In the daily flood of links that stream by me via RSS or Twitter, I noticed a post by Mark Schaver, the computer-assisted reporting director of the Louisville Kentucky Courier-Journal, in which he challenged the view of newspaper executives as short-sighted and out-of-touch. He pointed to a couple of projects in the US, Videotex and Knight-Ridder’s early investment in Netscape (then Mosaic). Mark said that calling news execs short-sighted and lacking in vision is overly simplistic.

What I am saying is that powerful economic forces, forces that are vastly more complicated than the simplistic drivel about newspaper curmudgeons and their resistance to change, are behind the news industry’s malaise today.

I agree with him. It is overly simplistic.

However, Videotex is a fine example of a disastrous technical project driven by the newspaper industry. The system was too slow, cost too much and didn’t provide anything that couldn’t be found easier in some other form. As often happens in the US, the FCC failed (or refused) to set a standard, hoping that the market would sort it out, and NTSC – the North American television standard – on which some of these projects were run provided too low of resolution to read text on televisions unlike the Ceefax system on the higher resolution PAL video standard in the UK. Maybe it was ahead of its time, and it’s definitely before my time. But I’ve never heard anyone in the industry hold up Videotex as an example of how to do a technical project.

Knight-Ridder was forward looking. They grasped a lot of the innovations early, partially because of their presence in San Jose. They even moved their headquarters from Miami to San Jose to plug into the new media revolution. In 1990, Robert Ingle, executive editor of the San Jose Mercury News wrote a memo that sounds eerily similar to the strategy that most newspapers are following now:

Give information to readers however they wanted it, integrate the print and online operations, and dream up new forms of advertising.

Knight-Ridder were part of the New Century Network, which was supposed to position the newspaper industry for the 21st Century. But there is a but. As BussinessWeek reported of the Network on its closure in 1998:

In a ballroom at the Newspaper Association of America convention in Chicago, a thousand bottles of champagne emblazoned with ”New Century Network: The Collective Intelligence of America’s Newspapers” awaited the hordes expected to come to toast the watershed new-media joint venture. When fewer than 100 people showed up, Chief Executive Lee de Boer made an abbreviated speech before retreating. ”They built a business and nobody came,” says David Morgan, president of the online ad agency Real Media Inc.

The reception was the first public humiliation for New Century Network, but only one in a series of blunders that culminated in the company’s abrupt shutdown on Mar. 10 (1998). Created in 1995 to unite newspapers against Microsoft Corp. and other competitors girding to woo electronically advertisers and readers, New Century Network came to embody everything that could go wrong when old-line newspapers converge with new media.

Knight-Ridder should have been leaders in how to do it right. As Matt Marshall wrote in 2006 as Knight-Ridder was on the eve of ceasing to exist:

The real irony of this situation is that for 15 years KRI was, by far, the most innovative newspaper company in the country, including its early experiments in teletext and having the first online newspaper (the Mercury News on AOL in the mid 90s).

But as Matt says in the title of his post, sometimes innovation is not enough. Newspapers continued to be newspapers, just online, as he and most of us have said over the last decade. It is proving for some newspapers a fatal mistake, although one that many of us saw years ago. And I’d agree with Matt that it’s easier to imagine a new entrant making the changes necessary to survive in this new world rather than an established newspaper.

As my friend and former colleague Alf Hermida points out from Readership Institute data, people do not have the same connection with their local newspaper websites that they do (or possibly did) with their local newspapers.

Obviously, something isn’t quite working when it comes to newspapers, ‘new’ media’ and innovation. As Mark Schaver is correct to point out, this is probably not for lack of trying at some newspapers. I know that a lot of journalists are exhausted and frustrated by reorganisations, restructurings and new strategies. I ask the following question not pretending that I have all of the answers but because I’d really like to hear people’s experience: What has prevented newspapers from being successful in the digital age?

Two years ago, Steve Yelvington wrote a post after hearing someone refer to “NCN nostalgia”, NCN being New Century Network. He said a few things that might speak to my question:

• “But there was something else at work: technology was evolving faster than anyone’s business vision.”
• “The notion that a we-tell-you news cartel would be relevant in a conversational universe may already be obsolete.”

The newspaper industry hasn’t adapted to the pace of news online or the pace of technological change. More than that, I think Steve is right that business vision hasn’t kept pace with technology. In the wake of the newspapers ‘are worth fighting for‘ discussion kicked off by Jessica DaSilva, Pulitzer winner John McQuaid said:

Meanwhile, the default attitude of newspaper management is still caution and probity. And if you point a gun to the head of caution and probity and say “innovate or die,” don’t expect wonderful things to happen. Instead, expect buzzwords.

Newspapers have only recently woken up that the real competitive threat isn’t from other newspapers or print media, not even from TV but from new digital businesses that might not have even existed a few years ago. Even though Robert Ingle and others saw the competitive threat 18 years ago, there has not been a sense of urgency until the last 18 to 24 months.

However, unlike John McQuaid, I would argue the over-cautious nature of journalism change is not just about boardroom conservatism. Print newsrooms are some of the most conservative places you’ll find. Journalists are paid sceptics (some might say cynics), and they approach their own business with that mix of scepticism and cynicism.

Some things have changed since Robert Ingle wrote his prescient memo on his Apple ][ in 1990. In the 1990s, tech was expensive, and I heard a lot of journalists argue that the internet was a money sink not a money maker. There was some truth to that, but very few disruptive technologies have a clear business model at the beginning. Did Google have a magical money-spinning idea with search? No, not until AdSense. But now, smart technology buys and clever use of open-source technologies can bring the cost of failure down to almost the petty cash level. Just look under the hood of Google’s massive data centres and you’ll find lots of commodity hardware lashed together with a lot of open-source technologies.

The newspaper industry also still seems to be thinking in industrial terms. Too many of the strategies I see are huge, heavy, expensive strategies instead of light-weight, nimble and low cost digital strategies. By the time the strategies are in place, the state of the art and, more importantly, audiences have already moved on. More importantly, you can attack the business model problem from two fronts. You can find new ways to make money, but you can also find new ways to make high-quality, compelling content with less money and not just with less staff.

Things are changing. A few newspaper companies are making the investments in flexible, scalable technology to prepare them for the future. They are getting serious about developing new income streams. They are freeing their content and taking it to where the audience is instead of forcing the audience to come to destination sites. But for some newspapers, it’s too late.

What would you do and what are you doing to ramp up the pace of change at your company?

Technorati Tags: change, newspapers, strategy