which means that you'd be looking a profit-and-loss sheets for each, and most would never break even. That's the thing about aggregated economies of scale: When they work, the whole is greater than the sum of the parts.

Personally, for readers like you I'd prescribe a daily intelligence briefing rather than a standard newspaper filled with standard "fair-and-balanced" mass media American journalism.

re: classified ads. MAYBE you can keep some of that market if you offer REALLY GREAT, REALLY SMART, REALLY USEFUL classified ad services online, and then GIVE THOSE AWAY FOR FREE, but offer a print version of that ad as an upsell. Which is a reverse of how it's done now, which isn't working.

cowpesh

This, I think, is the key link in the chain that finally made me realize the future of newspapers was doomed:

9. The connection between quality and profitability has been broken irreparably.

Apply the current newspaper business model to any other industry and see what the results are. Imagine if Taco Bell cut the number of items on the menu, made them smaller, charged more for them and then eliminated several staff positions at each restaurant. And don't even get me started on what the Tacobell.com Web site would look like.

It wouldn't take long for customers to start going elsewhere, or just staying home buying microwave burritos instead.

Yet in newspapers we seem to still assume that we have such a rarefied and deified position atop the world that people will be forced to come back to us. Instead, we're finding out that readers are quickly losing patience with the strangulation of the newspaper industry. They're happy to have their microwave burritos and be done with it.


Belgand

The problem is also that print journalism isn't concentrating on what works best for it's medium. Primarily this is long-form, in-depth analysis and deep coverage of issues. How about a week-long series of deep articles explaining the current economic crisis, the fundamentals of how the economy works as is relevant to the issue (and not just some lame Macro Econ 101 fluff),it's beginnings, how we got to where we are, looks from economic experts about possible ways we can fix things (if at all), and analysis of how the current plans being implemented may or may not be in line with these.

Give me real coverage of local politics that I can't get most other places. Give me committed investigative journalism.

I don't want wire stories, I can get those anywhere and they contribute no real or unique value to your product. I don't want sports or lifestyle sections either those are better served online (and, well, I hate sports so it's getting thrown out anyway). Same goes for comics and reviews. I hate the local film critic and consider him absolute trash I'd rather read the reviews of a good dozen other reviewers online like everyone else already does. Y'know, people who don't call Click the best movie of the year (seriously, fuck you Mick LaSalle... you're an idiot).

Print isn't always a direct competitor to TV (OK, aside from C-Span and the Daily Show we all know there isn't any decent news on TV that's even remotely worth watching) and the web. Each has their own niche that they're good at. You need to stop adopting the viewpoint that you need to compete and instead start looking at what you can do uniquely better based on the constraints of each medium. If you give me intelligent, well-written articles that respect my intelligence as a reader and try to educate and cover topics in a greater depth than other media is generally capable of I'll go back to you.

Metaprinter

Excellent Post. I blog about innovation and convergent technologies within the newspaper industry at metaprinter.com and I can tell you with great certainty that yes, 1. their revenue model is untenable and 2. they have NO R&D so they blow their money on stupid crap like this:

http://blogs.browardpalmbeach.com/pulp/2008/10/palm_beach_post_turns_to_frank_n_magid_associates_consulting_firm.php

Patrick Giblin

Absolutely right on the money. I reached these conclusions when I finally walked away from 17 years as a daily newspaper reporter (about two years ago). I love journalism and believe that had the newspaper industry read the writing on the wall and reacted to these market changes, newspapers would be stronger than ever. Instead, they have guaranteed their extinction. Let's just hope good journalism finds a way to survive and thrive through blogging or some other mechanism.

Bill

It's sad what newspaper companies have done to themselves. I worked on the Times Mirror Videotex project in the early 80s (think AOL type info at 300 baud). After a presentation to some high level suits from the L.A. Times, one of them asked how the online news service could best be used to promote the sale of the next days newspaper. Newspaper people didn't understand the online revolution at the beginning and I expect still won't understand it when the last daily newspaper shuts down.

Daniel

You know, Bill, we had dinner tonight with a woman who does marketing for an adult entertainment company and she's pioneering the use of social media there. And the bosses want to know: Where's the money in this? Where's the revenue stream?

And she tells them: There isn't one. But you're building your brand and your brand loyalty, etc. And then they get it.

