It’s not news that digital technology is driving rapidly changing consumer behaviour, and while it took some time for that shift to affect the economics of the media, the disruption is now in full swing. While the metered paywall has given a number of legacy media companies breathing room, to use the bump in reader revenue as a base to build on rather than a temporary reprieve from the dust heap of history will take focused, innovative thinking.
I’ve been involved in journalism innovation since 1996, when I took my first job as an internet news editor. I’ve held pioneering positions at major news organisations such as the BBC and The Guardian. Both of those organisations can be innovative in ways that have proven difficult for other media organisations because they aren’t purely commercial. How do other news organisations keep pace with their audience and just as importantly create new revenue opportunities?
Finally, success in legacy media companies (newspapers, magazines, TV, and radio) is driven by individual success – stardom – not by collaborative team success. The internecine, hand-to-hand combat inside legacy media companies is about who gets the credit for a hit or success, not about innovation or team success.
I’ve seen this first hand, and I used to say to colleagues, “Our real competition isn’t down the hall but across town” at one of the other newspapers, broadcasters or now one of the digital news and media startups.
This isn’t unique to media companies. Office politics is pretty universal. One of the benefits of having done consulting both inside and outside the media industry is that I have realised that positive corporate culture is rare and needs a lot of work. In media, you’ve got a lot of creative people, and journalism is populated with professional sceptics who question everything, including management’s latest change strategy.
However, that doesn’t excuse just how frankly, effed up the culture is at a lot of news and media companies. In the past, when owning a media company was a licence to mint money, we could afford these poisonous, dysfunctional cultures. We can’t anymore, and besides, it’s a lot more satisfying to succeed as a team than fight amongst ourselves on the decks of sinking ships.
As Twitter users, we all find ourselves occasionally saying: This is a > 140 character discussion and, over Friday night, I found myself in one with Dan Pacheco, a fellow digital journalist in the US whom I know by reputation but have never met. I know of Dan through some of the great work that he did at Bakersfield California developing a very excellent social media platform, Bakomatic, and the online-to-print service, Printcasting now Bookbrewer.
We got into a discussion on Twitter about the recently announced cuts at the Times-Picayune newspaper in New Orleans. Its parent company, Newhouse Newspapers, is cutting the print run from daily to three times a week and reportedly slashing up to one third of staff. Newhouse is reportedly rolling out a model that it tested in Ann Arbor, Michigan, (in part using a regional news site that I worked on for a year from 1997-98, MLive.com).
Dan asked on Twitter:
The Times-Picayune is moving to 3 days/week print. Why not 1 day/week magazine and pure digital focus? http://t.co/QMy9TQXo
First off, I want to clearly lay out where I’m coming from because I got the impression that Dan assumed I was coming from a print-focused position. I wasn’t. My working assumptions:
The present of content is digital, but most newspapers in the West squandered early opportunities to make a painless transition to digital.
Many, if not a majority, of newspapers won’t make it. Digital distribution erodes the advantage of geography, and digital economics simply won’t support the volume of newspapers we have now.
That said, we still know very little about what a purely digital local news business looks like. We only have a few examples and many are very small and focus on specific niche coverage.
There is a lot of work to be done to develop digital products and related revenue streams to support a local digital news offering at scale. It’s a worthy challenge, but we digital journalists, editors and sales teams have a lot of work to do.
I wasn’t trying to say that newspapers should cling to print, rather that while print is a burning platform, there isn’t yet a digital lifeboat to take news organisations to safety. While digital advertising has boomed over the past decade, taking only a brief pause during the financial crisis to decline slightly, US newspapers have only managed to grow their digital ad revenues slightly. Digital ad sales grew from $7.3bn to a staggering $31.7bn in the US between 2003 to 2011. But newspapers there have only grown their digital ad revenues from $1.2bn to $3.2bn, according to Alan Mutter. Newspapers actually capture a lower percentage of digital ads now than they did in 2003. Many US newspapers in the unenviable position of having a radically deteriorating print business and a still nascent digital business.
As I said on Twitter, I had just read news business analyst Ken Doctor’s assessment of the News Orleans strategy. He described it as “shock therapy” and a “forced march to digital”. As Ken points out, the hope is that the paper in New Orleans can retain the vast majority of their print revenue while also cutting some of their print related costs, although he is sceptical. They might retain 80 to 90% of their print advertisers but not 80 to 90% of their print advertising revenue by going to three days a week.
The newspaper will also most likely be consolidating some administrative costs so hopefully the operation will be more efficient in other ways as well. Printing three days instead of one makes some amount of business sense, but if you cut the print run to one day, would the loss of revenue wipe out some, or all, of the advantage of the print cost savings? Are any US newspapers actually in the position digitally to shift to one-day-a-week print without cutting staff not by a third but something even more drastic, maybe 70 to 80%?
