The Future of Newspapers

Steve Moore invited me to answer the question: What comes next? In my case, I was supposed to talk about the future of newspapers. Jeremy Ettinghausen, Head of Digital Publishing at Penguin, talked about the future of the book. And Matt Locke, of Channel 4, talked about the future of television.

Matt and Jeremy were brilliant. Jeremy is asking fundamental questions about what it means to be a publisher in the 21st Century, and Matt makes one of the best cases in the business to free your content to follow the audience. The day of building a website and expecting everyone to come to you is over.

It was a great morning, if for no other reason, I came up with a short way to explain what I really do. People always ask me how I edit the blogs at the Guardian, sometimes adding that wasn’t the point of blogs not to have an editor. That’s a fair question, and most of the Guardian blogs have desk or section editors who commission most of the content. What is it that I do then?

I use the tools that are disrupting our (the newpaper) business model to do journalism.

It’s really that simple, and that’s what I mean by leading by doing. How can we use these disruptive technologies to do improve journalism and expand our audience? If gains in technology have brought about faster, better and cheaper technology, why not use technology to beat the competition by being faster, use cheaper technology to undercut existing economics in our business and use technology to get stories and tell them in ways that weren’t possible before. These are my goals, and hopefully with a band of merry journalistic pirates we can spread the future more evenly where we work.

It is now clear to almost everyone that the business model that has supported newspapers is under threat and that newspapers must change. Newspapers in the US are facing a perfect storm of declining readership, declining ad sales and a sudden drop, some might say collapse, in real estate advertising tied to the sub-prime crisis. But it’s not just the US, lest people believe the cuts are down to the declining newspaper culture there. Le Monde is on strike over job cuts that could cut the newsroom by a quarter. Newsquest Glasgow is cutting 20 editorial positions due to “poor trading conditions“.

The State of the News Media 2008 report from the US put the situation in stark terms:

But more and more it appears the biggest problem facing traditional media has less to do with where people get information than how to pay for it — the emerging reality that advertising isn’t migrating online with the consumer. The crisis in journalism, in other words, may not strictly be loss of audience. It may, more fundamentally, be the decoupling of news and advertising

And the writers of the report asked how news organisations could develop a new business model while having to make painful cutbacks. The need for change is urgent, and while the last two years have seen major strides by some news organisations, the companies and, let’s be honest, many journalists were slow to adapt to the challenges of a now more than decade-long digital revolution.

What business model are we competing against? The TechCrunches of the world. As of last autumn, they had a full-time staff of eight. They have revenue’s of $240,000 a month, and in February, they had 2.6m ‘absolute unique visitors’, according to Google analytics.

News organisations need to take advantage of the very trends that are disrupting our business model. When I worked for the BBC, they bought a digital video editing system in that had a huge external cabinet, a Mac tower and Avid software. It was about eight years ago, and it cost $80,000, which was reasonable and cheaper than professional systems that came before. Shortly after I left the bureau in 2005, they replaced the system with a Mac laptop, a portable RAID array and Final Cut Pro for about $12,000. It was faster, had more storage and was portable.

1) News, not newspaper, companies

Preparing for the talk gave me an excuse to begin reading Newspaper Next 2.0 report, the second installment in the American Press Institute’s project to help newspapers get out ahead of the changes in the industry. Much of the work is based on Clayton Christensen‘s work and his books The Innovator’s Dilemma and the Innovator’s Solution. The authors conclude:

This raises a big question: Are we newspaper companies? If so – if we define our companies and our mission by our core product – these coming digital solutions look threatening, even catastrophic. A newspaper company will instinctively fight to preserve and defend its product and business model. At most, it will cram a few new offerings in around the edges of the old model, as long as they don’t threaten the core.

This is the typical defensive reaction of legacy organizations and industries in the face of disruptive innovation, described vividly by Clayton Christensen in his best-selling books The Innovator’s Dilemma1 and The Innovator’s Solution2. As his research in more than 60 industries showed, it’s also a formula for failure.

To avoid that outcome, this industry needs a major mindshift: It must stop defining itself by its technology. We are not newspaper companies. Rather, we have always been companies whose mission and business model was meeting the human needs for information, knowledge, solutions, social connection, choice-making, buying and selling that arise in a given locale.

This is obviously a business plan for local or regional newspapers and not national, or increasingly, international newspapers and sites. However, there are lessons here for newspapers regardless of the market.

2) Aggressively undercut your own business model before someone else does

Don’t do video on the web that pretends to be television and costs just as much to produce. Use Skype to do live podcast two-ways, or have journalists record their audio on their laptops and use Gmail to send the files. The Boulder Camera recently shut down its bespoke community software and shifted to Ning. (Amy Gahran quotes Matt Flood of Camera, who said, “the developer that built it is no longer with the company so we couldn’t fix anything or create anything new”. Familiar story? Can I hear an amen from how many people have been stuck in this situation?)

The difference between the late 1990s and now is that cost of editorial experimentation has dropped almost to zero in some cases. Creative use of freely available web tools can achieve most editorial goals, and it can be used as a guide for future development. Out of all of the things you could do, it will help you understand what you must do.

3) Good enough undercuts incumbents

I keep coming back to something that Steve Yelvington said at a citizen media workshop we were at last summer:

We need to think of making things that are good enough and not overshooting. We’re taking too long to create ‘perfect ‘ systems that don’t meet needs. We over-invest, over-plan and then we stick with the bad business plan until it all collapses. Come up with a good idea and field test. Fail forward and fail cheaply. Failure is not a bad thing if we learn from our mistakes and correct. Be patient to scale. Impatient for profits.

As journalists, we can meet this challenge. We can compete. We always have. We have competed against other journalists for exclusive stories. If new technologies are disrupting our business, we just need to use them to do some disrupting of our own.