An Abrupt and Drastic Change Is Needed
Note: I originally wrote this on July 7 or 8, 2008. The original url is: http://mcclatchynext.pbworks.com/w/page/20627218/An-abrupt-and-drastic-change-is-needed. I am posting it here so I’ll have my own copy…
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 +
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,