They get it better than most newspaper companies.

michael

Point One: The so-called ageing of the newspaper audience is a trend that precedes the internet (ie 1994). Readership in the US has been declining for several decades and previous bogeymen were radio and television and cable news networks. Now, for the last decade, it has been the Internet. But why make a distinction between newspapers and other form of print media, namely books and magazines? Does the internet kill off all print media, or just newspapers? Paper and print media is a technology that has been around for more than 3,000 years. The newspaper itself has been around for more than 400 years. It has survived competing communications technologies. It has survived radio. It has survived TV. It will also survive the Internet. Yes, the internet changes the news cycle, just has radio and television has changed the news cycle. But the Internet will not supplant newspapers as a printed media. It will merely force newspapers to adjust their role in the news media environment.

Points 2 through 6 are all part of the same problem described in different ways. In short, you can simply say that newspapers are reluctant to change. When I first started in this industry, I went to a meeting of the American Society of Newspaper Editors in Washington. This was in 1998. They actually have a panel called "Change." It's a group of very old editors talking about "change" and how to actually do "change." And I was thinking, "Why do you need a committee to talk about change? Why not just go a do it." But all their questions dealt with tackling change in the context of culture and traditions. It's very hard to do and it happens very slowly, too slow for anybody with an ounce of tech savvy. But this is an industry in which the New York Times didn't even use colour photographs until 1997 and it was a big deal when they decided to do so. And the Wall Street Journal didn't even print photographs until the past decade. Imagine: you have an industry so wedded to tradition that they don't even adopt a technology known as PHOTOGRAPHY until some 100 years after it was invented. So yes, I agree with you that there's a problem. But I am just putting this into context by citing other technologies that newspapers have been slow to embrace. I don't agree that newspapers' reluctance to embrace new technologies quickly enough will necessarily spell their doom.

Point 7: Agreed. But there is nothing you can do about this until the ad market changes. When there is a financial incentive to change, they will change.

Point 8: I disagree here, because professional news organisations still have the time and resources to produce the type of journalism that lone-operators can't. That's not to say that the lone-operator cannot produce a scoop. It's just to say that professional news organisations consistently break news and get scoops. Then the chattering hoards on the Internet talk about it. It's a symbiotic relationship and professional news organisations are very relevant online and offline.

Point 9: I don't know if this is true or if this is just nostalgia. Everybody remembers how it used to be. There are some newspaper chains in particular that sacrifice quality for a quick profit. But for every example you can cite, there are many that have been consistent in their quality over the years. Does anyone believe that the NYT is going downhill?

Point 10: There is no such thing as "modern" journalism. There are new technologies: radio, TV and the Internet. But what constitutes good journalism never changes.

Belgand is absolutely right

If print offered more in-depth analysis, strong supporting arguments, and multi-part, comprehensive coverage of important issues, I would never hesitate to buy a paper...

These days, by the time I've found a paper, I've already read all the wire stories.... they simply don't offer much anymore.

Michael Welles

As a consultant to several newspapers in the past, I agree with many of your points. However, the true reason for a newspaper's existence is to bring buyers to their true customers - the advertisers. Until newspapers recognize that display ads, whether on the web or in print, do not bring buyers, but only eyeballs, then expect to see further revenue declines. Some newspapers are sitting on decades of relevant subscription data - mine that information and find the buyers.

Newton Snookers

Let's not forget about such simple things as distribution. It's far more comfortable, especially for those of us in the upper Midwest in winter, to simply turn on one's computer than it is to go fetch a rolled-up newspaper from the snowbank at the end of the driveway.

Daniel

re: Michael Welles. You make an excellent point that I'd like to amplify: Newspapers' true customers are advertisers, not readers. They're a seller's agent posing as a buyer's agent.

The NEXT development in the media business model is going to put the buyer at the focus of the operation, and filter information to that person in ways that are profitable for everyone.

re: Belgand. I had an odd experience this weekend in a town not-my-own. There was a local Sunday paper in my hotel lobby for free, and after scanning its 1A I determined there wasn't enough in it to make it worth picking up.

It dawned on me 10 seconds later that when you can't GIVE AWAY a Sunday paper TO A NEWSPAPER GUY, you're pretty much dead.

Michael Bacon

The dirty secret of the news business is that it really doesn't matter if people read the articles or not, so long as there is circulation. Circulation, in turn, drives classified ad revenue, which is what kept newspapers afloat for years. Blogs aren't the real threat to newspapers, Craigslist is.

