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RSSI am not going to write about newspapers anymore. Over the past three or four years, I have devoted quite a number of my columns to issues in the newspaper industry. No more. I no longer believe that the industry is very relevant to the future and things digital. Since I prefer to write about those topics, and am also becoming more interested lately in how the Internet will reshape the television and video industries, I plan to focus my attention there. However, since I am preparing for a talk I am giving next week to a number of newspaper industry executives, I will address the subject one last time.
Earlier this week, I read two great posts related to newspapers and their current problems. The first was a story by Jack Shafer on Slate chronicling the many bold and prescient online investments that the newspaper industry made in the 1980s and 1990s, and the industry's failure to ultimately find long-term success from those efforts. As Shafer pointed out, those who believe that newspapers came late to the Internet are wrong. In fact, they were very, very early. Rather, newspapers' abysmal failure to build great businesses online was a direct result of their incredibly narrow-minded focus to make online work within the same "locked-down" look, feel and content control paradigm of their existing print distribution model.
Newspaper executives chose to sacrifice the interests of their readers and their advertisers by their stubborn refusal to embrace the Web for what it could be -- a better and lower-cost platform for interactive delivery of local news, information and commercial communication (think Craigslist or Google) -- as compared to what they wanted it to be (a way to sell and deliver "locked-down" content products in "walled gardens") which neatly fit in their "trees to trucks" vertical monopoly mentalities. That was their death knell.
The second great post was by Mark Cuban, of Broadcast.com and Dallas Mavericks fame, on blogmaverick.com. Mark wrote about the symbiotic relationship between local print newspapers and local sports franchises and lamented that as newspapers shrunk or disappeared, local sports franchises were among those that would suffer greatly (as a sports franchise owner, he cares about this issue a lot). As Mark noted, most of the local sports coverage currently available online is not very good, and its readership pales in comparison to the sports readership of local print newspapers. To help sustain local print newspaper coverage of pro sports into the future, Mark suggests that newspapers and professional sports franchises create cooperative-like joint ventures, where the sports franchises substantially underwrite the cost of newspaper coverage of their sports and teams. Mark argues that the investment to keep newspapers' sports sections alive is much less than the cost to try to build entirely new media channels to recapture those audiences if the newspapers disappear. I think that Mark's idea is a great one.
Of course, as Mark recognizes, and as many of you are thinking as well, most in the newspaper industry would reject cooperative structures out-of-hand, arguing that they would threaten the wall between "church and state" and the historical impartiality of newspaper news.
I strongly disagree on both points. First, that is the way the "newshole" has always operated -- newspapers print as much news (and news of the type) as advertisers and subscribers have paid to support. The "newshole" both predates and is preeminent over the notion of church and state. The size and structure of a daily newspaper is almost never dictated by the amount of news that occurred the day before. Rather, it is largely a function of how much advertising was sold for that day. Auto sections exist because car dealers pay for them. It's that simple. The same holds true for food sections and grocers. Mark's idea is no different.
Second, the notion that the purity of newspaper journalism is the cornerstone upon which today's great metropolitan newspapers were built is revisionist history. Most of today's great newspapers were built through achieving dominant distribution in their markets, not through delivering better journalism. Most U.S. cities used to have two or more competitive newspapers. The eventual winner was almost always the one that won on the battle on distribution or advertising, almost never on journalism. Great journalism came later. For example, the Philadelphia Inquirer didn't become a Pulitzer Prize-winning machine until after it put the Philadelphia Bulletin out of business (and we won't even get into the role that some believe that organized crime may have played in that victory). Only after that the Bulletin was gone did the Inquirer have the ability to invest outsize, monopolistic profit margins into great journalism, which is exactly what it did. The same holds true for many of what we see today as great, "journalistic," metropolitan newspapers. Pulitzers don't make great newspapers. Local distribution monopolies make great newspapers.
Why do I make these points so harshly today? Because I believe and hope that only if and when newspaper companies and their executives truly understand why their franchises are where they are today, will they be able to actually build new digital businesses that can thrive in the future. What do you think?
