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An abrupt and drastic change is needed

Page history last edited by Steven Hilton 15 years, 10 months ago

I'm afraid the newspaper industry will keep falling apart if it doesn't do an abrupt and drastic change very soon. Something different. I don't mean better, faster or cheaper. I don't mean harnessing new technologies to improve the way we do things. I mean substantively, fundamentally different.

 

But different how?

 

Assume universal and ubiquitous Internet access

 

This is where the the world is going. We need to be ready for it. Start dropping print editions.

 

If you can read the news on your iPod or some other wireless device while sitting on the toilet, waiting in a doctor's office or on the bus, you will not read the print edition.  Make plans now for online-only news operations. Not where the print and online editions fit hand-in-glove, but where the print side does not exist.

 

Don't wait for this to happen and react, be proactive and take steps to make it happen. We need some creative destruction.

 

Don't try to keep print alive. If it's still bringing in money, fine, but don't try to "re-invent the newspaper". Use the print world to underwrite the building of the online world while you can.  But at some point, it's not going to be worth all the paper, ink, gas, trucks and bodies to haul the news around every 24 hours. At some point, the printing press will cost too much.

 

Stop repackaging content we don't own

 

The time when the local newspaper was a person's primary window into the wider world beyond the community is gone.

 

Unless you are one of the top three or four newsapers in the country and you have dedicated staff writing original content on the subject, realize that people aren't reading your local newspaper site to learn about what's going on in the Middle East. You are not the original sources. Stories you get from the wire are the same stories everyone else gets from the wire.

 

The exact same story will show up 100 or 1000 times on a Google News search at roughly the same time. There is no added value here. Do not waste print or revenue or editorial resources schlepping around content that does not add some unique value to our sites for users.

 

This includes all content, not just news: Movies, stocks, weather, etc. If someone else owns the data and is selling it to you, they are selling it as a commodity on the Internet.

 

I can go to dozens of sites on the Internet to get my weather. In fact, I don't even know who gives me my weather information. I have a little weather applet on my desktop that has current conditions. If I click on it, I get the forecast. 99% of the time, that's all I need. I have a weather.com bookmark for my zipcode if I need anything more detailed. Why weather.com? Because that's what they do. They own that data. They are focused on that data. I searched and clicked around and liked their page best. I almost never look anywhere else for weather.

 

Movies? I use a google bookmark for "movies + <zipcode>" That links to theaters, show times and reviews. The reviews are links from dozens of different sources. That's just when I'm about to go to the movies. For movies in general, I go to Rotten Tomatoes or IMDB. Why? They own the space. They create the original data.

 

For any given type of content, there are a few sites that have cornered the market for it, because they specialize in that content. It will be increasingly difficult for newspapers to compete in those areas. We don't specialize in, say, movies, and we don't have enough of our own movie-related content to beat those who do specialize in it.

 

Most of the newspaper industry has partially conceded this point when it comes to daily stock listings. We know it's a waste of ink and money to put it in print.

 

If you don't own the content, you can't own the eyeballs that want to see that content. You may have some eyeballs now, but that's not a sustainable model. In the online world, wire services and redistribution of content are obsolete, and that model won't last.

 

This means the Associated Press will eventually go away, or change significantly.

 

Don't lean on classifieds for revenue

 

It's gone and it's not coming back. Ever. The sub-prime debacle accelerated the decline (over a cliff), but don't fool yourself into thinking it's coming back. It might tick up a bit, but that world is gone. Why? Two reasons.

 

I'll let Robert Cringely tell the first reason, from his recent (online!) column: 

 

My young and lovely wife, showing what might be overoptimism or maybe artful timing given the economy but

more likely just general disappointment with me, has decided to embark on a career in real estate sales. She

has taken classes and passed tests, joined one of the very best local firms, and hurled herself into the

business of selling historic Charleston homes while they still have some value and the termites haven't

finished their work.  And along the way, while mastering the Multiple Listing Service, she learned an

important fact that was news to us both: people no longer find houses for sale by looking in the local

newspaper. They use the Internet, instead.