I dream of a hybrid successor to the newspaper that gives away free ads like Craigslist, but also provides premium ad space for anyone, then combines content generated from traditional journalism (with full time, professional journalists) with community generated content, actively edited for the best content. This would preserve the old marriage of classified/premium ads with professional journalism, while opening the door to the more interactive side of the internet that makes it so attractive.

Geoff Wittig

Print media have always been stuck in the cement of tradition and sunk costs. Newspapers were still using moveable lead type just like Gutenberg right through the early 1960s, and they have a colossal investment tied up in offset web presses. The exceedingly specialized field of high volume offset printing creates its own extraordinary inertia. It's apparent that this mindset comes to dominate the entire business.

A few contrarian points-
1) Most city newspapers no longer have any control over profit expectations or quality investments like staff training. They are owned by giant for-profit chains like Gannett, which insist on 20% profit increases year on year, and extract every last nickel of liquidity from their vassal papers.
2) Quality journalism desperately requires some kind of subsidizing revenue stream to underwrite its costs, because its "product" will never yield much profit. In years past this was provided by civic-minded city papers and tacitly encouraged by Federal guidelines. Those days are long gone.
3) I have no data to support this, but I suspect that many of the remaining print advertisers have fled big (i.e., expensive) city papers for the cheaper pages of suburban weekly rags, in part because that's their target market anyway, further starving the remaining urban dailies of revenue.

Austinite

The Austin American Statesman is actually doing something pretty interesting.

They've got lots of online features, and they've started targeting television news as a competitor! They're sending Statesman journalists out with video cameras, seeking the "scoop" on local stories.

Dunno if they'll print as many papers as they used to, but they do seem to be morphing into the future.

Daniel

re: Michael Bacon. Agreed. It seems to me that newspaper companies should offer free classifieds online with better features than Craigslist and then make their money with print upsells. Offering only for-pay options is a non-starter in today's classified market.

re: Geoff Wittig. Agreed. Quality requires subsidy... or return on investment. Stratfor,com is an example of what I've called thoughts on this subject are so close to mine it's kinda scary.

Yes, it's a step toward the future, but the question is, will sites like the Statesman invent it? Honestly, I don't really care who invents it, so long as it gets done right.

mnmears

Newspapers have the capability to reinvent themselves and turn the economics around, but I'm beginning to doubt publishers will ever embrace the technology and spend the money to make it happen.

I'm a fan of our newspaper's e-edition product because it looks like our printed newspaper; it's more environmentally friendly; and it offers several possibilities to better serve both readers and advertisers.

The e-edition can be full-process color without worry of press capacity. Stories (and advertising) can have hotlinks to add depth to coverage or take potential customers to a advertiser's online store. Ad rates can be based on both circulation and click-throughs.

Even an aging reader can find things that offset a traditional newspaper's portability factor. The type on an e-edition page can easily be scaled up to 200 percent or more.

A local advertiser can buy a half-page print and e-edition ad that has far more impact than some small banner ad on a traditional Web site that looks far too similar to every other news-based site on the World Wide Web.

Right now, our e-edition goes to a handful of former postal service subscribers and our newspaper-in-education program. Today's students are seeing an e-edition in the classroom. Our postal service subscribers like it because it's delivered in a far more timely fashion -- often hours before even the home-delivered product hits the doorstep.

Are publishers looking at what an e-edition could do today or its potential as newsprint costs continue to escalate? If they are, why aren't they promoting it? It's certainly more efficient than the tradition ink-on-paper model.

If I were running any major metro, but let's say the San Jose Mercury-News, I'd reduce paper use and costs by 75 percent or more Monday through Saturday, serving only a few areas with a published paper product -- areas with a high concentration of seniors, grocery stores and newsracks.

I believe the e-edition is a product that, when combined with a newspaper's unique style and local content, has enormous potential.

Daniel

I don't typically like to disagree so rudely with one of our guests, but the e-edition concept is a failure. Popular with newspaper publishers? Yes. Popular with readers? No. Change the essential dynamic that's destroying newspapers as institutions? No, no, no.

Most e-editions are a print product on the web, but you can't print them out. Publishers like them because they get circulation credit for them (which helps their advertising rates), but the only real market for them are out-of-town lawyers, clipping services, and... well, I'm trying to think of more. Oh, the vendors who sell the e-edition conversion services love them. Publishers will spend money on them because e-editions are the solution publishers WANT to succeed. They just never do.

