Posted by Publishing newspapers with fewer pages and moving from daily to less frequently is not going to save that industry. Record labels thinking that they’re going to save themselves by releasing fewer CDs every year are kidding themselves as well.
They created this demand from the public, and it’s going to be a hard habit to break.
Today was another rough day for the media. Tribune Inc., the publisher of the Chicago Tribune and the Los Angeles Times (they also own some other newspapers and several television stations) declared bankruptcy. This news comes hot on the heels of last week’s announcement from Gannett – the largest newspaper publisher in the U.S. and the parent company of USA Today – that they are laying off more than 600 employees across its 85 daily papers.
Some might think it is way too late for that industry to save itself. Some say that these companies are going to have to come up with more innovative ways of delivering the news. How are these companies expected to grow record profits from publishing less pages, less frequently? The train of thought around this strategy is that they will be able to charge a lot more per copy and fill the fewer pages with more valuable and unique content. Do you really think that the more voracious news junkies are going to pay more for something smaller that is delivered less frequently? Do the publishers really think that this specific segment will be more profitable than their current one?
Cutting costs is not revenue generation.
The first thing any major corporation does in a scenario like this is cost cutting. They think that by trying to do the same things they have always done with less people and resources is going to change their current situation. This creates a vicious downward spiral. Instead, there needs to be a more serious focus on figuring out either an entirely new business model or what they can realistically expect in terms of profits by keeping the status quo or subtracting from it.
The Pulitzer Prizes (the awards for journalism, literature and musical composition) announced today that it will consider entries from online-only publications (do they have much of a choice?).
The music industry has been making similar moves, and it won’t be long before other industries try the same thing. They’re going to cut the amount of product they put into the marketplace as they cut staff and mask it with a PR spin like, "this will give us the ability to focus more attention on the more meaningful projects."
The other side is to embrace the digital world. It’s hard to fault some of the publishing and music companies here. The problem is, we’re probably kidding ourselves if we think that by embracing Twitter, Blogs and MySpace, that these two industries are going to be able to change much or find the record profits they were realizing in the days before the Internet changed everything we know about the news, journalism and how information spreads.
One thing is for certain: the current model for online advertising is not sustainable.
There is simply going to be way too much inventory with not enough interested advertisers. The future of media online is not going to be from generating revenues from selling a banner ad on top of their content. It’s going to have to get a lot more targeted, relevant and interactive to both the consumer and the advertiser. It’s going to have to move away from the current style of banner and display advertising. It’s not something obvious, and it’s going to be something that both publishers and advertisers are going to have to work very hard at together if they both want to have a sustainable future.
Do you believe that their current strategy of "less is more" is going to return the same kinds of dividends for them?
Never another podcast episode or article 
Newspapers are dead. Long live newspapers.
Old media seriously needs to catch up to the new reality, cause it just keeps going without them.
The telling thing for me? None of my kids have ever seen me read a newspaper, but my 4yo could explain to you what a blog is. I have fond memories of sharing sections of the afternoon newspaper with my parents. Getting two newspapers delivered even. No more.
I completely agree that less is more strategy is not going to pay dividends, nor will the current model of online advertising at newspaper portals prove sustainable.
However, I think there are real opportunities for major media companies to leverage the content and advice they create by:
1. Decentralizing distribution. Go to where the readers are with content feeds and applications that carry brand attribution and link-backs.
2. Re-imagining content in new ways. Not just adding links to share content, but provide information and advice in ways that can be directly applied in the context of someone trying to get something done. Here’s an example: http://tinyurl.com/5v4793
3. Incorporating interactivity. Interacting with information and advice is the hallmark of Web 2.0 and the essence of social media. Explore new ways to transform static content to increase brand engagement.
Having worked in a few companies during “right-sizing” periods, I completely feel this post. To cut costs, companies cut left/right/center, cut people, etc. This makes sense to a degree, but a very small degree.
A lot of companies, and indeed many industries simply don’t:
1) Look ahead
2) Think ahead
3) Adjust along the way
“Change” only happens once things are bad, and it’s the wrong change.
I’m of the school of thought that when things look like they’re heading south, start looking at other things to do. Not all will succeed, but many will fail – but it will help form … a plan.
Firing staff as a first resort? Knee-jerk reaction. Ok.. maybe not so much knee.
The leaders at newspapers haven’t a clue. They saw the Web coming more than a decade ago. And they blew it. Still, reporters are among the most competitive people I know. But they now compete with the world 24/7. They are outnumbered. Bloggers and Tweeter users are rising while the number of credentialed, professionally trained journalists are falling.
I believe that media is just going through a shift…a changing of the guards if you will. Environmental issues will be the excuse for less paper, forcing advertisers to spend their marketing dollars towards multi media content. We should not ask the question to why this is happening but to what can we do to make the shift a painless one.