 

The irony here is that -- at least in these parts -- the local paper seems chock-full of real estate ads. But

according to her teachers down at the MLS university, those listings are simply vestigial, like little toes

we all have but probably don't need for balance or, indeed, for anything at all. Real estate brokers put ads

in local newspapers because their customers expect them to do so, not because they actually help sell houses.

 

I'm sure there are exceptions to this rule, but if 80 percent of all houses for sale in the U.S. are

eventually sold NOT because of any newspaper listing, tradition or professional pride aside, at some point we

can expect real estate newspaper advertising to eventually disappear.

 

The toothpaste is out of the tube.

 

The second reason is that in the online world, anyone can compete is the classifieds space. And of course, the competition is out in force, which is something the newspaper industry hasn't had to deal with for a while. In the classifieds space, we are at a distinct disadvantage.

 

There is a lot of money here so there are lots of competitors. Most of them won't have to carve out a signifant portion of their revenue to underwrite an unrelated news operation, and they will out-compete those that do. In a sense, "news" is a parasite on the classifieds revenue machine.

 

How much money does autotrader get to reinvest in their core competency, where cars.com has to send the money to its media corporation owers to subsidize their interactive divisions?

 

This imbalance is not sustainable over the long-term. 

 

Don't think web 2.0 / social networking / user generated content / multimedia will save us

 

It's a failure on our part that we don't already have all these things. But adding them won't fundamentally change our conditions. We will get a few more page views from the extra content, but there will be no drastic change.

 

Why? Because digg and reddit and newsvine and delicous already exist. Youtube and hulu already exist. They are focused exclusively on the developing communities around user generated content. Can we successfully compete with them? Unlikely.

 

Most experienced users are starting to expect comments and tags and ratings on content sites. When we finally get them integrated into all of our sites, it's not going to be revolutionary.

 

Just because it's new to us doesn't mean it's new.

 

Learn how to make money on our content

 

Not our sites -- our *content.* The stuff we create and own. You know: the news. However it gets delivered to users.

 

This is the crux of the problem. And I don't think we know how to do it.

 

But let's not fool ourselves -- if we can't make money on news reporting and journalistic endeavors *directly,* then none of this really matters.  If news operations can't make money then it'll eventually and officially become a non-profit or philanthropic activity, not a business.  The money will have to come from somewhere else. "Somewhere else," if it comes to that, can be anything at all, or any combination of things. But if we can't make money with news, then let's not expect to, and go non-profit.

 

News will continue to get created either way, of course, but it would be good if we can answer this question sooner rather than later. Is news, by itself, a for-profit or non-profit activity? Let's hope good journalism really *is* good business.

 

(Note that by "news operations" I don't mean that editors and reporters will be selling the ads. News operations will have sales and marketing arms).

 

I know there are only a few ways to make money online: ads, sponsorships, subscriptions, e-commerce. It must be possible to find some combination of these revenue models that can pay for an office full of editors, designers, reporters and photographers.

 

We are going to be smaller

 

All that classifieds money is going away. All that wire content used to fill up the news hole is uneeded.  And the "news hole" is either gone or infinitely large, depending on how you look at it. There are no more printing presses. That means we are going to be much, much smaller. This will not be an easy transition to make.

 

What now?

 

This post focused mainly on what *not* to do, or what I think we're doing wrong. But what are we supposed to actually *do*? I have ideas, but that'll have to be the subject of another post,

 

 

Comments (25)

Justin Lilly said

at 9:50 pm on Jul 8, 2008

Wow. This has basically the grander themes from my gripes over my 6 month introduction into the world of news and then taken them a step further. Comments, tagging and their ilk are band-aids for an amputee: not substantial enough to make a difference. Its something we should have had 5 years ago. Instead of playing catchup and hanging at the coat-tails of the gNews, diggs, reddits, etc.. we need to figure out if quality journalism is worth enough money to sustain those who put it together. Great Article, Steven!

