Category Archives: Business

05.02.12
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News start-ups can’t survive on ads alone

Reuters Institute fellow Rasmus Kleis Nielsen has a great post on the blogs at Reuters warning European journalism start-ups to avoid surviving on advertising alone. He backs up his warning with some stark examples of start-ups who have failed due to meagre revenue they were able to earn on ads:

Advertising-supported online news production did not work for Netzeitung in Germany (which in 2009 shut down its newsroom after nine years of consecutive losses), did not work for Rue89 in France (impressive and innovative as it was, the site never broke even and was bought by the weekly newsmagazine Le Nouvel Observateur in 2011), and is not working for Il Post (widely considered one of the most promising startups in Italy, the site generated revenues of just 35,000 euros in its first year of operation, resulting in an operating loss of more than 150,000 euros out of a total budget of little more than 200,000 euros). Why should we expect it to work for other startups when all these widely praised ventures, and many more besides, failed to pull it off?

Ouch. Nielsen makes the broader point that the journalism start-ups are simply mimicking US models, when the US market is massive both in terms of population and ad spend compared to European markets, but he also makes some excellent points about how a glut of digital content has pushed down ad rates and kept them low. Those low rates aren’t just hitting start-ups but even established players. 

A lot of journalists are trying their hand at start-ups as they leave or are pushed out of the stable of big media. When I left The Guardian two years ago, Suw and I thought about pursuing a journalism start-up. We decided not to do it for several reasons, with the major one being, our start-up dreams were over-taken by media consultancy work. However, we thought long and hard about the revenue streams that would fund our start-up. We knew that ads alone wouldn’t cut it. 

Nielsen suggest that journalism start-ups look to how other non-content start-ups are diversifying their money mix by adding “digital subscriptions, donations, consultancy services, live events, event planning and e-commerce”. Honestly, I think for certain types of content, you could even mix consulting and content, although I know from personal experience that gets sticky. Journalism quickly meets the requirements of client confidentiality.

Regardless, if you’re launching a journalism start-up, make sure your content dreams are leavened with some thoughts of business reality. If you don’t have business planning experience, get some. Freelancers have always had to learn about marketing and the business side of journalism. It might feel a little weird at first. Just remember, you’re not working for the Man. You’re fighting for your own survival. 

02.03.12
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NewsRewired: Tom Standage of Economist ‘Digital is not a zero-sum game’

I’m at NewsRewired again doing a bit of live(-ish) blogging about some of the talks that I find interesting.

Everyone wants to be The Economist because it has managed to increase both its print and digital subs over the last few years, and unlike most publishers, it has see its readership and revenue grow through the recession. Speaking at Journalism.co.uk’s NewsRewired conference*, he gave some insights into its success.

In the current environment, for any publication that acts like a filter the noisier the media environment gets the better you do.

Standage also sees The Economist brand this way that if someone was stranded on a desert island and had to choose one publication so that they believe they are informed that they would choose The Economist. That’s a great statement of how The Economist sees itself.

Their attitude to digital is that it is not a zero-sum game. About a third of their print readers are also using their digital apps. From their own market research, they realised that they needed to cater to their readers who wanted a digital experience for two reasons.

  1. Readers see digital as more convenient. The biggest reason that readers give when they cancel their print subscription to The Economist is that they don’t have enough time to read it.
  2. In their own market research, currently, readers prefer print to digital by a ratio of 80% to 20%, but asking them what they will prefer in two years.

Standage says:

We sell this content bundle, this feeling of being informed when you get to the end of it. That is what we sell. That is essentially the proposition. You can still sell this in a mobile environment.

Some observations: How many other publications have the clarity about what they provide? How many other publications have the clarity of the value proposition they offer?

Standage also gives us this nugget of golden insight. In the past, The Economist’s archive was hidden behind a paywall. The result:

Before 98% of our content was invisible to Google.

They have shifted to metered paywall similar to the Financial Times and the replicated by the New York Times. Any reader on the web gets 5 stories a week free to read. The Economist’s traffic actually went up. Some pay for a digital only subscription, but print subscribers get access to the digital content.

The metered paywall plus all access to print subs is a great model. You get users used to paying for digital.

