Category Archives: management

07.08.15
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Saving local journalism with vision

Local journalism is struggling. It’s struggling to develop revenue streams that will replace the classified and print display ads that it has lost over the past two decade, and I know that we also have a challenge to engage our audiences in this media saturated environment. 

Tom Grubisich of Street Fight Mag gives a great overview of some of the deep thinking going on about local media in the US on his way to laying out his prescription. 

I think the entire local news industry – both “legacy” newspapers and broadcasters and entrepreneurial and corporate “pure plays” – need to get out of their journalistic, Fourth Estate mindset and show their communities that they are all-in. They have to do this not only with residents they want as readers but also local merchants as advertisers. And with everybody else in the civic space. Otherwise, they’ll continue to be minor players in the otherwise thriving local digital space.

Amen, brother. As journalists, we have an almost religious belief in The Mission, but in local media, we must connect with our communities. This week, I’m having the third community forum for my four newsrooms. We’re going out to meet our communities, and this isn’t just a one-off. We’re going to be at farmers’ markets and other community events. We want to show our commitment to our communities and be visible, not just as individuals but as a team. 

Grubisich highlights how Steven Waldman has recommended in his “Report for America” that national and local philanthropic groups should support investigative reporters on two-year placements on short-staffed local news teams to do deep accountability journalism.

But Grubisich believes that “communities deserve more”, and he believes that they news organisations need vision. They need “an auspicious mission”, and he believes that to capture the imagination of Millennials and donors, this mission needs to be something like tracking the huge demographic shifts in the US. 

I think that this is one vision, and I believe that these large thematic stories are important. They help drive conversations in communities and build context for audiences that drive engagement. 

In our regional news group, Gannett Wisconsin Media, we did this with our State of Opportunity project. This project looked at the recruiting challenge companies have in our communities. We’ve getting hit with a double whammy. Our employers can’t fill the openings they have due to a number of factors – drugs, skills gap and the ’Silver Tsunami’. What’s the Silver Tsunami? I’ve spoken to major employers in our communities, and they say that up to 30 percent of their workers may retire in the next five years. That’s not only a huge hit in terms of numbers, but these are their most experienced workers. A lot of talent and skill will walk out the door. If we don’t find a way to meet this challenge in the coming years, our communities will get hit by a huge economic drag when some haven’t recovered from the Great Recession. The next five years are pivotal and will set the future course of these communities. Will they grow and thrive or enter decline? 

And that brings up one caveat that I have about vision. I like Tom Grubisich’s idea, but the vision you choose has to be rooted in your community. We can talk about grand visions and national trends, but these visions have to have local relevance. Otherwise, what’s the point of a local news outlet? That may sound obvious, but with consolidation and centralisation, a lot of these grand visions are driven from the centre to the periphery. What sounds good at larger cities or at HQ may not mean a jot to local audiences. That is a huge, but obvious danger with these macro-trends being the focus of the centralised editorial strategies. 

01.24.14
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Strategy is not just for Christmas

I’ve spent a lot of my time over the last decade helping businesses to put together strategies for the use of social media, both internally for collaboration and externally for community building and marketing. I know that for some companies, my strategy was a document that they continued to refer to for literally years after we put it together. (I caught up with one ex-client three years after I delivered his strategy, and he said he and his team will still referring to it and still found it useful!)

But many strategy documents come with built-in obsolescence. If you’re not very careful, social media strategies can age fast, because of the rapidity of change within social media. But it’s not just the tools that change, it’s the demographics. Facebook is ageing, Twitter getting younger, and the 55+ demographic is growing faster online than any other. Your target audience could be shift platforms whilst you’re busy implementing a strategy that’s now out of date, and how would you know?

That being the case, I was very interested to stumble on Thomas Martin’s blog post about “agile strategy development”, in which he calls for the Agile methodology to be applied to company strategies.

Similar to software development, the complexity of strategy development is increasing. Globalisation, faster innovation cycles, stronger competition are only some of the factors that make it harder and harder to devise stable, long-lived and eventually successful strategies. Agile strategic planning addresses this by keeping the strategy fluid.