Just like Ken, I wasn’t making a pro-print argument, I was making the observation that the paper and its parent company’s digital business isn’t well positioned for this transition. Ideally, they would have laid this groundwork years ago, but they, along with most newspapers, haven’t. Ken writes:
I’d call it a forced march because it doesn’t look like the Times-Picayune, or its new successor, the NOLA Media Group, is yet ready for the digital transformation. It has been making a digital transition, and there’s a big difference between the two. It doesn’t have a digital circulation strategy yet in place; though about a fifth of U.S. dailies do. Digital circulation is key to making this work, so that core print readers become more likely to transition with the enterprise — and keep paying their monthly subscription bills.
Like many newspaper groups, there are few good, easy answers for Newhouse Newspapers. Dan believes that the time for half moves is over, and I can understand that line of thinking. He said:
@kevglobal Newspapers tend to focus on how to preserve staff for an outdated print model rather than meeting local needs in any medium.
Yes, the culture of newspapers needs to be shaken up. It needed to be shaken up a decade ago but the industry thought it dodged a bullet with the dot.com crash, which it viewed as a fad that it was lucky not to have invested too much money in, and sat on its laurels. I agree that newspapers need to stop talking and move purposefully in the direction of digital, but I also agree with Ken Doctor that Advance’s approach looks like shock therapy than a strategic embrace of the future.
My big fear is that by cutting print runs from seven days a week to one would necessitate traumatic cuts to editorial staffing, leaving such a small editorial staff that it would have difficulty attracting sufficient digital revenue to sustain it, even in its leaner, digitally focused form. Everyone points to the pure digital Seattle Post-Intelligencer which went from a newsroom of 150 to 20. When you make cuts that deep, you lose good people and you lose capacity. Twenty people just can’t do the work of 150, no matter the efficiencies possible with digital tools.
Digital may be the future, but the vast majority of revenue still comes from print, and we need to see more innovation in both print and digital products that will reinvigorate income streams. It can’t be all about the shiny; it also has to be about financial sustainability. For example, mobile is a huge opportunity to reach audiences, but if Facebook’s revenue is threatened by the shift to mobile because it haemorrhages ad dollars, how will news organisations make money from it?
All journalists, whether print or digital, should understand the news business and be constantly thinking of ways that they can add value, not just for their audiences but for the business. We need more innovation, more experimentation, and smarter thinking about how we fund news. This isn’t about the culture wars anymore, it’s about making the difficult transition to a digitally-focused, multi-platform future.
Here is the entire conversation that Dan and I had on Twitter for context:
Guardian News & Media, the parent company for both newspapers, lost £33m on a cash basis for the year ending 31 March, only slightly less than it’s £34.4m loss for the previous year. Guardian Media Group chief executive Andrew Miller warned that the group could run out of money in 3-5 years if things don’t change. I heard sobering burn rate figures when I was at The Guardian. I covered the dot.com boom and heard start-ups talk cash on hand, but I never expected to hear this from a major media company.
Some things leapt out at me: They reported £47m in digital revenues out of a total of £198m revenues. Digital made just shy of 24% of total revenue. That’s good going, and most newspapers would kill for that percentage of digital revenues. (Apart from the FT, which is making a killing from digital: 30% or revenue from digital now and projected to reach 50% of revenue by 2013.)
This came out from the presentation to Guardian staff:
Unaudited results for the year ending 31 March showed that revenues at Guardian News & Media, the immediate parent of the newspapers and guardian.co.uk, fell to £198m last year compared with £221m the year before, a fall in revenues that reflected a sharp fall in classified advertising. Recruitment advertising has fallen by £41m in the past four years.
The Guardian is seen as one of the most innovative newspapers in the world. It was why I enthusiastically joined them in 2006. They announced they were going web-first in June 2006, but that didn’t and doesn’t change the fact that the newspaper is burning through cash. To future of journalism folks, The Guardian is indicative of challenges facing the industry, but so far it’s not showing the way forward in solving those challenges.
Feel free to give The Guardian credit for being innovative, but everyone in the journalism community has to be more honest and realistic about its business challenges. It’s in the same sinking boat as a lot of other newspapers.
Guardian Editor Alan Rusbridger is saying that not only will they publish first to the web but that they will do less in print. The Guardian’s article says there will be no job cuts, though they have to find £25m in savings. Yet Mathew Ingram at GigaOm quotes Alan as saying there will be editorial job cuts.