Here’s a wonderful (and long) post from Seth Godin on how things could have been different for the New York Times:
http://tinyurl.com/6luaxo
No amount of marketing can save a product or service that doesn’t deliver the goods.
Papers aren’t in the business of news any more. They have to adapt and change to deliver [a] what consumers want and [b] what other channels can’t deliver. What that is, I don’t know, but I do know there are plenty of experienced reporters with great insights and rolodexes that none but a few bloggers can even touch.
Excellent post. The web is the only hope for this industry. We are not talinkg about a sudden death but an evolution.
This seems like an enlightened audience, I’d like some feedback on my Krugman Paradox -about news sites inability to generate economically sustainable ad revenues. http://metaprinter.com/?p=1075
Thanks,
Robert
There is a conundrum to the above post, Mitch, and every subsequent comment:
Community newspapers
The community newspaper is cutting staff, is experimenting with online media, may have RSS here or there, but is otherwise clueless about shifting their model. Moreover, until the bulk of its print readers are born after ~1950, local news operations won’t change despite my personal motivations to change their mindsets.
The national pubs are seeing the shift. The regional dailies are seeing it. The consumer trades are seeing it. But the locals can’t move, even if they want to, because of their demographic.
When the business environment changes to the degree we’ve seen in the newspaper industry, you need to consider 50-80% cuts in expenses. That means massive layoffs and restructurings.
Indeed, “Publishing newspapers with fewer pages and moving from daily to less frequently is not going to save that industry.” But the correct answer is something far more radical, not less.
For example, I would have every reporter work remotely. This would open up opptorunities to downsize infrastructure and editorial staff.
We’re talking about a culture that feels there’s no point correcting grammar in our universities any more. Is it any wonder this day would come?
How will the online advertising model change? I know this article is in the context newspaper and music sources, but we’ve already started to develop the cheap habits online that have watered down our legacy media. I’ll use a third party example – Brogan’s post on November 30th “Why faceless untargeted ads will exist for a long time”.
We know what we like, we know what we don’t like, but as consumers we continue to act on impulse and skew the numbers.
Dr. Tantillo (‘the marketing doctor’) did a post on newspapers a while back on his branding blog:
“In my opinion, newspapers were able to get away with ignoring their Target Markets for years.”
“What we’ll probably end up with is fewer newspapers both online and in print, smaller newspapers (in length and number of staff) and a greater emphasis on content that is highly targeted to readers’ tastes and when/where these readers read.”
Full post: http://blog.marketingdoctor.tv/2008/11/02/brand-winners-and-losers-pg-and-newspapers.aspx
While I have to agree that the newspaper is taking the route of the buggy-whip, I still enjoy reading them with my morning coffee more than clicking online. I think that the role of the paper moving forward will be more of an enhanced community / regional bulletin than anything else. The question will be however, will people still be willing to pay for it?
it’s going to be tough for these guys to continue to deliver with their current centralized model.
I think what we will start to see is a whole host of smaller, internet-only news orgs popping up, with smaller, but more loyal audiences, and a more targeted focus: say: city municipal issues, sports, energy affairs, environmental affairs, national politics, state/provincial politics etc.
the role of the centralized “newspaper” increasingly will be to do the important work of sifting through the various reports done by the focused net groups, and publishing those both on the web, and i suppose in print. maybe the “big” centralized guys will pay revenues back to the little decentralized, focused guys.
irony: the centralized newspaper business might start to look a lot like bloggers: the authoritative voice that gathers all the news out on the web, and presents the most relevant and important stuff accross a broad range of topics to its readers, with commentary.
in addition they will continue to have to have their own staff of writers etc, but i think pared down and focused *is* the way it’s going to go.
to your question, is paring down the way to go? I’m not sure, but when you look at your saturday newspaper, there sure seems to be a hell of a lot of junk in there. when paper was cheap, and you had to hire writers to write junk, maybe that made sense … but when zillions of people write junk for free, and producing a paper version of your paper is getting more and more expensive, can you afford it?
huffington sure made a smart move: they don’t pay their writers anything!
Technology moves too fast for the majority of our society. We rapidly invent things that change the economic landscape leaving those who can’t adapt out in the cold. Baby boomers are use to having jobs that last for 30-35 years. When change happens to this group they fight to hang on to their livelihood. The newsprint business is run by old school thinkers who; much like their music industry counterparts, choose to fight the obvious. Too little too late.
It isn’t just the newspaper and publishing industry that in these economic times decides to cut, cut, cut. The first place many companies seem to cut is marketing/advertising and human resources….before looking to see if perhaps there is another more effective way. Whether it be cutting operation costs by having employees work remotely, or looking to the web and social media rather than other more costly and hard to measure advertising and marketing projects. Sometimes all the company needs to do is look to their employees for answers, but sadly most don’t.