[…]

Agile strategy development shares the following characteristics with agile software development:

•  Continuous monitoring of the external environment during the Analyze activity.
•  Regular review and – as required – updating of strategic objectives and plans during the Define and Plan activities.
•  Frequent feedback from Execution on the effectiveness of the implementation.

Although Martin suggests that such an approach requires “less external input” from consultants, I’d argue that what it requires is actually a longer-term relationship with a good consultant who has a familiarity with your business but also enough distance to help you see the bigger picture.

I succeed as a consultant because I can see a company’s problems from a very different vantage point to them, not only because of my own deep experience with social media, but also because I’ve worked with so many companies that I can see common errors in thinking and execution that would otherwise be missed.

To get the best result from social media you need an informed strategy, a regular review process, and dependable advice that both ensures that you are on track whilst also bringing in a fresh perspective and valuable expertise. An agile approach to strategy makes a lot of sense to me, and it’s something companies should seriously consider. If you’re going to spend time and money on strategic thinking, it’s essential that you keep that strategy fresh, relevant and up-to-date.

01.10.14
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Too much ‘I’, too little team thinking at legacy media for innovation?

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?

Charles Warner, part of the Forbes network teaches Media Management Program at The New School, was recently asked how to drive innovation at an “old-line media company, and he thinks it is down to the individualistic culture at legacy media organisations.

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.

09.27.13
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Journalism transformation: Break down silos and innovate strategically

News organisations are still facing a lot of challenges in 2013. Tribune newspapers is reportedly looking for $100 m in savings, which will probably mean more staff cuts. Gannett recently eliminated 200 jobs at its local newspapers. Reuters has been the focus of a lot of rather unflattering coverage of how it blew through an estimated $20 m on a consumer website revamp that failed to deliver a working website.

I don’t mean to be a “prophet of doom” to borrow a line from Charlie Beckett of the London School of Economics, but times are still tough. However, Charlie looks at some recent research to find out management strategies of news organisations that are successfully navigating this disruptive period and transforming themselves into multi-platform news providers. In a recent piece in inPublishing, Charlie says:

Recent research on the most progressive newsrooms says that the successful ones are those that combine commercial, technological and editorial management most closely. This is not just a case of slavishly following the money by following the clicks. Instead it is more a case of linking editorial tactics to a clear plan for revenue growth.

This reminds me of a conversation I had this week with my former editor at the BBC, Nic Newman. In the past, we had editorial, commercial and technical silos in news organisations, and we need a lot better coordination. There is a lot of discomfort from journalists about breaking down the wall between editorial and commercial, but I believe Charlie has found the right way of putting it. We have to link editorial strategy to revenue growth if we want to have sustainable, independent news organisations, and I think that there are a lot of ways to build the business of journalism to support the mission of journalism. However, as Nic says, we’ve all got to work together, commercial, technical and editorial.

Joy Mayer, the director of community outreach for the Columbia Missourian, the newspaper run by the faculty of the University of Missouri and staffed by journalists there, wrote a great piece on how to create editorial tactics that work. Speaking specifically about social media strategies, she says that to create an effective strategy, you need to ask three questions:

1. Why am I doing this?
2. What do I hope to happen? (Is your answer measurable or trackable?)
3. How will I track what works and use that feedback to craft future strategies?

With print, broadcast and digital strategies, we need to ask why we are doing something, and I think that this is really important in terms of opportunity costs. What is the cost of doing this as opposed to something else? Let’s stay on the topic of social media. This week there was quite a hullabaloo about Popular Science shutting off comments on all but a handful of debate focused articles. PopSci associate editor Dan Nosowitz said in a radio interview: “we think that the current form we have for comments wasn’t doing our readers much of a service”, according to a post on Poynter.