Mathew also quotes Alan as saying that they have identified at least ten different revenue streams. That’s comforting. But it speaks volumes that The Guardian’s own article doesn’t mention new revenue, and Alan only mentioned existing digital revenue streams to Mathew.
The Guardian needs an intervention. Digital first will not be enough to save it. It needs to remember that although they are supported by a trust, that is not a licence to completely ignore business realities. Here is my bit of tough love:
1. Building a sustainable business is not evil
The Guardian needs to realise that making money to support journalism is no sin. There is a lot of moral space between being a sustainable journalism enterprise and being a voracious media mogul like Rupert Murdoch. I’d love to see The Guardian demonstrate how to create a financially sustainable journalism business, but it will have to challenge its own anti-commercial culture.
2. Editorial innovation alone is not enough
The Guardian is innovative, but it also shows that technical and editorial innovation are not enough on their own to guarantee a sustainable journalism business. Digital first without a business focus will still leave it in dire straits. If The Guardian is going to devote 80% of its resources to digital, as is implied by Dan Sabagh’s article, it has got to develop new revenue streams to support its digital first strategy.
3. ‘Open’ without a business model is an empty ideology
I love the open web. I think The Times hard paywall is foolish. However, the ideology of open from The Guardian lacks pragmatism. The Rupert v Rusbridger battle makes a good media ding-bong, but neither positions are proving able to solve the problems that face newspapers. (Yes, I’ve seen Guardian digital strategist Matt McAlister’s presentation on generative media networks. Hopefully, some of that strategy will be part of these 10 revenue streams. At the moment, I remain unconvinced.)
4. You’ve got a golden brand. Capitalise on it.
At the risk of sounding critical, I joke with people that The Guardian has the brand of Apple but the business focus of Twitter. Guardian readers are some of the most loyal in the world. When The Guardian recently cut short its well regarded local project, readers offered money to help it continue. Most newspapers would love to have that affection and loyalty. If The Guardian can’t capitalise on its loyal audience, incompetence will be the only explanation.
A friend of mine, who had taken a buyout from a US newspaper, said to me after visiting The Guardian a few years ago:
The Guardian seems like a great place to work when the times are good, but it doesn’t seem capable of making the tough decisions when the times are tough.
The Guardian has time to make some relatively easy decisions to ensure its future, but it needs to get serious, not just about digital but about its business. The Guardian’s often lauded as the future of journalism, but without a sound business model, it doesn’t have a future.
I’ve been meaning to write about newsroom integration for quite a while and so I’ve written about it for journalism.co.uk. The article is based on conversations that I’ve had with journalists in newsrooms around the world and also from some of the well known examples in the industry, including the experience at the Washington Post. A lot of the quotes are unattributed, but I can say that there is a remarkable consistency to the comments I’ve heard.
Last summer, I was speaking to an award-winning digital journalist, and in terms of the fight for integration at his organisation, he asked: “Was there a battle that we lost?”
I want to say up front that I’m not opposed to newsroom integration. In many ways, I am a big booster of bringing digital newsrooms and traditional print or broadcast newsrooms together. I have worked at organisations where the newsrooms have been physically and organisationally separate, and it’s never been productive. I started working in an integrated newsroom in 1998 when I joined the BBC working in their Washington bureau. Not only did I work closely with radio and television correspondents and producers, but I also covered stories for radio and television. Working together was really positive for me and the broadcast staff. My esteemed former colleague Paul Reynolds used to tell me on a regular basis that I was the future of journalism, and I had all the support that I needed and more from bureau chiefs Andrew Roy and Martin Turner. It was a collaboration of mutual respect.
I think that Jim Brady has it spot on when he said that digital editors still need the autonomy to push news organisations in directions that they might not naturally head. Digital innovations are still often counter-intuitive to leaders in legacy media. We still need people who think different at the table.
However, based on conversations with fellow digital journalists and editors, newsroom integration has been very difficult for them, especially for those organisations that have tried to integrate organisationally as well as at the platform level. Many digital editors and sadly far too many digital journalists have been pushed aside or in some cases completely pushed out. From a business standpoint, especially for those news groups suffering financially, the motivation has been efficiency. As Francois Nel said in the piece, integration has to be about efficiency and effectiveness. Francois is the director of the Journalism Leaders Programme at the University of Central Lancashire, and he’s worked with WAN-IFRA to help newspapers groups including the Johnston Press in the UK with their integration efforts.