Marc Matteo said

at 10:06 pm on Jul 8, 2008

Aw geez, I post a shallow summary of someone else's post at the same time Steven posts this well thought out and eloquent piece. Sheesh, way to make me look bad, man!

Seriously though, great post.

Dan Day said

at 6:38 am on Jul 9, 2008

"Don't try to keep print alive?"

In our market, that would be colossally stupid, not to mention suicidal.

Justin Lilly said

at 7:17 am on Jul 9, 2008

@Dan I think the point Steven was trying to make is: Print is what it is. Let it keep trucking down the path where people who want the newspaper get it. I don't think the message of the post was "do away with the newspaper and go online only", but rather let print be what it is, but its not the future. Let's figure out what the future is and attack it.

Jim Richardson said

at 8:24 am on Jul 9, 2008

Ok, my reporter skeptical side is coming out. I agree that non-print-delivery-systems (Willie Brown would put it that way, ask me later) hold great promise. Yes, MNI is way behind the ball on the web and you should have been on this five years ago. But...
Most of your readers still pick up a newspaper. Many do not carry ipods and cell phones and have expensive computer systems, and if they do, they still prefer to pick up a newspaper. Your newspapers are in trouble but they are not dead. You still have more newspaper readers than you have hits on the internet. That is changing -- maybe.

For the sake of argument, here is what I think will happen to your newspapers: As you shrink in circulation, your newspaper readers will be increasingly rabid that they receive a newspaper. The demographic will be older and more educated, and probably not as interested in local news as you think. Economics, politics, big issues, and sports like golf (my office came to a standstill during the sudden-death hole of the US Open) and tennis will be high on their interest list (can you spell e-l-i-t-e). They will expect balanced coverage that has depth. This presents you with opportunities and challenges. Throwing tons of information at them isn't what they are looking for. Breaking news they will get elsewhere, but they want from their newspaper analysis and explanation of the meaning of events.

I don't think that audience is going away. It may get smaller and grayer, but it also has buying power. I suspect those are your readers now, and they will be more so in the future.

Jim Richardson said

at 8:28 am on Jul 9, 2008

One fix to that last entry. Your audience carries cell phones, but I don't see them wanting their newspaper on it. That said, that may be where you are headed. But ask yourself, do they want tons of text messages tossed at them every 20 seconds? Or do they want some kind of digest or some other summary/analysis.

Justin Lilly said

at 8:29 am on Jul 9, 2008

+1 Agree @ Jim Richardson

That being said "Breaking news they will get elsewhere" needs to be that paper's website. Period.

garynielson said

at 8:30 am on Jul 9, 2008

What do studies show? I am very interested in what they say older, more affluent readers use the daily newspaper for.

Howard Weaver said

at 8:53 am on Jul 9, 2008

Please get over this "we should have had that five years ago" meme. MySpace was launched in 2003; Facebook in 2004; YouTube in 2005. The thing we were *really* too slow about was becoming audience-centered -- letting go of some old hierarchical processes and learning how to adapt and move nimbly. We don't compete nationally with the Wall Street Journal or USA Today, and we don't need to be YouTube; we need to have the locally compelling and relevant video. We don't need to invent this stuff. Our play is serving local communities. I don't mean Little LEague scores (we,, okay, that too) but genuine public service journalism in all forms that adds value to the lives of those who invest the time to use it.

James Calloway said

at 9:28 am on Jul 9, 2008

Yes, the role of print will shift, and its contribution to our success will shrink, but no, it will not disappear any time soon. The problem with print is not the Internet. The Internet is simply the latest and most powerful accelerant to a fire that has been burning since the 1960s if not earlier. We will have to find ways to make print more cost efficient, such as by outsourcing printing, but the future of print lies in new business models: moving to market-driven pricing and sales efforts rather than holding onto practices that were based on a long-vanished local market monopoly.

Content is only part of the answer. Contrary to frequent proclamations by pundits, content is not intrinsically a commodity, but it can become a commodity if we let it. There is intrinsic value to its uniqueness. The problem is that the value is usually narrow and short-lived. Content is its own long tail. You need lots of it before you can make it into a business, and even then, it isn't easy, as the folks at YouTube have discovered.