Let’s step back and look at a different way. What is the opportunity cost for PopSci of comments in their current form? What would it cost in terms of staffing to improve the experience? Is that staff time better spent elsewhere? Of course, I skipped to question two on Joy’s list. Going back to her first question: Why do they have comments in the first place? Is there a better way for them to achieve their goal another way? What are the metrics for success of this new strategy? If you answer the why question, you’ll be able to communicate more effectively to staff what they’re trying to achieve, and as an employee, I can remember examples when editors or managers helped me be more effective by giving me clear guidance. Yes, we want to experiment a lot, but we also need focus to be effective.

This is what transformational management looks like: Clear goals that achieve the journalistic mission and help generate revenue to support that mission.

09.05.13
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Journalism innovation: Asteroids and adaptation

This is a follow up to my piece or The Media Briefing looking at why integration might have been the wrong response to digital disruption. Like that piece, this originally appeared on The Media Briefing. 

After I challenged a lot of the conventional wisdomabout print-digital integration, Neil Thackraycompared digital disruption to “a sci-fi B-movie where Earth is threatened with destruction by an incoming asteroid”. I love the analogy.

He broke down the response of media managers to digital disruption like this:

  • Asteroid deniers, who don’t believe that digital is a threat.
  • Radio astronomers, who spot the asteroid at a distance and know the world is doomed but see the threat as so distant that they take no action.
  • Naked eye astronomers, who have only just spotted the asteroid and are making frantic but futile changes.
  • Rational scientists, who spot the asteroid early and invest in a rocket ship to carry them away to safety.

As Neil points out, being able to spot the asteroid doesn’t mean we’ll be able to save the planet. One of the major lessons of Clay Christensen’s Innovator’s Dilemma is that even once a disrupted industry sees the asteroid as a threat, they still too often fail to adapt successfully.

Kodak developed the first digital camera in 1975, but it couldn’t capitalise on that early innovation. It created an iconic, successful business based on its dominance in the film, chemical and paper business.  But as cheap digital products got better, Kodak was killed by its cash cow.

It has been much the same for print media. In a 2011 report, Christensen, working with Canadian journalist David Skok and Harvard Business review writer James Allworth explained how magazines and newspapers’ dominance in print became a weakness:

For many years, the systems and processes used to gather, distribute and sell the news worked well. And in most respects they still do. It is a marvellous sight to witness a newspaper brought to life or a newscast on air, 24 hours a day, seven days a week. Those systems were designed precisely for that process. But what was once an advantage has become an albatross.

The result is that much of print media finds itself stuck. Christensen, Skok and Allworth put the situation for news organisations like this:

Four years after the 2008 financial crisis, traditional news organizations continue to see their newsrooms shrink or close. Those that survive remain mired in the innovator’s dilemma: A false choice between today’s revenues and tomorrow’s digital promise.

At this point, if you’re a regional newspaper publisher in the UK or a print consumer magazine group, you know that your traditional audiences are declining, but you also know that your current digital revenue won’t pay the cost of supporting your traditional business. Yes, print media groups are all trying to grow their digital revenue as quickly as possible, but the big question still remains for most groups in this very different market: How to adapt?

The economist and writer Tim Harford has an entire book on the subject,Adapt: Why success always starts with failure. In the book, he lays out a three-part “recipe for successfully adapting”:

  • Try new things, in the expectation that some will fail.
  • To make failure survivable, because it will be common.
  • And to make sure that you know when you’ve failed”.

When I was digital research editor at The Guardian in 2009 and early 2010, my goal was to bring down the cost of experimentation down as close to zero as possible and try different things using low or no-cost third party services. It’s a rather simple strategy to increase experimentation.

These days if you want to try something editorially, there’s an app, a web service or a plucky start-up for that. To know whether I was successful or whether I had failed, I had a set of goals that ranged from higher user engagement, mining our own stories for data or a more efficient editorial process. In an ideal world, I would have worked with commercial teams to add revenue goals for some of the projects. Goals are important because if you don’t know where you’re going, you’ll never get there.

It is a model that increases experimentation, and for those projects that are successful, they can be deployed across the organisation.

Experimentation, especially editorial, is easier than ever, but organisational change is still really hard. In the next piece, I’ll look at how to scale innovation and create organisational change.

