How news organisations are succeeding with reader-first digital transformation

Transformation, by Cornelia Kopp, from Flickr, Some Rights Reserved

Since 1996, in some way, I’ve been focused on digital transformation at media companies, initially as a front-line journalist but since 2005 either as an internal or external consultant in a wide range of roles. Topping my media newsletter today is the summary of a talk by Greg Piechota and George Brook about digital transformation at media organisations. They see successful digital transformation efforts not so much as being good at managing various products but rather by serving various customers.

There are a lot of great quotes in this summary, but Greg started by re-framing the issues around the pivot to paid as:

The reinvention is actually much bigger than just the change of a business model. It’s like the transformation of journalism from a mass market, industrial product to journalism as a service.

The digital transformation of newsrooms to become reader first, by Shelley Seale, International News Media Association

He walked through the model at The Guardian where the product hadn’t changed as much as the way that they captured value from various classes of users. “What they manage are not different products, but different sets of customers. Some customers want to contribute to support the mission. Some people want to pay for a certain user experience [mobile app, e-reader, etc],” Greg said.

I think his framing of how to become reader focused also made sense in terms of selling journalism as a process rather than as a product. By looking as journalism as a service to be sold instead of a product, then companies could re-orient around their “impact on the customer”, he said.

This dove-tailed nicely into a discussion with George Brock, former managing editor at the Times in London, about the role that trust played in this reader-focused, service-oriented model of journalism. Rather than summarise the entire post, I’ll highlight this cultural challenge that George highlighted in terms of making this shift to a reader-first orientation. “I think the bigger problem is that the kind of things we’re talking about involve, across both the commercial and the editorial departments, shifts of power,” he said. Indeed, and I would add that it also involves shifts within the editorial department. This is a great summary of a webinar to digest, and I’m really interested in INMA’s broader Readers First Initiative.

If you’ve got a story that you think should be in the newsletter, let me know @kevglobal on Twitter.

Clark Gilbert’s five business model ideas that are changing the news industry

After writing about how print-digital integration was absolutely the wrong response to digital disruption, I’ve been going back to more of the ideas of Clay Christensen and Clark Gilbert on how the news industry should respond to disruption. I would strongly encourage you to take an hour and a half of your time and watch Clark Gilbert speak at Harvard University’s Nieman Foundation. I had read his ideas, but he’s even more forceful and compelling in person (or via video).

Clark Gilbert, Deseret News – April 25, 2013 from Nieman Foundation on Vimeo.

He quotes the president of an online newspaper division:

Overall, the newspaper industry’s involvement in the internet has been one where it had a lot to lose and it’s been trying not to lose it, as opposed to starting from scratch and having a lot to win.

Gilbert has created a disruptive division that is all about winning digital opportunities. About 47 minutes in, he lays out five business model ideas that are changing the news industry and are helping his digital division grow at 40 percent year-over-year.

  1. Digital revenue should a third of your business in 2012 and half of your business by 2015
  2. A digital buyer needs a digital seller
  3. New channels are the difference between Transformation A and Transformation B
  4. Digital marketplaces (Not Digital Publishing) will win
  5. Dual transformation requires new organisation

And he says that number 2 is non-negotiable, and watch the video at 51 minutes to see why Gilbert is even more adamant about that now. Your jaw will drop. Seriously, this is worth your time.

They have four digital advertising channels:

  1. Companies that want a legacy-digital bundle
  2. Large local digital only
  3. Small local digital only
  4. National advertisers that do a significant amount of targeting and re-targeting.

He said that he recently noticed that the legacy-digital bundle sales had plateaued, but one of his other channels (he didn’t say which one) is growing by 70 percent year-over-year, which is just one reason why they have 40 percent year-over-year digital revenue growth.

Number four will interest everyone who is in local media. He says that digital marketplaces are winning local.

Gilbert makes an even more forceful case than he did in Austin where I saw him in April that integration, especially on the business side, was absolutely the wrong idea. When the Washington Post integrated its print and digital, digital revenue growth stopped. When the Dallas Morning news integrated print and digital, digital revenue growth stopped, Gilbert said.

Contrast that with Gilbert’s company. In 2009, legacy revenue accounted for 90 percent of the business and digital came only from 10 percent. In 2012, he said that legacy revenue channels would account for only 33 percent of overall revenue. Digital revenue is now bigger than revenue at their TV station and their radio station, and it will soon pass print.

I’ll just finish with this comment from Gilbert:

News is not a business model. It’s a public good.

However, you can build a business around the brand that you create with this public good.

Fellow journalists, you should be fighting for this kind of thinking because Gilbert plows back a third of all the profit from the digital division to fund the newsroom.

Everything you need to know about the internet | Technology | The Observer

Kevin: John Naughton has an excellent meditation about the internet and the pervasive search for easy answers. We're living through a revolution. Get used to it. As he writes, disruption is a feature not a bug. "By implementing these twin protocols, Vint Cerf and Robert Kahn created what was essentially a global machine for springing surprises." It's an excellent piece that looks at a number of the disruptive trends online such as how to deal with information abundance, which upends traditional economics that attempts to deal with the allocation of scrace resources.