I’m surprised that news groups continue to pursue the ‘pure’ integration model because for those organisations that moved early in that direction, such as the FT, many have since pulled back. There is a realisation that print and digital often serve difference audiences, and I think this is especially true as digital has continued to develop. Editors now understand (what I’ve known for years) digital journalism is a practice with its own skills and proficiencies just as print reporting or broadcasting. The dream of the super journalist equally proficient at everything was always more myth rather than reality. Few journalists excel at all roles, and even if they did, the demands of any one role, especially in the age of shrinking staffs, would cause sacrifices to be made, corners to be cut.
One area I only touched on briefly in the piece for journalism.co.uk was the role of middle managers. Francois said, in a quote that didn’t make it in the final piece:
The most critical person in the any individual’s daily work life is his or her line manager. And, as such, the best examples of change management are those where courageous and visionary leaders empower and equip middle management to handle the fallout.
Right now, middle management is one of the key issues in terms of integration. The subject comes up again and again in the conversations that I have with digital staffs. Even at organisations with strong digital leaders at the top and willing staff, middle management can still stop change dead in tracks, and often this where the energy comes in terms of marginalising digital leaders. They have the most invested in the status quo and least motivation to change. Middle management can and should lead the charge ahead and create a constructive environment for collaboration. However, in a lot of organisations, this is where change lives or too often dies.
Tomorrow I fly to Washington ahead of the Online News Association conference. I’ll be doing a pre-conference session next Thursday on real-time coverage with Kathryn Corrick, digital media consultant and ONA UK Chair, Gary Symons of VeriCorder Technology. Kathryn is going to focus on desktop-based real-time coverage. There is a lot that is possible from the newsroom, and often when you’ve got a lot of journalists in the field, you need someone back at base to help collate and curate all the content. Gary is going to focus on multimedia, especially some of the tools that Vericoder offers. I’m going to focus on a wide range of mobile tools and techniques highlighting some of the examples of what news organisations and innovative journalists are doing.
Two years ago, I was traveling across the US on my way to Washington covering the 2008 elections. It was my third presidential election. I covered the 2000 and 2004 elections for the BBC. Every election, the mobile technology got a little more sophisticated and a lot more portable.
In the 2000 election, Tom Carver and I traveled across the US in six days answering questions from the BBC’s international audience. We used portable satellite technology, a mini-DV camera and webcasting kit to do live and as-live webcasts. The satellite gear was similar to what would become standard for live video feeds from Afghanistan. We used it in much less threatening locales such as a bar in Miami to talk to college students about apathy amongst youth. The gear weighed about 70 pounds, and it was a bit temperamental. I had to buy a toolkit in Texas and perform emergency surgery in a Home Depot parking lot. That definitely wasn’t in the job description when I was hired, but we got the job done.
In 2004, everything had changed. I used an early data modem to file from the field. The BBC content management didn’t quite work in the field, but we could at least send text and images. Richard Greene and I worked to engage our audiences, again fielding their questions and bringing them along on our journey. I blogged through election day, and that blogging experiment would send my career in a radically new direction.
It would be 2008 when I finally realised my dream of being able to work almost constantly on the move publishing via Twitter, Flickr, Facebook and the Guardian blogs via a laptop and mobile modem and a state-of-the-art multimedia mobile phone, the Nokia N82 . The picture above shows my road trip kit. It did more with much with so much less weight than the gear I lugged around in 2000. I could fit it all easily in a backpack. I had my laptop, a data modem, a power inverter, a Nikon D70, a geo-tagger and my Nokia. I geo-tagged all of my pictures, posts and most of my tweets. Before anyone knew what Foursquare or location-based networks were, I saw an opportunity to geo-tag content to map it and eventually deliver relevant content to where people are. I have a detailed explanation of how I did it.
The trip was the realisation of a journalistic dream; I could report live while staying in the middle of the story. I could use my phone to tweet and upload pictures from the celebrations on the streets of Washington. This was two years ago. The technology has moved on, and now it’s easier and the the video, images and audio are better. It’s now easy to broadcast live video with nothing more than a mobile phone.
We’ll cover the latest developments and then go out on the streets of Washington just days before Americans go back to the polls in this critical midterm election. There are a still a few slots left so if you’re coming, come join us from 2-5 Thursday 28 October.
I had to dash out for a lunch meeting, but I was happy to make it back for Marc Reeves keynote. He is the editor of TheBusinessDesk.com West Midlands. I found myself applauding over my morning coffee when I read his recent speech to the CBI. His frankness and lack of sentimentality was refreshing. He started that speech with this statement:
Journalism has no God-given right to exist and journalists are owed a living by nobody.
Here is summary (not word perfect and and many places paraphrase) of his keynote at NewsRewired. It was nice to hear his lack of sentimentality in person:
Three main points, in a niche not enough to be a journalist, have to provide other stuff too. Need to provide more than just information. Niche audience needs a niche approach not a mass market approach. Why has this subject risen up the agenda?