08.12.13
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Print-digital integration ‘sucked the life blood’ out of journalism’s future

This post originally appeared on The Media Briefing.

On both sides of the Atlantic, the newspaper business is experiencing its own episode of back to the future, reverting to a past when billionaire sugar daddies buy and prop up ailing titles.

The motivations sit on a continuum from a public service minded sense of noblesse oblige all the way to treating media as something akin to a US super-carrier, as the ultimate tool to project power. The new class of owners include former KGB agents, hotel developers, hedgies and, of course, this week, Jeff ‘Vishnu’ Bezos, the creator and destroyer of retail business models.  

Historians will simply say, twas ever thus, and point to the fact that we’re merely returning to an older model of ownership. But could newspapers have responded to the digital tsunami in any other way than they did?  

The newspaper industry had a clarion call on how to respond to disruption, but like most disrupted industries, the industry has failed to adopt these strategies.

Newspapers are only the latest in a long line of industries that have been rocked by technological change. Clayton Christensen has studied hundreds of companies across a number of industries that have faced disruptive innovations, and in 1997, he wrote the Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail.

Clark Gilbert is former professor of entrepreneurial management at Harvard Business School and began working with Christensen to apply the Innovator’s Dilemma to newspapers more than a decade ago in 2002. Unlike other industries, which simply did not see the disruption coming, newspapers recognised the threat posed by the internet, but Gilbert said, “Unfortunately, threat-induced response also leads to very rigid behavior.”

He added:

We found that despite recognizing the problem, most companies aggressively “crammed” the new business into the old business model and sales processes. For example, most newspapers tried to force their online sites to make money by selling the same types of advertising to their traditional print advertisers. The early online advertisers were different and the type of advertising they sought was much more focused around the interactive and direct targeting attributes of the new media.

Threat had motivated action, but it was resulting in an aggressive replication of the newspaper business. Newspapers had spent a ton of money, with little to show for it. In an effort to defend their core market from attack, newspaper companies were missing the new emerging market altogether.

More than a decade ago, Gilbert also had statistical evidence that should have been a warning to newspaper executives that digital-legacy integration was not the answer to their problems. In fact, it was exactly the wrong thing to do. He said:

In our large sample study, sites that separate their online organizations from the newspaper were more than twice as innovative than sites that remained integrated into the newspaper. More importantly, these sites gained 60 percent higher market penetration!

Fast forward to 2013. Three years ago, Gilbert left Harvard Business School to become the CEO of Deseret News. While on average US newspapers earn 17 percent of their revenue from digital, The Deseret News and Deseret Digital media earns 45 percent of their revenue from digital, according to the American Press Institute (API).

In April, I heard Gilbert speak at the International Symposium of Online Journalism in Austin about how he has applied the insights from the Innovator’s Dilemma to the Deseret News in Utah, and he laid out why integration was absolutely the wrong approach to disruption.

“In industries that are being disrupted, 9 percent of companies make it,” he said. Of the 9 percent that made it, 100 percent had set up a separate disruptive business unit.

Separate means:

  • A separate physical location.

  • Separate profit & loss.

  • Separate direct sales.

  • Separate content product and technology teams.

  • Separate management structure.

However, it is important to understand that while Gilbert says integration is a mistake, potentially a fatal one for your company, he is not simply advocating a digital first strategy. Key to his strategy is a dual transformation, creating a new disruptive digital company while also transforming the traditional print product.

In his transformation of the legacy print and broadcast business, he said that it is important to understand that in the age of digital media, generalists are not as  valuable as specialists. Local media should excel in this age, but instead they have suffered.

To help the newspaper find its USP, Gilbert used detailed market research to identify six core coverage areas. Yes, they slimmed down the legacy product, but they ploughed savings back into covering these six core areas that allowed them to create a differentiated product.

For the disruptive digital business, they are creating a company that looks beyond the twin revenue streams of advertising and paid content that dominate the income mix of most media companies.