And yes, social networking, et al., is not the answer. It's not even the question. The problem is not that we're late doing it, even though we are. The problem is that it isn't working for anyone. If someone figures out a business model for it, it will be a game changer for everyone, but the 2.0 moniker is misleading. It's actually in its third generation, and it may take another generation before a business model emerges.

Personally, I think we are headed for a network model, but one that is the reverse of the old broadcast network model. The old model was that the network provided the content and the affiliate provided the audience. The new model is that the affiliate provides content and the network provides audience. In both models, sales occurs at both levels, but now sales at the local level are proving to be especially important. It may well turn out that our most marketable non-content product is our local sales staff.

afreeman said

at 9:32 am on Jul 9, 2008

Given the dramatic increases we've noticed in both user registration and return traffic on the websites where we've implemented user commenting, I think dismissing these features out of hand is the functional equivalent of cutting off your nose to spite your face. I believe that much like the current fuel crisis(?), no single solution is going to mysteriously "save" the company. It's going to take a concerted effort across the enterprise, and the first step is ditching the "maintain the status quo" mentality that's played a large part in getting us to where we are now.

Michael Edenfield said

at 9:37 am on Jul 9, 2008

We should get on the ball about selling video preroll, on both the national and local level and better serve all ads through geotargeted IP addresses. It's what advertisers want. When a video goes viral without an ad, we've lost a revenue opportunity.

Rather than asking people to remove our videos from their sites or blogs, we should make sure we have the inventory of and are serving these ads with the content as it travels to other places. Serve ads with RSS feeds, or within each story within the RSS feed, to display on other sites (Sorta like what feedity does with their free service)

I agree that we should look more closely at making money off of the content itself in addition to our sites. Distribution platforms will continue to propogate, (kindle, RSS, mobile, newsletters, etc..) but at the end of the day, compelling content remains king, and is what our newrooms do very well.

Jim Richardson said

at 10:02 am on Jul 9, 2008

Howard, the "five years ago" comment is a throw-away line meant to placate you! I do not want my newspaper to be youtube or facebook, I want it to be the newspaper in whatever form it comes. Please see my comments on mission. More than ever reading all this here I am convinced that Mission is what you need to hone in on like an Exocet missile. The platform is the means -- newsprint, ipods, computers. What are you here to do? Why would the world be poorer if you did not exist? Get off the tangents, zero in on the mission.

RobbieMcAlister said

at 10:07 am on Jul 9, 2008

@James, your comment does ring true. Where I feel we're really late to the game is understanding that we deliver an audience to the advertisers who pay us for exposure. Our content is only a lure to capture that audience. Anyone who fishes knows that you can catch fish with just about anything, but you can't catch the fish you want to catch unless you have the stuff they like and you present it when and how they want it.

@Gary, @Jim, @Justin: I'm with Gary in that I'd like to see some real numbers about our affluent readers. It's funny that we believe older folks still want their news from the print newspaper. My dad (61 year old) sends and receives text messages with pics and video, gets news alerts via email and never reads the newspaper for anything. While eating breakfast in a hotel in Charlotte, NC a couple of weekends ago, I watched as a couple of 60+ year-old men compared the news and weather delivery on an iPhone and a Palm Treo deciding that both phones were better at getting them the info they wanted than a newspaper because they could get up to date news on demand. That may not be typical, but they helped me change my view about grey-haired folks and how they want their news.

My best friend, ~50 years old and a very technically competent news junkie, reads the newspaper (News and Observer in Raleigh) every morning because it is relaxing and informative. However, while he is home incessantly watching television news shows, he sits with a laptop on the end table to look up every statement for consensus verification of truth via Yahoo and Google. He never visits the N&O website because it is unfriendly.

We can't continue to make decisions about our readers or their habits until we do some real market research. I understand that the newspaper business is collapsing and has been for a few decades, but the business of news will remain. Are we willing to change drastically to be a part of that?