The internet didn’t create this. We publishers forced them into buckets because it was more profitable for us. By lassoing 100 interests, we deluded ourselves into thinking they were a unified whole. It actually created some ineffectual and inefficient advertising models.
Not all niches created equal. Football readers deliver half of the audience. Most of the advertising wasn’t on those football pages. Many readers online bypassed the home page and went straight to football pages.
Now, the internet has revealed the niches in the mass. Financial model is there. Can’t talk about journalistic approaches to serving audiences without talking about how the businesses are organised and how they relate to their audiences, and I include advertises as an audiences.
Are you going to hope that by sitting back and writing about what they do in those niches? No. You have to produce other content that is relevant to their lives. In business terms, it’s always been about the relationship you have with your audiences. You turn acquaintances to transactions. Once you have attracted them, you need to think of other ways to interact with them. Events, get them to sell things to each other, get them to interact with each and sell services to them.
To people who say that I’m just a journalist and I don’t do events, he said: “Tough. That’s the way it is now.” By putting the noisy people called advertising in one room and the studious in another room was a big mistake. Just giving the audience journalism alone is not enough in the long term.
They now have 40,000 registered users across their regions. They hit their target of registered users in Birmingham in four and a half months. They have a daily email in the morning that drives 80% of their traffic.
We ignore the CPM race and refuse to become SEO tarts
At the centre of their business is the intelligence that they have about their users. He tries to personally review every new sign-up. He calls up some and thanks them for registering.
As a small business, we avoid waste. I reject things that don’t deliver audience, revenue or attention.
He says that this might be a way to support journalism in the future.
Q: Do newspapers not get the ‘net?
A: Yes, I’m afraid so. That is not because there aren’t brilliant individuals and editors who do get it. Structurally, I don’t think they can turn themselves around to make money on the internet.
I asked him to follow up with that. It is said you loose a pound in print for a penny online. That’s often true, but he said that the high fixed costs of newspapers – print plant, pensions, staff costs – make it almost impossible to ‘turn that super-tanker around’ and sustain their business with a digital revenue.
He uses Google Analytics to monitor his traffic and track the performance of their morning email.
Q: What is there that helps you re-engineer the cost base?
A: I’m not dragging behind a 100 ton press behind me or having to manufacture the most perishable product daily. Taking that cost out of the business makes all the difference. When we launched in February, it was me and my deputy in a serviced office with two laptops. In terms of when we scale up, we’ll keep on that trajectory.
One thing that stands out is their focus on keeping costs low and developing multiple revenue streams. They hold physical events. They do mail shots for promotion.
This is a live blog. I work to be as accurate and comprehensive as possible, but you might see some grammatical errors and the odd typo.
Ilicco Elia has been working at Reuters for 20 years. He got into mobile when redesigning the mobile site 8 years ago or so when people had PDAs and synced them to read the news. The news was as fresh as their last sync.
Two or three years ago, they started the mojo or mobile journalism project. Christian Payne aka Documentally said you never should have called it mobile journalism. Journalists should all be mobile. Reuters gave them a Nokia N95 and told them to take video, pics and write story. Immediate reaction from journalists: “Are you going to pay me three times as much?” No.
However, every journalist they gave the kit to came back and raved about how it allowed them to tell the story in the way that they wanted, whether that was with audio, video, pictures or text. He quoted one of their award winning journalists talking about using the N95 covering conflict in Chad. The journalist said that it didn’t replace a camera with a £3,000 body, but that it added to the coverage.
Michael Targett, online and digital development editor at Flightglobal. Industry events are key to their coverage. They sent a reporter Jon Ostrower to cover the maiden flight of the Boeing 787. He took an iPhone, a ‘decent’ camera and a laptop. He wrote 14 long blog posts. He posted 142 tweets, 282 images and four videos. He did 25 ‘live shows’. It shows what can be done with the right attitude and the right kit.
A reader lauded Ostrower and Flightglobal’s coverage saying it made him feel as if he was there.
They also cover air shows. A quarter of their annual display advertising budget came from the landing page of the Paris Air Show last year. They have added features to their show coverage. For the Dubai air show, one of their readers said that FlightGlobal’s.
yelp are getting 27% of searches from iphone app #newsrw every 5 seconds call made from the app!
The last speaker, Sam Jones, is director of strategy of Kyte. Mobile is the fastest growing segment of video consumption. It increased by 55% in 2009. (I wonder how low of a starting point that was.) Trinity Mirror, Fox News and the Huffington Post are all working with Kyte. Kyte has a moble video producer app. They showed footage from the iPhone taken by a Fox News reporter. Mobile networks remained up even as they struggled with other connectivity.