“Its divisions include, but are not limited to, e-commerce, marketplace services, digital consulting and other emerging revenue streams in which tablets, mobile and social are integral parts,” the American Press Institute reported.  

Instead of one struggling company, Gilbert is trying to create two dynamic companies. They do meet, but he keeps the interaction at a minimum. Otherwise, the legacy business often “suck(s) the life out of” the digital disruptive business, he told the American Press Institute, adding, “You don’t get excellent from either if they’re integrated.”

Of course, the US isn’t alone in examples where splitting the legacy and digital business delivered better results. In fact, one of the pioneers is Scandinavia’s Schibsted. In 1999, it decided to split its digital divisions from its newspapers, and it has gone to build one of the most successful media companies in the world by building one of the most successful digital classified businesses in the world. With operations in 28 countries, US analyst Ken Doctor reported in February of last year that Schibsted earns 36 percent of its revenue from digital.

Looking at the recent newspaper buyouts by billionaires, the real question should be whether they will do the same thing as their previous owners, sinking millions into a disrupted business or whether they will heed Gilbert’s research and create a separate disruptive digital unit. Maybe that’s where Bezos will breath new life into the Post with a resurrected Post Digital. 

07.05.11
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Advice to a younger self

The Media Briefing is using LinkedIn very effectively, and on one of their discussions, they have the following question:

Q: If you could go back in time and talk to yourself as a fresh-faced young entrant to the media industry what advice would you give?

I thought about this for a while, and to be honest, some of this advice I’d give to myself just a few years ago, not in the distant past of my career. One criticism that I would have of myself is that I’m absolutely horrible at office politics, well I used to be horrible.  Being independent, I can observe politics without being threatened by it and without threatening those I work with. In the respect, striking out on my own has been wonderfully liberating.

With that bit of self-criticism in mind, I have to be fair to myself. Office politics is challenging enough on one’s own culture. I’ve had to learn not only British office politics but also some of the very subtle cultural cues of British society. That notwithstanding, I’d give myself this one bit of sage advice:

…take time to figure out the invisible org chart when you start a new job. Those invisible walls you run into are just border crossings between one fiefdom and another.

Like most journalists, I know how to work in a newsroom. I know what’s expected of me and how to tick the necessary boxes. When you become an editor, you enter an entirely other world, especially in an industry in crisis.

06.27.11
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The Guardian: Burning platform is burning

After The Guardian and The Observer announced its ‘digital-first’ strategy the other week, which I, like Kevin, see as a burning platform admission, Alan Rusbridger went on Radio 4’s Media Show (MP3) to talk about the situation. Listening to the interview with half an ear open, one would hear a very calm, measured response from Rusbridger that would seem to make an awful lot of sense. But listening more closely, I heard a lot of statements that worry me, because they don’t seem to jibe with reality at all.

The Media Show’s Steve Hewlett started off by asking whether there really is a cash crisis at the Guardian, and Rusbridger replied:

It was a kind of, sort of, pre-crisis moment so we don’t want to get to that crisis. We were saying that if we did nothing and continued as we were, it wouldn’t look too good. We actually wouldn’t run out of money because we’ve got lots of investments in other things, but we would run out of the cash reserves that we have.

For a long time, The Guardian Media Group’s cash cow was actually Autotrader, of which they sold 49.9% in 2007 for £674m. At the time, the Independent reported:

Carolyn McCall, the chief executive of GMG, said: “The basis of all our investment is creating a sound financial basis for The Guardian. It’s all about the long-term security and independence of The Guardian. It’s a great position to be in.”

GMG is owned by the Scott Trust, a not-for-profit organisation set up to safeguard The Guardian “in perpetuity”.

Ms McCall said the money would be spent “very wisely and carefully over a very long period of time”, suggesting perhaps 50 or 60 years.

But “wise” and “careful” are not words that one could use to describe the next big deal GMG did, which was to buy the debt-laden Emap in 2008 with private equity firm Apax re-valuing the deal less than two years later:

GMG and Apax bought Emap for £1bn in 2008 but the business has been squeezed by the recession and weakened by a high debt burden which costs £50m a year in interest payments.

