News Leadership 3.0

September 18, 2008

Escaping the velvet coffin

@ONA08: Print is not ready to die,
but online promises longer life

“It’s going to come down to freeing yourself of the print model but not abandoning it.”—Lauren Rich Fine on the business model of the news industry @ONA08

The final panel from the Online News Association conference last week tackled the business model for the struggling print news industry. The panel comments and ensuing discussion offered a telling snapshot of the bind in which many traditional news organizations find themselves: How to you keep producing the print newspaper, which still brings in most of the revenue, while adopting strategies and practices that push more and better content online?
A big part of the conundrum, of course, is resources. The print newspaper model is very labor intensive, not particularly efficient, and increasingly costly to produce and distribute. News organizations are cutting people and other costs. An equally big part of the problem—I argue—is attitude and culture—people steeped in the newsroom of old have a lot of trouble discerning outmoded practices and letting them go so they can move on to more useful work.
The tension around the question of print was abundant at ONA. The panel on the business model focused on how to save a hypothetical local newspaper with an infant Web site. Members of the audience questioned why the panel was talking about print newspaper at all. Sorry folks, it’s way too soon to abandon the print newspaper. Instead, editors must increasingly define it as a niche product for a very specific audience (and charge that audience more for print) while moving as much journalism and other user resources online as quickly as possible.
The challenge feels something like this nightmare scenario: You are locked in a velvet coffin. Your challenge: Houdini like, you must extricate yourself gracefully, without damaging the fine, ornately carved wood or velvet lining. Oh, and you have to get out quickly, because the coffin is shrinking and its walls are closing in all around you. Any minute now, your once comfortable coffin becomes a vise from which you will never be free.
With all respect to those in the ONA crowd who were frustrated with the print emphasis, I liked the business model panel for its focus. In a refreshing move, the organizers asked panelists to look at a specific news outlet so we got more than wise generalities.
Here’s the scenario: The Hometown News is losing money on a traditional platform. Its business is ad- and circulation-supported, primarily. Less than 7 percent of company revenue comes from hometown.com. The newsroom is facing immediate cuts of 20% due to layoffs and buyouts. No new money for capital improvements and equipment. Web traffic, circulation, and credibility is stable, however blogger, aggregator and other. Public opinion of the entire brand is suffering. Hometown News publishers and editors are confused about where to invest new resources, should they get any.
Here are ideas from the panelists (based on my notes and the session powerpoint (courtesy of Amy Webb)):
Eduardo A. Hauser, CEO, DailyMe.com:
“Content creation cannot be tied to a platform. It must be multiscreen.”
- Consider separating journalism from other functions. “Although journalism and newspapers seems inseparable, they are not. Paying for journalism is different from paying for paper and ink delivered to the home.”
- Slowly increase the price of home delivery. “I suspect many people who were going to cancel their newspapers for cost have already done so.  I also suspect that the largest churn is coming from recent subscribers.”
- Examine news gathering costs. “Keep reducing the cost of the news gathering organization.  Focus on achieving the right balance between audience interest and investment in national and international news gathering.”
- Grow use of electronic editions and reduce print-on-paper and delivery. “Regional and local newspapers are losing money on select editions, not always on the entire week.  So -for example- the Monday, Tuesday and Wednesday editions may be losing money, but the rest of the week is not. Newspapers need to find a way to create a balance between editions.  Can Hometown drop select subscriptions from home delivery and, instead, drive their readers to the web?”

Lauren Rich Fine, Media Analyst, Practitioner-in-Residence, Kent State
“Create something people value and will pay for. If you don’t then you are stuck with the advertising model.”
- Push readers online. “Wean readers from print over a very long time but emphasize the pdf version. Contemplate giving away kindles and other similar devices in return for logging on at least once a day. Ultimately, a paper with(out) printing and distribution is very economic, but without readers it really doesn’t matter.”
- Redesign the print product.  Redesign front page to be highly local. Explore reducing or eliminating sections on given days and focus sections.
- Let national, international news become more of a commodity, i.e. use newswires, but try to present alternative points of view (perhaps like the magazine The Week and or online sites such as Huffington Post).
- Focus staff on Web site. Heavily promote content on the website. “Emphasize best of blogs, most viewed articles, etc. Heavily promote ability to contribute news and comments online. Use as much as possible in print with name attribution. Heavily promote a pdf version of the paper so readers remain beholden to true editing, ability to easily navigate and still browse all of the news. This also maintains all the previous ad positions. Heavily promote individual reporters; get them back in the community. Have them set up Facebook pages and put their articles in their status updates. It is all about dialogue.”
- Outsource printing & distribution.
- Attempt to let go reporters and have them rehired at non-union Web site.

Thomas Brew, Deputy Editor, MSNBC.com:
“I do believe print (revenue) can get to a place where it will sustain itself and online will be a lot more than it is now.”

- Realign resources. “HTN should spend its own resources strictly for reporting local news and information. Every other content category - national, international, major league sports, food, lifestyle, entertainment, etc. should be from syndicated content sources. Any editor or reporter not associated with local should be laid-off.”
- Merge newsrooms. “The print and online newsrooms should be combined, but not in a wholesale way. The editorial functions should segmented by media type - text, video, and images, with specialists in each of these areas producing content components that are used for print, desktop, wireless, etc. Most of the “print” journalists will be reclassified as “text” journalists.”
- Shift printing. “Printing should either be spun off as its own business that contracts with other papers for additional business or shut down and contracted out to other papers.  Either way, the capital and unionized labor tied up in the printing operations needs to be shed.”
—Reward innovation. “Profit sharing!”

Wendy Warren, Editor and VP,  Philly.com
“Once you uncouple content and distribution you can cretate all kinds of structures in the newsroom and advertising and all kinds of different products. The world is open… it makes you think anything can be invented and by the people who you have right now.”

—Radical restructuring. “Break up the company, reduce the newsroom.” “Hometown News immediately should begin to explore dividing the company into a content-generation business and a printing and distribution business. Each of these businesses would serve current customers - but would be charged with winning new customers as well.”
- Product options: Slimmer, rethought daily newspaper, news-filled, constantly updated, free Web site, targeted microsites, some of which could be for paying customers, a free newspaper, video shows for the site, for television partners and for syndication.

I haven’t included all the ideas, as many were overlapping. Much of the wisdom of the panel, I thought, came in ideas about how to shed costs (as painful as that sounds), particularly by rethinking printing and distribution of the print newspaper. While I agree that newsroom staffing has yet to find its level in the new world—and that level will continue to decline—rethinking production and distribution promises to at once cut costs and help re-focus and perhaps energize an increasingly smaller news-gathering operation.

(Historical note: I am not the first to apply the term “velvet coffin” to a newspaper. When I was a baby journo in Southern California in the late ‘70’s, reporters for the Los Angeles Times referred to their workplace as “the velvet coffin” because it paid well and had great professional status but offered few opportunities (they felt) to break through and shine. Who knew?)

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Exploring innovation, transformation and leadership in a new ecosystem of news, by journalist and change advocate Michele McLellan.

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