I think that one key point was that this really reduced the cost of video production. Kyte is also allowing reporters to take a bit of video and easily post to a publisher’s website, Facebook and mobile web, iPhone and iPad almost instantaneously. People can also interact around the video with a similar app across platforms.
Mobile data costs
The first question from the audience was about data costs. Elia said that he’s a heavy corporate and personal mobile data user, he usually uses 500 to 600MB. He asked his provider, Vodafone, how much it would cost him to upload 100MB of data on their network. They couldn’t answer. That was the biggest issue Elia said, the lack of pricing predictability. Targett said that during a recent coverage trip in Europe, Ostrower, in the course of doing his job, ran up a £700 data bill. Fascinating issue.
When I was travelling in the US in 2008 for work, I hired local data gear, both for better coverage and for lower cost.
In terms of fragmentation, Elia was talking about the huge number of platforms that he has to support currently for mobile: iPhone, Android, Blackberry and a myriad of Nokia platforms. He hope that HTML5 would end this issue. Sam Jones talked about how divisive HTML5 was in the industry and the fear of a VHS versus Betamax style format war. He also added that the growth in apps was bigger in terms of growth than anything Apple had seen on the iTunes store.
Apps and workflow
Targett of Flightglobal made a really great point that apps were providing a better workflow for journalists in the field. People didn’t need to offload images from a digital SLR to a laptop to upload them. They could upload the images directly from the phone.
Mobile has changed his newsroom. “Talented and able reporters are becoming more autonomous,” he said. They do have a support team in the office who edit some of the video, but mobile tools have allowed journalists to be out in the field more. It’s a great point, and one that I make often. Technology can be liberating. Most journalists who use it want to spend more time out in the field and closer to the story.
I have my own thoughts, but if the technology allows for more mobility, why do journalists spend more time in the office? (That’s assuming that you think they are in the office more.) Discuss.
With just two weeks of cash left, Frédéric Filloux described the crisis at Le Monde as “the textbook example of the evolution of French press over the last years”. He then went point-by-point the problems afflicting Le Monde in particular but the French press in general:
A steady erosion in readership.
A lack of budget discipline, made worse by loose governance.
The core newsroom’s reluctance to support the digital strategy
The collective certainty the “brand” was too beautiful to fail and that a deep-pocketed philanthropist will inevitably show up at the right time to save the company.
An difficulty to invest into the future, to test new ideas, to built prototypes, to coopt key talent or to invest in decisive technologies.
A bottomless investment in the heavy-industry part of the supply chain, in costly printing facilities.
An excessive reliance on public subsidies which account for about 10% of the industry’s entire revenue. Compared to Sweden, French newspapers have 3 times less readers, but each one gets 5 times more subsidies.
In terms of a lack of budget discipline, I would only point to the industry in the US giving bonuses to execs while the companies were entering or operating under bankruptcy. As Robert Picard pointed out a year ago:
The Tribune Co. is trying to pay out $13 million in bonuses, the Journal Registers Co. is trying to pay $2 million, and Philadelphia Newspapers has already given hundreds of thousands in bonuses to its corporate officers.
As for lack of support in the core newsroom for digital strategies, I’d suggest that the current problem exist in a layer of powerful editors who believe they have the most to lose in any change. Rather than fully understand, much less support, the digital strategy of their organisations, they see it in their own best interest to protect the status quo and obstruct change, even as it leads to job losses and uncertainty over their own future. It is self-interest and short-sightedness to the extreme, but for them, it seems a rational decision.
Ah, the belief in the beauty of the brand, it is so endemic in media organisations that they can’t understand why their circulation is in decline. Surely in this age of a multitude of media choices, our brand, our quality will prevail, they say. Look at your books and your circulation, how’s that working for ya? Only a fool clings to a failing strategy, and the industry has more than enough fools to fill a ship.
Difficulty investing in the future, to experiment with new ideas, expensive investments in the past. Yes, yes, yes. It’s a textbook for more than France. About the only one that stands out as not generally applicable is the subsidy, and for those in the US and the UK looking for their own government bailout, it is instructive that while subsidies might help for a while, they are not a long term solution.
The industry has resisted fundamental change for so long. They believed that they could outrun the future with their brand, their quality and their market position, but they can’t. It is adapt or die, and if you wait long enough, you’ll be in the same position as Le Monde, with only two weeks of cash left and suddenly a room empty of suitors.