He added this caveat. “This will not work for everyone. You need to know who your readers are.” He said that such a model would be difficult for The Guardian that sells most of their print copies through newsstands, and he said that The Guardian  doesn’t know about its readers. The Telegraph is starting to build a database of reader information, but he sees The Guardian as behind in this effort. (Any Guardian folk want to take issue with that?)

He closed by saying that there is not one new model but many new models. However, we’re beginning to find some ideas that work. They might require a change to your publishing business – especially in getting to know your readers much more – but we have some elements of a working model.

UPDATE: Adam Tinworth has live blogged this session and adds other details, especially with respect to the media app economy.

* Disclosure: I conduct data journalism courses for journalism.co.uk

01.24.12
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Is a lack of trust really what ails newspapers? Not the British tabloids

I’m going to mix apples and oranges here a bit, mixing the US newspaper industry and the British industry. If you think that isn’t fair, then you can click away now.

Some have argued that the decline of newspapers has been down to a loss of trust. A couple of examples of that point of view. James O’Shea, a former editor of the Los Angeles Times said in 2008:

“(the) main problem journalism now faces is the lack of public trust in journalists.”

O’Shea feels that for newspapers to thrive and prosper they “have to figure out how to deliver journalism that makes the public believe we once again are a public trust, something of value and something they won’t hesitate to pay for.

When The Economist asked Jay Rosen last August what the biggest problem was with the news media in the US, he said:

Another example is the decline of trust. In the mid-1970s over 70% of Americans told Gallup they had a great deal or fair amount of confidence in the press. Today: 47%. Clearly, something isn’t working. But revisions to the code of conduct that has led to this decline would be seen by most journalists as increasing the risk of mistrust. I’ve tried to argue that the View from Nowhere—also called objectivity—should be replaced by “here’s where we’re coming from.”

The other problem he identified was that the bulk of revenues still came from print “but cannot provide a future”.

For those who argue that the decline of the newspaper industry is down to a loss of trust, I’ve never been convinced that this is the fundamental issue. It might be coincidental, but I’m not entirely convinced that it is causal. To me, the decline of newspapers is down to competition from other media for attention, disruption of display and classified advertising and changing media consumption habits. Did they move to other platforms for news because they had more trust or were those other platforms simply more convenient? Do people in the US trust TV news anymore than they trust print?

Roy Greenslade at The Guardian makes the point forcefully today that trust and reading a tabloid in the UK have little to do with each other. “Trust and the red-tops? It’s irrelevant to the millions who read them“, pretty much sums up his point. At the risk of quoting a bit too much from Roy, in terms of the trust=readership argument, at least in terms of print circulation in the UK, that doesn’t really match reality.

Yet, as the print sales figures show, those red-tops – The Sun, Daily Mirror and Daily Star – together sold 4.2m copies even in the dismal sales month of December (with a probable readership of 12m plus readers).
To put that in perspective, sales of the other seven national titles – the middle market pair and five quality titles – collectively totalled roughly the same as the three red-tops.
In other words, though we might think trust plays a crucial role in the decision about media consumption, it is not the defining factor for the regular red-top reader.

To put this in stark terms, Rupert Murdoch’s Sun had a circulation of 2.5m, -6.85% YoY, -3.56 MoM, compared to The Guardian which had a circ of 230,108, -13.11 YoY but fortunately up 1.61% MoM. The Sun has more than ten times the circulation of The Guardian.

I’m not saying that I like this reality. Frankly, I’d rather that trust guaranteed financial success for newspapers, but sadly, the world doesn’t seem to work quite that way. The tabs are easily digestible entertainment, and they show their readers the world they want rather than an accurate picture of reality. However, to argue that a decline in trust is the cause of declining readership and the decline in fortunes for newspapers, doesn’t quite square with reality.

I’m not saying that trust and credibility aren’t important. They are core to my professional identity. However, when it comes to answering the business problems of newspapers, it’s probably down to a collapse in traditional sources or revenue rather than simply collapse in trust.

01.16.12
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Ebooks vs apps: What next for news?