[…]

Apax has written its investment in Emap down to zero and, while GMG has not yet followed suit, it is expected to review its valuation in the next few months.

Emap has £700m of borrowings and GMG had to inject “an undisclosed amount of new cash” in Jan 2010. GMG has now written off about half of its investment in Emap, but they can’t write off the whole lot like Apex did because that would blow a hole in its balance sheet and no one wants to torpedo their own ship.

Furthermore, from Oct 2010:

Emap, the magazine, data and exhibitions business, has reported a 4% year-on-year fall in operating profit to £52m in the first half of 2010.

The company, which also reported a 4% fall in revenue to £135.5m in the first six months, said the results were “primarily due to uncertainty in the UK public sector”.

Emap’s profits continue to fall:

Emap has reported a significant fall in pre-tax profits in 2010, as government spending cuts hit revenues in its magazine publishing and conferences division.

The business-to-business publisher, which owns titles including Retail Week and events such as Cannes Lions, reported pre-tax profits of £27m for the 12 months to 31 December, according to accounts made available on Friday.

This is not a recipe for success: Emap will now struggle to cover the interest payments on its debt, and any profits from Autotrader are “ring-fenced to repay debts“. Whilst GMG has money in other investments, it’s not clear whether they have already had to raid those funds to keep going, or even whether there’s enough liquidity there for those investments to be useful.

So whilst Rusbridger is right that GMG has investments in other things, that’s not necessarily a reason to be relaxed about its finances. In 2009, The Guardian was burning £100,000 a day and reported an operating loss of £36.8m. In June’s announcement, their operating loss is stated at £33m, a reduction of just £3.8m.

“So it’s not a crisis,” Rusbridger continued, “but the point of the talk was to say that we have to do things before we get to a crisis.”

If the above doesn’t look like a crisis, then I don’t know what does. I have a lot of friends still at The Guardian, and the mood on the ground amongst many of them is that the sense of urgency one might expect to feel internally is entirely missing.

Hewlett later brought up the decline in advertising revenue, the fact that circulation is down 12% year on year, and the above mentioned cash losses of £33m. Rusbridger responded:

The big picture for the whole of the press, the whole of the market is going away at about 8%, and the Guardian is completely in line. Classified advertising has largely gone, and I don’t think that will come back and as circulations decline across the market, of course advertisers say, “Well, we want to pay you less,” and you just don’t want to get into that spiral of decline that we’ve seen in a lot of American newspapers where they then respond by viciously cutting back editorial costs, and then you have something that’s less readable and you’re in some sort of death spiral.

Everyone knows that classified have tanked, but during a recession recruitment advertising also tanks. The problem is, many of The Guardian’s pull-out sections, such as media, tech or public sector, are/were reliant on recruitment ads. Now, you’d think that with a subject like tech, where The Guardian had an excellent reputation and a great editorial team (and I say that not just because I used to freelance for the tech section), there would be plenty of opportunity to widen out the advertising from recruitment to display ads, sponsorships, events, etc. But that’s not what happened.

In 2009, The Guardian wiped out the tech section’s freelance budget and in December of that year they stopped printing tech as a standalone section. Commercial seemed to have no Plan B for the collapse of the recruitment ad market and instead of looking for one, the tech section was radically reduced. Towards the end of 2009 and through the first few months of 2010, The Guardian offered some very attractive voluntary redundancy packages and the majority of the tech section staff applied and were granted redundancy. (Disclosure: Kevin accepted voluntary redundancy from the Guardian at the end of March 2010.)

We know that focused verticals do work in digital — just look at GigaOm, TalkingPointsMemo, Engadget or AllThingsD (a sub-brand of the Wall Street Journal). They’re are doing pretty well, because they are developing key niches and are able to aggregate focused audiences who are primed for ads, but those ads have to be the right sort. General ads aren’t going to fund specialised sections, but if commercial won’t get their heads round what the right sort of ads are and then go out and get them, there’s no hope. Ads are, of course, only part of the revenue equation, but the same holds true for events, sponsorship and premium content.