I honestly don’t believe most in the newspaper industry have the ability to make the changes necessary. They certainly haven’t demonstrated that in the past. In terms of the business of newspapers, they have proven that they can milk the business model for a little bit longer through cuts and consolidation. Bankruptcy will given them another go around, but it won’t fundamentally change the business environment that caused the collapse in the first place. The process will enrich a few but leave many journalists looking for something else to do.
As for me, I love journalism too much. I wasn’t going to wait around and watch anymore of this slow motion disaster. There are other ways to create a future in journalism and a future for journalism, and I’m loving have a chance to explore them.
If you walk into a newspaper newsroom, you will hear something said over and over: “You can’t make money online”. It’s closely followed by grumbles of how much the company spends on digital. These are held up as some incontrovertible truth, like carrots help you see better.
Just as ‘carrots help you see better’ was propaganda spread by the British Air Ministry to conceal the military secret of radar, the ‘truth’ that there is no money to be made online is nonsense. It’s unquestioned propaganda in newspaper newsrooms where there is an unnecessary, senseless and ultimately self-destructive battle to keep the newspaper focused on paper, a battle driven by advocates of the primacy of print.
I’m not calling for the presses to be shut off. Rather, I’m calling for innovation in both print and digital. This battle to preserve the past is preventing companies from creating print and digital products that serve 21st Century audiences. Companies that are clear-headed and audience-driven are developing multi-platform strategies that are reversing decades long decline in profits and print circulation while increasing the share of revenue from digital. Those newspapers who remain focused on print are missing that opportunity.
It’s true that print makes the bulk of newspaper revenue, usually around 80%. But in focussing on outdated print strategies newspapers are creating a self-fulfilling prophecy: By not investing in digital, they ensure that digital revenues remain small in comparison to print.
In the US, Outsell found that in the news segment, largely made up of newspapers, only 11% of their revenues were from digital. In comparison, B2B publishers made 36% of their revenues from digital. Outsell analyst Ken Doctor said, “Simply put, the news industry has so far failed to make the digital transition.”
Although 11% of revenue doesn’t seem a good return, they have to be viewed in context. Print revenues are declining as a decades-long circulation drops no longer make print advertising as attractive. Digital revenues have been increasing, sometimes even through the recession, but it is usually from a very low base.
Commercial departments will also often tell you that it’s just not possible to make money online. In many instances, news organisations have built up huge audiences online but have failed to translate that audience into revenue. They will even refuse to investigate the opportunities afforded by digital on the basis that it would require them to do something different.
Commercial departments who say it’s not possible to make money online need to shoulder their responsibility for their failure to help newspapers make the transition to digital. If the current commercial strategy isn’t working – and old print ad sales strategies are not working very well online – why not try a new one? As the adage goes, if you do what you’ve always done, you’ll get what you’ve always got.
There is hope, though. Folio has two great profiles of two publishers re-inventing themselves: The Christian Science Monitor and The Atlantic. Both profiles dive deep into details of the two different publications.
After rising losses, The Christian Science Monitor shifted from a daily newspaper to a web-first strategy with a weekly news magazine. One thing that stands out in the profile of the Monitor is how much audience research they have conducted and continue to conduct with more than 3,500 readers. They found out why people had stopped taking the newspaper: Cost, lack of time and a shift to getting headlines online. I really liked the way that publisher Jonathan Wells summed up how they re-thought their value proposition:
We had to think long and hard about it. Our approach is a composite of the learning economy—we’re serving people without a lot of time, who are trying to understand complex issues quickly, and contribute to a solution. As one guy here says, our mission is ‘Help me get smarter, faster.’
One thing that jumped out at me was how willing they were to be nimble and to rethink not only how they worked digitally but also their print strategy. As they said, they were able to convert 93% of their print readers from the daily to weekly, and they’ve increased subscriptions by 63% since the shift. Increasing circulation going from 2009 to 2010 is something that most publishers would have killed for. They are not pursuing newsstand sales. They are focused on attracting the “right customers through controlled, targeted growth,” according to senior marketing director Susan Hackney.
They have also increased their page views by 49%, and they are looking to develop a line of digital products. This is all really smart, strategic and refreshing in an industry that seems to be mostly focused on squeezing the last bits of profit out of declining business models. That’s just a taster of an excellent article.
Folio also did an excellent profile of The Atlantic, which is managing to reverse a revenue decline that began in the 1960s. I often say that news organisations need to disrupt their business before someone else does. Atlantic Media president Justin Smith did just that, pushing for a digital-first strategy. From the Folio article:
(Smith) stressed that print is not dead, but taking this approach allowed the company to unlock its grip on traditional revenue sources. Importantly, the Web site’s overhaul was set up as an insurgency on the print brand. “If our mission was to kill the magazine, what would we do?” said Smith, who added that a digital competitor was going to do that anyway, so they did it themselves.