I was just writing a comment on Adam Tinworth’s blog post pointing out that there’s a huge ebook market out there that’s largely lying untapped by news organisations, but it started to get too big so here it is as a blog post.

There are a few challenges that news organisations need to overcome in order to really make the best of the ebook market. The first is around file formats. A friend of mine who does web comics looked at the Kindle, and the problem she came across was that anything with images becomes problematic, not just in terms of how the layout is affected by the ebook formatting, but also about upload file size limits. It makes doing a webcomic on Kindle impossible, and I would imagine that the same would be true of any news content with images. The standard news article format of image or video plus text doesn’t seem like it would work well on the Kindle.

That means that one would have to properly repackage content for ebooks: either big, timely articles, such as Ars Technica’s Apple OS X Lion review by John Siracusa, which netted Ars Technica $15,000 in 24 hours OR content with more legs, such as analysis, market intelligence, etc. I know some news orgs are experimenting with this, but some ebooks that I’ve seen of the latter type have been terrible – just a bunch of articles cut and paste into a file, barely formatted, and with no sense of cohesion or context.

In order to do ebooks well, you do need to have someone able to spend the time both on making sure that the content is right and typesetting it in a style suitable for ebooks, and getting it out onto the main ebook platforms, not just Amazon. I personally think there’s a market there, and news orgs really should have all the requisite skills in-house, but what seems to be missing is vision, budget, and time. The idea that you can simply slap a load of related articles into an ebook and Bob’s your uncle is erroneous in the extreme. You need to add value to your content, so provide analysis or information or context or something that your readers can’t simply get from your website. The added value in terms of the Ars Technica Lion review was timeliness and convenience, but single topic articles where that will be enough to prompt so many sales will be rare. I do think that news orgs should be looking at ways in which they can use ebooks to exploit their archives and start to gain revenue from reanalysis of existing content.

As for apps, I think they actually scratch a different itch. They are mainly about accessing today’s news in a more convenient manner. Were I to be pointing in a direction for news apps,  I’d say that news orgs should be looking at hybrid HTML5/native apps which require less in the way of original coding (think of platforms like PugPig), and which can stretch across operating systems with just a single source of content (the HTML5). The development and redevelopment of apps for this platform and that platform is time-consuming and uses up resources unnecessarily. As I said to .Net Magazine, this is the only real way that content producers can keep up with the demands of different platforms.

Of course, this isn’t actually an either/or scenario. News orgs should be looking at both ebooks and apps with a clinical, disinterested eye, working out what users want and how to provide that effectively, rather than simply shoehorning their existing content into these different-shaped buckets and hoping no one will notice that it doesn’t really fit.

01.09.12
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Newspaper innovation: Not too much but too little

If you’re a newspaper editor, and you want some much needed inspiration, you’ll want to add the blogs of Melanie Sill and John Robinson to RSS feeds or daily reading, and follow both John and Melanie on Twitter. John recently stepped down as the editor of the Greensboro News & Record in North Carolina, and Melanie recently made a similar move, leaving the top job at the Sacramento Bee in California. John wrote an excellent post about rebuilding a newspaper’s relationship with its community last week, and in her most recent post, Melanie looks at newspaper innovation. It comes after the ombudsman at the Washington Post, Patrick Pexton, agreed with some readers who thought the Post was innovating too quickly. (As someone who lived in Washington for seven years and considered the Post my local paper, it was always a schizophrenic place with a lot of digital innovation under Jim Brady while the print offices in Washington tried to change as little as possible.)

Melanie’s thoughts on the pace of innovation?

Most newspapers are stuck in the late 20th century formulas, scarcely varied across the country, for section concepts (even names) and types of coverage. These conventions, moreover, carry over into digital forms, and only in the past couple of years have we begun to see new forms made only for digital channels.Amid legitimate struggle in newsrooms to make this outdated formula work with vastly reduced staffs and greatly increased production demands, there’s not enough attention on creative breakthroughs — the kind of conceptual innovation needed today. What should a print edition do in a 24/7 news world? How is it differentiated from other platforms in content, format and organization?

