05.27.12
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Digital journalists: We need to build a digital ‘lifeboat’ for the burning platform

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:

To which I responded:

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:

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:

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