Stephen Crosby said

at 10:11 am on Jul 9, 2008

I like these thoughts steven, here at the Bee I think we've long since realized many of these points and this *is* the direction we're going. But there's no reason I see that we can't be more agile. It would help if we had better tools given to us and a more agile corporate culture and not so many mandated limitations, but my department has its own culture and our own tools; we're constantly thinking of ways to create more exclusive content. I even hear the words "page views" uttered often inside the newsroom (that's still a scary thought for many journalists).

"there is intrinsic value to its uniqueness" - Calloway

I've long thought about our online business model this way and only recently accepted it as fact. Basically we create exclusive content. If the content is good and people want to see it, we can make them do all kinds of things they wouldn't normally do (click across multiple pages to read a single story, watch pre-roll ads, put up with distracting animated ads, become a registered user) to get to it. That's not to say we shouldn't look at new options, that's where we start heading towards the "invent stuff vs serve your audience" argument that Howard put up. I'll save that for another discussion.

So an abrupt and drastic change? maybe, but like you said, let print run its course (it may never die completely for all we know), and give us more ownership of our own web presence so we can foster an audience for what could someday be our bread and butter medium. I'll talk all about that in another discussion as well.

Alex Howard said

at 10:45 am on Jul 9, 2008

I contend that we have the content. We do great journalism that people appreciate (at least at the N&O). What we don't have is a handle on the best way to get that content into people's hands and heads. I don't think we try enough new things or go after enough niches. And I'm not talking about niche content (though that's important too), I'm talking out our delivery methods. Give people the content in any way and every way they want to get it. If people are willing to pay for print, give it to them until its not economically viable, but give them options. We should focus on making those quality options and producing the content in a way that works for each delivery method. And I don't mean finding a vendor to contract it to and then forgetting it exists. We should be putting content on every kind of device we can think of. Cutting edge devices means early adopters who are educated folks with disposable income who become incredibly loyal and promotors for those that come after.

Getting people content shouldn't be an either/or choice. Ad departments need to start thinking of creative ways to get businesses to pay for those eyeballs like ad-free single sponsored content (like salon.com's daypass) and circulation departments need to start thinking of ways for people to pay to get exactly the content they want (like e-paper delivery).

Pam Dunlap-Shohl said

at 12:12 pm on Jul 9, 2008

Take a look at Umair Haque's blog "A Manifesto for the Next Industrial Revolution". He talks about rethinking the economic growth model. A quote:

"Organize something. Why does Google insist that it’s goal is to “organize the world’s information”? Because it’s figured out one of the deepest secrets hidden at the heart of 21st century economics: markets, networks, and communities can organize economic activities radically more efficiently than firms.
How do we begin reorganizing the industrial economy? By using markets, networks, and communities to alter the way resources are managed: to weave a fabric of incentives for sustainable growth and authentic value creation into the economy - a new economic fabric that’s meaningful to people.
Google utilized a market - AdWords - to utterly eviscerate a stale, broken media value chain. Here's a more visceral example. Muhammad Yunus revolutionized finance - not by collecting more money to lend, but by using communities to fundamentally alter the value equation of lending to the poor. The result was industry transformation."

Here's the link:
http://discussionleader.hbsp.com/haque/2008/06/a_manifesto_for_the_next_indus_1.html

sbillman@... said

at 7:49 am on Jul 14, 2008

Will Albritton said

at 9:46 am on Jul 17, 2008

Did anyone see the 2005 movie "Kinky Boots"?

It's a British film in the vein of "The Full Monty" ... a son inherits his father's shoe factory, only to discover business is bad and he has to lay off a dozen factory workers. He keeps asking what he can do, and one of the "redundant" employees (a nice way of saying layed off, gotta love the Brits) suggests he change the product.

The core of what the factory produces is a craft service -- these are craftsmen/women. They made great shoes, ones that last for years. Thing is, the marketplace moved on and wanted cheaper shoes, and consumers didn't mind replacing them every year.