Yes! Digital is different. It’s something digital folk have been saying since the 1990s. It’s not enough to shovel print content onto the web just because both print and the web are largely text-based. Just as reading a newspaper out on TV would seem silly (although there is some value in the newspaper reviews common on European television), simply copying text to the web was always an approach lacking imagination.

  • How is digital different?
  • What is possible in digital, on the web and via mobile, that isn’t possible in print?
  • How does this change audience expectations about news and information?
  • How do we meet those expectations?
  • How can use those differences to come up with new opportunities for revenue to support the work we do?

This is what I’ve been thinking about since I first became an ‘internet news editor’ in 1996. We’re at a pivotal time, and it’s great to see leadership from veterans like John and Melanie. I look forward to working with leaders like them in the future.

01.09.12
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Unique content part of metered paywall success

Last year, a university journalism classmate of mine and I were talking the various plights of journalism, and he told me some advice that a business-savvy relative had given him. Roughly, it was this:

To be successful, you have to know how to create value but also how to capture value.

Basically, this means, that yes, you have to create value. Many journalists are focused on this part of the equation, the valuable service that we provide and the social value that we create. However, to be a sustainable business, we also have to know how to capture value. From that service or social value that journalists create, how do we get a return on it so that we can continue to provide the service? This is really the pressing business issue for digital content businesses, including journalism. How do we capture the value of the service that we provide? Subscriptions? Advertising? Events? Consulting? Marketing services? Most likely all of the above and more.

It’s worth interrogating the first part of that and being pretty ruthless and honest with ourselves as journalists about what value we are creating. There is a lot of redundant content out there right now, and as I said over and over in 2011, content is abundant; attention is scarce. Metered paywalls such as those at the Financial Times and the New York Times seem to be working. Is it because of the metre or the content (or a bit of both)? Adam Tinworth has a view on that:

I was involved in a significant amount of work in my final year at RBI looking at exactly what kinds of content people will pay for, through what mechanism, and how to create more of it. Uniqueness was certainly one key factor – as was the amount of business value that investment returns to the reader, which is exactly why the FT does so well.

Adam was responding to Frédéric Filloux’s most recent Monday Note looking at how both the Financial Times and the New York Times are increasing the cost of their printed product, which makes their paid digital product seem less expensive by comparison for loyal readers. Filloux also keyed in on unique content:

Of these three factors, the uniqueness of content remains the most potent one. With the inflation of aggregators and of social reading habits, the natural replication of information has turned into an overwhelming flood. Then, the production of specific content — and its protection — becomes a key element in building value.

To me unique content and a strong, active social media strategy builds audience and engagement. Note that I said an active social media strategy. The only thing that has continued to propel my career forward has been a personal active social media strategy, engaging my peers and also my audiences. This isn’t just about promoting myself or my content via social media but also connecting with people and connecting those people with information that I think they will find useful, whether I reported and wrote it or not.

11.15.11
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Journalism innovation for small towns and rural areas

As I sit in Vilnius Lithuania, the next to last stop on my 2011 journalism world tour, I was taken back to where my journalism career started: Hays Kansas I started my career as the regional reporter at a small town, 14,000 circulation newspaper, the Hays Daily News. The standard joke told by the locals was: It’s not the middle of no where but you can see it from here. My job was to cover 1100 square miles on northwest Kansas. I covered my first presidential election from Hays as local hero done good, Bob Dole, ran against Bill Clinton in 1996. Dole’s hometown of Russell Kansas was also the birthplace of another Republican candidate that year, Pennsylvania senator Arlen Specter, who also ran the nomination that year. Apart from that, I covered what most cub reporters at local newspapers do: School board meetings, the weather (think storm chasing in Tornado Alley), the odd agriculture story and a beloved Sunday feature called the Nor’wester.

It was a great place to start journalism, working with a curmudgeonly good hearted editor, Mike Corn, and an award winning team of photographers, Steve Hausler and Charlie Riedel. Charlie now travels the world for the Associated Press. It’s still the second greatest job I’ve ever had, second only to working for the BBC in Washington. My job meant something. Western Kansas was a place fighting off decline in the 1990s. It was still reeling from the farm crisis, and as its youth left because they had to find work and their way elsewhere, many of its small towns fought off extinction. When I first moved there, Mike used to quiz me on where these small towns were. Every once in a while with a glimmer in his eye, he would say: “Ha, got ya! Trick question. It’s a ghost town!” For these small towns, I was all they had when it came to news, and they thanked me for it. It was deeply satisfying work.