This is exactly the same discussion I had with Computer Weekly, and it’s a fundamental problem that news outlets need to deal with.

The story is much the same as the Media Guardian, where arguably they had an even more bankable brand. And even with new ventures like Guardian Local, where they created great new products in three different cities and yet couldn’t capitalise on the skill of their journalists or the audiences they built.

In short, this is exactly the sort of editorial self-immolation that Rusbridger says he wants to avoid. But if you can’t capitalise on smart editorial staff and a passionate audience, what are you going to capitalise on?

Hewlett went on to ask Rusbridger about the announcement that sparked all this off: “How is digital first different to what you do now?”

Print is tremendously consuming of resource and time and energy and also the way that you think about things. So if you come in on the morning and your main concentration is on this huge thing that you’ve got to produce at the end of the day then that is going to dominate your thinking. The thing where all papers are exposed is in the innovation and the resources that we need for digital and the blunt truth is that we don’t have enough developers, we don’t have enough people who know about mobile, who know about Flash and data and multimeida so we need to get more of those and we need to spend more of our day thinking about those forms of our journalism.

Two points to make about this: Firstly, the attitude amongst some printies at The Guardian still leaves a lot to be desired. I saw in response to Kevin’s previous post a comment on a non-journalism forum somewhere on the internet from someone who said they worked as a print journalist on The Guardian. I’m not interested in pointing out who this person is, but I am going to paraphrase their stated position:

The website isn’t the newspaper. The website might be popular but it’s about being fast, about being the first to get a story up, and the standard of writing is pretty poor. In the newspaper, though, the writing is much better, probably the best in the industry.

Rusbridger needs to address the print-first attitudes, because print-first thinking results in print-first doing. He had an opportunity to shift towards digital thinking when The Guardian reworked its CMS, but instead of a digital-first system the one they ended up spending £18m on a new web CMS but with a workflow that is still print-first. Even now, even with The Guardian’s great web presence, they still have problems doing basic things like adding URLs to stories.

As for stocking up on developers and journalists with digital skills, well, The Guardian used to have some great digital journalists, but many of them have now gone. The former desk editors of Guardian.co.uk like Deborah Summers (politics), the people who either did digital journalism on the ground, like Kevin, or the people higher up the food chain who had a pretty good handle on how digital was affecting the news landscape, like Emily Bell, have moved on. From top to bottom, the digital folk have either taken redundancy, been pushed out or edged aside.

Furthermore, with lots of the digital talent and the experience they had developed gone and a culture that is still defined by print, the chances for those who remain, and those who have yet to join, to progress into senior managerial positions decreases. The Guardian, as all other news organisations, needs people who truly understand digital in senior positions, but without a pool of talent to promote, they just aren’t going to get that. Indeed, I’d say The Guardian has suffered a significant digital brain-drain and it’s going to take 10 to 15 years for digital folk now to penetrate the higher levels of management.

Rusbridger continued:

We need to get more developers in, so we need all of these people with digital skills, and we’re losing money so we need to reduce the cost base, so yes, we will need to lose some people and we’ll try and do it in a voluntary way, but we need to end up employing fewer people than we have at the moment.

At this point, it’s worth noting that The Guardian has had at least three waves of cuts over the last four years. This will be its fourth round, with more than 300 positions cut, and yet it still only managed to reduce its losses by £3.6m a year?

The final part of this interview I want to address is The Guardian’s new foray into American waters. This is their third attempt to crack America and I find the reasoning quite bizarre. Rusbridger once more:

The UK market is too small, really, we can’t grow very much more here, it’s a fairly mature market. Meanwhile, there is a huge appetite for what we’re doing in America, where now a third of our readers are, and so far we’ve done it with virtually no marketing and a tiny staff, so we think it’s not a ‘nice to have’ but essential that we cater for that market.