They are projecting that digital will account for 39% of their revenue in 2010. They not only shifted to digital first, but they also took a novel marketing approach, setting up their own marketing services division in an effort to differentiate themselves from ad networks. I’ll leave you to read the rest of the article, and I’ll give you one last reason to read the rest. After decades of decline, they looking at a profitable fourth quarter of 2010 and a multi-million profit in 2011.
To reposition themselves, these publications are looking for innovation from both print and digital but with a digital first strategy. The Monitor is using audience research to deliver products more relevant to their audiences, and they are thinking clearly about where they need to go and how nimble they need to be to achieve success.
We can rebuild businesses to support quality journalism, and here are two examples that show a few options for the way forward.
I’m at the Value of Journalism conference at LSE right now. I didn’t live blog the panels, but there were a few things that stood out for me and spurred some thoughts. There were discussions about paywalls, which I think largely reinforced my view that a very polarised, noisy media fracas obscured a much more nuanced reality in the paid content strategies of news organisations.
I did want to flag up the comments of Joanna Geary, a friend of mine, who spoke about her journey into journalism. UPDATE: Like many people, she stumbled into it. She told me afterwards that the move “was planned but knew it wasn’t perfect for what I wanted”. She says that on entering journalism she wasn’t a newspaper reader, and she definitely wasn’t someone who had specific loyalty to one newspaper. She is an information seeker. Now, she says that she regularly visits about five sites a day.
They are full of people I find interesting. They stimulate my thinking. Those are the sites that I visit the most.
This is very much the way that I consume information. I’m interested in subjects and topics, and as a networked journalist (the topic of this conference), I use personal networks and other tools to get as much information and gather as many sources about a subject that I can. As a journalist, I then try to sift, filter, highlight and verify. I also try to draw connections between these sources and bits of information. It’s very similar to traditional newsgathering, but the tools are different.
At conferences, I’m often asked about my news consumption patterns, and my standard response is: “My reading habits are voracious and promiscuous.” I find the idea quaint that I would choose a single news source for my information. Every source has it’s point of view, some more prominent than others. I feel the need to read several sources of information to get a complete view of a subject or topic.
I used to think that I was in the minority doing this, especially seeing as as a journalist, it’s part of my job to sift through a lot of information. However, this might represent a broader shift in news consumption. Gina Chen at the Nieman Lab at Harvard looked at a recent Pew Research Centre study in the US. (Caveat being that US studies aren’t necessarily applicable to all markets.) She interpreted the findings as:
But the important point is that the loyalty isn’t to the platform, the application, the delivery system, or the brand. The loyalty is to the need for the information.
That succinctly describes my relationship to news and information. I’m still not ready to generalise my news consumption patterns, but I do think that there are elements of my news consumption patterns that I share with digital audiences. I think that people are filtering information, consciously and unconsciously. Editorial choice and voice used to be the only filter for news, but I think that is changing. People have other tools that are proving to be better vehicles for relevance than the traditional news outlet and its manner of bundling information.
Teasing out Trust
Back to the conference which has the overarching theme of the Value of Journalism. It’s important to draw a distinction between societal value and economic sustainability. Speaking of teasing out issues, Joanna also drew a distinction between legality, accuracy and trust:
If it was illegal to be untrustworthy and wrong, a lot of journalists would be in jail.
Joanna also talked about her motivation for getting into journalism. I’m writing this part of the post a little after the panel, and I don’t want to put words into Jo’s mouth. However, it is safe to say that her motivations going in were different than the motivations that she found other journalists had. Jo said that she found that many journalists just wanted to write, to have influence and be recognised. Jo’s motivations were more based on a desire to inform. (I’ll check with Jo just to make sure that I’m not misquoting her. She did say to me after the panel that she is finding more people in journalism like her.)
Jo’s comments resonated with me. As I’ve said before, in my rather brief career thus far I’ve had the honour of working for international journalism organisations including the BBC and The Guardian. However, I got my start at a small newspaper in western Kansas, The Hays Daily News. When you’re writing for a newspaper that sells 14,000 copies to people spread across a few thousand square miles, one is aware of the limits of one’s influence.
Of course, we all want to be read or viewed. However, in terms of influence, it’s not really something that I’ve sought nor is it what gets me up in the morning. My goal is to provide people with information so that they can make decisions in a democratic society. I know that trust and credibility is the bedrock of what I do.
Engagement has been key to building trust in the journalism I do, and Jo spoke very eloquently about that during the panel. It is one of the reasons why I have been such an advocate of social media journalism. It is a chance to directly engage with our audiences and to build (or in some cases rebuild) our relationship with people.