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As far as the Mr Cuban's suggestion, you need to look no further than Long Island NY. This is the place where the Dolan's own Cablevision, the Knicks and the Rangers and recently purchased Newsday. I still read and buy a lot of print newspapers, including Newsday. So far it looks like their writers are still independent. However the Knicks don't suck this year and we don't have Isiah Thomas to kick around anymore, so it would have been interesting and more tell tale if this kills editorial atonomy.
I spend hours on the Internet each day. But the problem with the Internet is that much of the Internet's content comes from people or groups with an agenda and no editorial boards looking over their shoulders. Frankly, I don’t really know who to believe. As bad as we think newspapers slant the news, we haven’t seen anything yet... especially if we loose the independent perspective of today’s newspaper writers.
I believe that your article is a little too arrogant and dismisses an institution that helped make America a free, democratic society assisted in giving people like you and me the right to scream as loudly as we do, whether we are right or wrong and whether others like it or not.
One side note: One of my greatest pleasures is to sit with my wife, enjoy a cup of coffee and read the newspaper. I hope that you are wrong and newspapers, in one form or another ride through these tough economic times.
As usual, you're at the bleeding edge. With all respect to the other posters, Dave may be slightly ahead of the curve here, but his overall thrust is prescient. The notion of "online newspaper" and "newspaper industry" are less relevant by the day. (Several of us on another blog were accused the other day of being "triumphalists" on this point. The accuser apparently doesn't grasp the sentimentality one can have for the envelopes of one's first bylines, dating to the 1970s.)
Echoing too many other commenters above: Online news and information? A heady and worthy topic. Appending the six letters 'papers' to the conversation? Not so much.
-tgd
Some of us did “get it’ but we were rarely let alone enough to succeed in the space because the old-school, publishing “experts” “knew better”.
Forcing old models and assumptions on those of us in the interactive space killed moral and revenue.
Demanding rates that were too high when compared with other options because of the ego the publishing caste had about “our readership and our brand value and influence.” Build it and they will come doesn’t work when there are more and better options. Monopolistic thinking fails when the distribution is no longer a controllable asset.
Fear that by innovating in a way that would allow us to do the smart or right thing for the advertiser’s ROI because the competition would “figure it out.” Not realizing of course that building a culture of innovation would always keep us 10 steps ahead of the competitors even if they did copy us. (and they did, most often doing what we had set out to do much better.)
The biggest killer was compensation models. Everyone was paid based on what their fiefdom produced, not how well the company did. Therefore, we in the interactive side were not helped in accessing print-side clients. Middle managers would talk a good game of introduction and openness but when it came right down to it, their bonus and annual review was based on how much print was sold. There was no financial motivation to succeed as a company, only as individual silos. Old guard print VPs scoffed, openly and in front of advertisers, that online was viable medium – hubris driven by fear, ignorance and compensation goals.
Finally, the issue of motivation. The print industry has enjoyed a dominance built on a century of portability, distribution control and resulting market penetration. The business development culture in the early and mid 90’s was still one of “don’t fix it if it ain’t broke.” I know, I was told that by my first sales manager there when selling outside, display advertising to the auto industry. The culture did not need to innovate or be aggressive. We REALLY were order takers. (As much as that still bugs me to admit).
Even in early 2000, 2001, there was this attitude of “it will come back.” Gary Pruitt of McClatchy was often quoted as saying “we’ll be the last Dinosaur standing.” This was a statement of pride and arrogance and one that was meant to inspire and calm us. It didn’t then, doesn’t now, and may have turned out to be prophetic in a way he did not intend.
A world without a daily newspaper would be lesser for it. I hope the turnaround happens. I will be curious to look back on the state of the might daily years from now.
I would like to see the effect jettisoning a real-world print version (PC Mag, Christian Science Monitor) has on online readership, however. The reality is there is an overlap, with the print versions driving people online. With no print versions at all I expect readership to dwindle readership significantly, to the point of unsustainability.
It is no longer possible for a news organization to control an area, because the online costs of distribution are close to zero. Anybody can start a blog or a website. Yes, news gathering is expensive and skilled, but don't forget that the majority of a newspaper's costs are not accounted for by editorial.