Hays was also a great place to start because when I worked there, it was very innovative for a small newspaper. I started in December 1994, and we all had Macs on our desks and a cutting edge production system. For a newspaper of that size, I’m pretty sure that was rare then. The paper went online in 1996, and I applied to become their first internet editor. It was definitely ahead of its time.

Hays is why I’ve always been interested in local news, now mostly talked about as hyperlocal. What took me back to Hays? The Colombia Journalism Review has an interesting collection of views about Modesto California and journalism. It’s a world away from Hays and ten times as large, but for Hays and a lot of even smaller communities, the issues of providing journalism to these places is even more challenging than when I was there, especially in my adopted home of England, where the crisis in local journalism is even more acute. Although I cringe a bit when I read the CJR piece and detect a whiff of big city condescension (I’ll always be a country boy), their larger point is right:

If the digital-news revolution is to truly serve a mass audience, beyond educated and reasonably affluent urbanites, we must account for Modesto; we must find ways for innovation to flourish in poor towns where, for so long, it has been allowed to die.

I guess broadly, it’s not just the dying of journalism in not just poor towns, but also small communities, that worries me but the existential threat to rural areas full stop both in the US and the UK. That’s another issue, but if you’re interested in local journalism, it’s well worth a read. I especially love Rusty Coats’ piece. I met Rusty in 2005 at Web+10 at Poynter, and his story and mine share a lot of similarities. I love this line:

Fledgling news websites have cropped up across the country, led by journalists who bleed local, sometimes down to the neighborhood.

Local journalism survives on the dedication of these journalists, like Mike Corn. When I pulled up the Hays Daily News website tonight, there was Mike’s name. He’s still in Hays. He has threatened to leave several times since I left in 1996, but he’s still there. You have to have that kind of dedication because it sure as hell doesn’t pay that well. I made $2000 less than a first year teacher when I started in Hays. I made ends meet by having no student debt and living very frugally. I drove a very used car that had no working air conditioning, something you miss when it’s 45 C (114 F) on a hot, dusty summer day in Kansas.

Sceptical optimism

Local news and information has always been a tough business, and the ongoing economic crises aren’t making that any easier. It is good to see a renewed vigour when it comes to local. John Paton, dubbed newspapers’ digital apostle by the New York Times this week, is pulling the industry forward, and his digital first strategy has been a clarion call to his editors and journalists, many who work at small newspapers. Steve Yelvington has long been a leader in digitally-led local journalism, and as Morris, the group he works for, moves digital close to its core, I’m sure we’ll see great things. I’m sure we’ll see new efforts in how communities cover themselves. For those of you working with such projects, it’s well worth reading the New Voices: What works report.

I continue to be sceptically optimistic about local journalism, more because I choose to be optimistic about small communities. Although I haven’t done truly local journalism for a long time, I remember all too well how hard it is and the dedication required. I remain slightly sceptical because I think a lot of the hype surrounding hyperlocal has needed tempering for a very long time, and I see a lot of hyperlocal projects make the same mistakes over and over and over again. Local journalism needs more of a rethink than national or international when it comes to remaking the business model. Thanks to CJR for trying to move this conversation a bit more front and centre.

09.27.11
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Integrated newsrooms must remember print and digital are different products

I’ve seen integration happen as several newsrooms, and I was at The Guardian as it began integration.* Much of the integration since 2007 has been driven by economic concerns with little focus on products or even efficient newsroom workflow to serve those products. Alan Mutter, who writes the excellent blog Reflections of a Newsosaur, says that as Jill Abramson takes the reins at the New York Times she will have to choose between two irreconcilable paths.

She either will have to cannibalize the flagship print product to build the strongest possible digital franchise for the Times – OR – she will have to concentrate on sustaining the commercial strength of the print edition at the risk of channeling insufficient resources into assuring the strongest possible digital future for America’s newspaper of record. …

The problem for Abramson is that the print and digital media demand significantly differentiated products, which the Times has not been able to produce to date with even its enviable strength.