The solution, which is supposedly based on a real factory in a small ltown in England, was to find a niche. Keep using their skills to produce the best product they can, but one people will actually buy.

So they made footwear for drag queens. They saved the factory. Everyone kept their jobs.

My wife made me watch it. I thought it was a good movie.

Steven Hilton said

at 10:55 am on Jul 31, 2008

http://www.newsobserver.com/news/story/1160569.html

The (Lexington, NC) Dispatch will eliminate its Monday newspaper Sept. 1


So it begins. I should get paid for my excellent consultations!

Howard Weaver said

at 2:35 pm on Jul 31, 2008

Will: I saw that movie, too. At the time I was more interested in the kinky boots than the strategic repositioning aspects, but your point is well taken. Worth viewing on both counts.

Will Albritton said

at 3:40 pm on Jul 31, 2008

Howard says: "At the time I was more interested in the kinky boots" ... and I'll let that one go.

I was at Target the other night, and I was buying soap with my wife. I usually get the bar soap (Irish Spring), but my wife suggested I get the liquid stuff -- you know, in the bottle. She wants me to use the loofah more (not the point) ... the point is, if my brand -- Irish Spring -- didn't provide a liquid soap option, I would have probably gone with a different brand. Perhaps some upstart soap company with a glossy sticker on its bottle that looked attractive. I probably wouldn't have cared about the quality of the product, because hell, it was cheaper. But, fortunately for me (and the Irish Spring soap company), there was a liquid soap option of the brand I wanted.

Question to ponder: Do you think the people who always dreamed of making bar soap -- and for years, made the best bar soap possible -- just refused to try working on a liquid version, because it was beneath their talents? After all, they're bar soap people, dammit. Not this new, liquid crap.

I wonder how many name-brand soap companies that only make bar soap there are. And now I wonder how long they'll be around in this new marketplace (in which consumers make decisions on what products to buy for all sorts of reasons -- some much less predictable than taking suggestions from their spouses).

Steven Hilton said

at 3:38 pm on Dec 19, 2008

Make a comment there to remind people that this page exists.

Gary O'Brien said

at 5:28 pm on Dec 19, 2008

A lot has happened in our business since this was originally posted. Are these ideas still relevant? I believe they are, but our window to implement the changes is nearly shut.
Will there be further discussion in our company about these ideas? Or are we past the point where we are willing to try something, anything other than cutting budgets/staff/coverage/circulation?

Howard was and is still right: "We don't compete nationally with the Wall Street Journal or USA Today, and we don't need to be YouTube; we need to have the locally compelling and relevant video. We don't need to invent this stuff. Our play is serving local communities. I don't mean Little LEague scores (we,, okay, that too) but genuine public service journalism in all forms that adds value to the lives of those who invest the time to use it."

I am afraid we've crippled our wonderful content generating machines - the newsrooms - to the point where even if we did make a strong move toward the ideas expressed here, we couldn't do it.

I hope like hell I'm wrong.

Cynder Gray said

at 8:10 am on Jan 3, 2009

I don't think that time is past yet but it is approaching. Relevant discussions are happening on blogs across the country and around the world.

The point, to me, remains that many media companies (magazines, television, radio, cable) are losing sight of their content creation focus while they run in circles trying to chase former revenue streams. Newspapers are the same as they struggle to keep print business alive by choking their newsrooms--the biggest asset!

There are still a number of strategies that can be utilized to protect newsrooms, allow for local autonomy and still centralize efforts while generating a revenue stream.

The broad strokes: divide the company into news and print operations. Then brand the hell out of the news operations and create ties (read as: sell content) to anyone that needs a newsfeed. Allow TV and Radio to outsource their news operations in favor of the better (and cheaper to them) news operations of McClatchy. Additional internet strategies abound to bring viewers to McClatchy sites.

Print is alive and well, allowing the print side to operate autonomously they'll also find ways to sell press time and capacity.

It comes to this, a strategy needs to be formulated and implemented.

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