In theory at least it should be possible for some redundant reporters to create an online presence covering the same beats as they did as journalists. They would have the potential to attract a variety of revenue streams from sponsorship from local sports franchises to Google AdSense. I agree that initially it would not be very profitable to run these sort of highly local blogs, websites or whatever the internet word du jour happens to be. However, they all have the advantage of being highly scalable. In other words our redundant reporters might be supporting themselves with other work or their redundancy checks, at least to begin with.
I think this sort of bottom up organization has much more chance of success than the various attempts to set up networks of local microsites which provide most of their content through targeted news feeds. It's getting close to the old newspaper model when the editor, reporter and proprietor were the same person. It also mirrors the way successful blogs tend to be run by people with a specialized knowledge and passion for a subject. There's no reason why this shouldn't apply to a district rather than, say, a sport, type of gadget or whatever.
Just a thought...
The second issue no one wants to talk about is the staggering debt loads newspaper companies face. Most individual newspapers at McClatchy, Lee and Tribune are running positive cash flow in their local markets, even in this advertising downturn; but the parent company debt is strangling these newspapers so they can't survive this severe advertising recession.
The Buffalo News owned by Warren Buffett is making money even in this severe advertising downturn, because it has no debt like every business he runs.
First, major sports teams (I am not dealing with minor league sports or secondary sports coverage here) are in markets large enough that some sort of daily newspaper will continue to exist. There will be daily sports coverage in Detroit even, as they plan to do, to limit home delivery to certain days of the week.
Given the rise of broadcast sports at the national, local and local cable level along with sports talk radio over the last twenty five years, there is no lack of discussion or insight. That is even before adding internet information sources to the mix.
This includes the .com version of a daily newspaper, other sports media related sites, national sites (ESPN, Sports Illustrated) and even sports team and league controlled content sites.
I am in the interactive world although my roots are in print media. I still read the daily newspaper, receive the Wall Street Journal at home and buy USA Today a day or two a week. I enjoy being able to read the column in the sports section by the beat reporter for the Angels or Lakers (I am in Orange County) and review the box score, but I am certainly not lacking information in general on the teams or players.
You were right on the money with every point. You outlined the very simple steps newspapers needed to take to not only have an online presence, but to be a leader in thier own local markets and serve communities.
If only they could get the Mr. Peabody's Way Back Machine and do it all over again.
As I head to the last NAA Newspaper conference in a few weeks, (the last one I will more than likley ever attend) I wonder if they will all still be drinking the koolaid.
Makes me sad. But them again I now spend 10 hours a day online. I never spent that much time reading a newspaper.
Newspapers are squandering their primary asset without even remembering what is it. Newspapers have been successful because they are an "Authoritative Source". Not an advertising medium, not a "we deliver eyeballs", those are a result of being an authoritative source. What is an Authoritative Source? When I say "Harvard University", the "Mayo Clinic", the "Library of Congress" what do you think of?
A town's newspaper did/does have the same resonance within their community.
For example, a ten-year old girl may not read the LA Times, but she is certainly familiar with it. If the LA Times shows up at her school and prints her classmates picture in the paper, this experience will stick with her and create loyalty.
When are these guys going to realize that there is not an "online newspaper industry"? Yes, print will be around for years, and newspapers serve a vital need, but when it comes to online - they are an online publisher! They must attract and sustain an audience in the online world, not just try to port print readers to a web site.
So why not look to the Internet for news. It is at least as trustworthy and a lot faster -- and smarter.
Gene
Second, Cuban's idea is interesting but why a joint venture? Doesn't advertising serve the same purpose? With the huge salaries that pro athletes are paid, the owners need to squeeze other costs and maximize revenues. Newspapers won't do that for them. If he thinks it's such a good idea, why doesn't he do it himself?
I love newspapers and hope they survive but I am concerned that the current ad climate, economic climate and move to the internet dooms their current business model to the dustbin next to the buggy whip, stable and ice house category.
What has slowed this process down is the timid but understandable idea of holding on to the substantial revenue streams (subscriptions, classifieds, retail advertising) for as long as possible, rather than make one clean jump to a less profitable online model. Would you dump 7 figure profits now for long-term survival at mediocre cash levels? Guess it depends on how close you are to retirement...
Dave, will you post the presentation on-line after delivery?