Here's why: Using the web to deliver an e-edition of the print product is like using TV to broadcast radio. Sure, radio programs like the idea. But it misses the point.

The Web is a different medium. You have to get that.

And yes, if you haven't figured this out yet, I used to be in management, and yes, I have experience with e-editions.

mnmears

Daniel,

I don't consider your comments rude ... and I agree that the e-edition would be best seen as a separate, hybrid product.

Media companies should do ANYTHING and EVERYTHING they can to make use of its technological advantanges -- embedded hotlinks to boost depth of coverage, full use of color, etc. The vast majority of e-editions out there today are not doing that.

If companies fail to utilize the technological advantages, then why bother? Well, there's the cost savings and environmental issues, but those alone aren't likely going to sell enough subscribers on making the switch.

That's one readon I say that someone with intestinal fortitude and in the right market -- i.e. San Jose -- could force the issue (and generate a great deal of industry interest and media attention with the experiment).

Things like full color and stories with embedded hotlinks to supplemental material or photo slideshows are things that might bring more subscribers into the fold. People are curious and enjoy a bit of directed exploration.

A firsthand example, I wrote about a museum project under construction at The Presidio that mentioned the base was once the home of Gen. Blackjack Pershing ... the article was published both in print and online. The Web-editor "plussed" my story with a hotlink to all sorts of history on both Pershing and The Presidio itself -- certainly not the focus of my story, but fascinating nonetheless.

I appreciated the links and, based on the feedback, so did other readers. "Plussing" is part of what made Walt Disney's films and theme parks successful; part of the reason Pixar's films have become instant classics.

E-editions popular with publishers? ... You say yes; I say not really. They're not promoting them; they're not doing anything to make them better than the day's printed product.

Publishers are tied to the print product and I've heard some express a fear of losing revenue from advertising inserts. Of course, those inserts could also be posted online as part of the e-edition product with payment based on click-throughs or hits.

(The truth is many corporate advertisers like Best Buy already post their inserts online or as PDFs) ... It's just a matter of time before they do a cost vs. benefit analysis and decide to cut newspapers out of the equation entirely.

E-editions popular with readers? You say "no." I disagree. I don't think the public at large even knows that e-editions exist. I'd bet 90 percent of a newspaper's employees know about their Web site, but I'd bet less than half of those employees have ever taken a look at their newspaper's e-edition. I'd bet that very few of today's e-editions are utilizing the technological advantages of hotlinks and full color.

Show me one newspaper that has promoted the e-edition in print, online ... anywhere. I bet they put 1,000 times more effort into Web sites.

For sure, the e-edition is a hybrid -- our industry's Prius -- but until people can see and experience this inexpensive and greener alternative for themselves, it will never catch on. Is it even being made available at your local library? Has any company hosted a 30-minute e-edition navigation seminar?

Given the devasting cuts happening within the industry, doesn't it make sense to explore the savings of newsprint, ink, fuel, etc. by encouraging the switch?

You say publishers really WANT e-editions to succeed. I see little evidence to support your contention.

Daniel Farrell

Regarding news generation... consider what some community minded folks have done here in Richmond, VA. They have community blogs in many of the neighborhoods in the city that find out about things as they happen on the street. They get fed info by neighbors who witness things or see the sirens and head over to look. Then they aggregate the stories that would interest people outside of their neighborhood at RVANews.com. They are stilling figuring it out some but they are breaking stories before the main stream media outlets are.

drouse

Another vote against e-editions

To come quickly to the point, do you think that any of the e-edition software vendors have clients other than newspapers or magazines? Probably not, because anyone else building content for the web would build their content for the web, not shovel a Quark PDF into a Flash presentation.

Newspapers have a hammer (their print design infrastructure) and so everything they see is a nail. That is a flawed perspective on the world. If big Flash presentation were better than web pages, they would be used more often and be less derided by people who care about the web.

And also there are those e-edition software vendors. Everyone is making money selling solutions to Newspapers. We need to learn that we are technology companies and start to invest in the ability to produce this stuff in house.

Just my perspective, from a small daily in the South East.

nancypricella

The good news, though, is that many newsrooms have moved on. They've shuttered the trophy cases of the past and pointed their focus forward, to a future that while still unknown will surely be shaped only by those who get their hands dirty with its making.
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nancypricella

MLS

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