I think the New York Times has stepped up its game in this respect over the last two years. Andrew de Vigal has done an excellent job honing the multimedia work at the Times, bringing a coherence that has escaped many other newspapers. Aron Pilhofer, interactive news editor at the Times, has done some excellent work in terms of building great projects and doing great journalism with data.

However, I think that Alan hits the nail on the head. Integration makes sense, but it has to be seen in the context of serving different and differentiated journalism products across print and digital media. Torry Pedersen of Norway’s VG has one of the best ways of understanding this. At a conference in 2009, he put it this way:

He then compared newspapers and the web to a bottle of water and a waterfall.  The waterfall represented the web–continues flowing, raw, unlimited and in real time.  The bottled water represented newspapers–limited space, distilled, refined and bottled.

I think this is why The Atlantic and The Christian Science Monitor are navigating the changes in media successfully. They aren’t pitting print versus digital, but strengthening both print and digital products. In 2010, that allowed The Atlantic to turn a profit for the first time in a decade, and it built on that in 2011 even as many other publishers struggled. Yes, The Atlantic beefed up its web presence, but it also put a focus on writing talent. In 2011, it’s profits doubled in print, digital and events. It improved all of its businesses and even built new revenue streams.

More broadly though, one of the things that I see in terms of news organisations is that those who develop not only great journalism projects but also marketable journalism and information products are the ones best navigating the wrenching changes in the journalism business. This is a mix of transaction businesses, such as those at Fairfax in Australia or Schibsted’s digital classified business, Finn. Some of those transaction businesses might be built around data, especially business data. The products also usually include events such as conferences or dinners, cruises or talks with key journalists. As Suw and I build our little consultancy, the real gap in journalism businesses we see is not necessarily of editorial innovation but of product and revenue innovation.

* I get a sense that The Guardian is only now moving through the first process of integration as it unifies its ‘digital first’ strategy largely under the management of print editors.

07.06.11
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Huffington Post UK: What does it add?

The head of AOL Europe, Kate Burns, says that the newly launched Huffington Post UK has no competitor. Really? Let’s ignore the over-served national newspaper market here in the UK for a minute and focus on the aggregation plus blogger network model of the Huffington Post. While Burns points out Rue89 as one of the European competitor, she conveniently overlooks the Guardian’s Comment is Free here in the UK. Both sites were inspired by Huffington’s success in the US and roughly follow the same model although adapted for their markets. Beyond that, the Telegraph has a blogger network, MyTelegraph, that allows anyone who wants some space to air their views.

It is interesting to see that HuffPo UK is going a bit up-market compared to its US model. For a US transplant in the UK like me, the US HuffPo always has felt like the bastard offspring of the Indy’s opinion page crossed with the Mail’s skin-tastic, pap-driven parade of c’lebs. Plenty of American friends have taken to complaining that it’s the skin that wins when it comes to HuffPo’s page views. It has toned down the celebrity sidebar for the UK homepage, probably in no small measure that the UK is not only over-served in quality national dailies but has a veritable smorgasbord of ethically challenged tabloids. One tab recently criticised Pippa Middleton for allowing its dwarf photographer to take an upskirt shot. (No, I’m not going to link to it even if I could find it. Yes. I’m being completely serious.)

I’m still wondering just what HuffPo adds to the UK market apart from a new outpost in its namesake’s global ambitions. AOL’s display ad sales are starting to rebound, but it’s pouring money into its local project, Patch, with growing evidence that it’s a money pit with no prospect of becoming a money maker. It’s on a high-salary hiring spree in the US as Arianna has opened a second front to Rupert Murdoch’s first against the New York Times. One thing is certain, with the BBC, The Daily Mail and The Guardian launching in the US and the HuffingtonPost launching here in the UK, cross Atlantic competition is definitely heating up. The big question is whether the ad dollars will follow or be spread thinner than ever.

06.16.11
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The Guardian needs an intervention

The Guardian and its Sunday title, The Observer have just announced a “digital-first” strategy. However, this is not a triumphant announcement. This is a burning platform admission.

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.