Firstly, the idea that the UK market is saturated is strange. We know that general news is hard to monetise, but niche markets can do pretty well, yet in terms of products produced by The Guardian’s key editorial teams, they have barely scratched the surface. As I mentioned earlier, there’s no paid tech product of which I am aware, despite the fact that this is an area where The Guardian could do really well.

Common news business models fall into some pretty discrete categories:

  • Eyeballs: You aggregate an audience and sell access to that audience to advertisers and sponsors.
  • Information: You provide information that people can use to make money or make decisions.
  • Access: You provide access to data, people, networks, etc. which allow people to make money or make decisions.

The tech industry is really very good at exploiting all three of those basic business models but with much of the activity focused on the US, The Guardian could have used its brand to prise that UK market wide open. It didn’t. Media markets are also quite geographically specific, and again, the Guardian could have dominated that market, but didn’t. So the idea that the UK market is so mature that there’s no room for expansion here is a nonsense.

Secondly, the idea that the US market is easier because it is bigger would be a terrible premise for an expensive expansion. There may be a market there, but the monetisation should come first, before the new office and staff. As it is, by opening an office and moving a few people across the Atlantic and hiring 20 to 30 reporters and editors, The Guardian pushes its break-even point much further away than it needs to. The stakes will be high in an endeavour not well augured by its forebears.

The Guardian already tried Guardian America, with a site focused on American content with American ads, and that closed in October 2009 due to “continuing changes in the distribution patterns of web content”. Why will this new venture be more successful? And what will the business model be? As American news outlets know, making money of general news over there is just as hard, if not harder, than it is here, so The Guardian will need an innovative niche strategy. ‘America’ is not a niche, not over there, anyway. And ‘Europe for Americans’ is likely to be equally tough thing to turn into a product. They are also launching the project in New York, already at the centre of a New York Times, Wall Street Journal and Huffington Post battle. Do they have the resources, much less the stomach, for such an epic media battle?

I have fond memories of The Guardian as the paper I always wanted to read, the paper I always wanted to write for, not to mention the paper that got me my first ever job. Indeed, The Guardian also gave me my first major freelance commission outside of the music press and I would have been happy to write a lot more for them had circumstances allowed. I don’t want to see it fail, and I don’t want to poke it with sharp sticks for the sake of it. But I am worried that Rusbridger is a visionary lacking in business sense, clarity and a firm grip on reality. If The Guardian is to survive, it needs someone who can lead it with a clear, commercial head. I’m not convinced Rusbridger is that person.

05.07.10
by

Cultural inertia is the biggest problem for tech adoption

Dean Kamen, inventor of the Segway, told the Better World conference at the end of April that the main barrier to technical change is cultural inertia:

Don’t gauge the rate at which you will be an instant success by how quickly you can develop the technology,” he told would-be entrepreneurs. “I would gauge how long it takes the collective culture–any culture–to give up something, even if they are frustrated or unhappy with it, and accept something different. The rate of emotional, intellectual, cultural, and regulatory inertia of the world is very high. It used to be much lower in this country, but even that is changing.

Whilst Kamen was talking more about hardware, exactly the same problem befalls software and webs services.

This is, in part, because of the cognitive biases that we all suffer from. Joshua Porter discussed some of these at dConstruct in 2008. He explained that we value things we own “approximately three times more than is rational” – that’s ownership bias. But entrepreneurs “overvalue software that they’re offering by about three times” – that’s optimism bias.

But the net effect is that there’s a nine-times disparity between the person who is the potential user of the software and the person who’s offering the software. So there’s this huge gulf between the desire of the potential user and desire of the person offering the software.

[…]

The initial product adoption is one of the largest problems facing almost every web-design team in this day and age. So, I think, looking at it from this standpoint, at least we know what we’re kind of dealing with. It’s a huge barrier.

So it’s not cultural inertia in the sense of people just being too lazy to think about how they can improve their experience, but a much more ingrained behaviour controlled by a set of psychological short-cuts that our brain takes without us realising.

In short: Adoption is hard and we have to think very careful about how we can overcome these barriers.