Wednesday, January 7, 2009

Reinvent, for the end is near!

I'm preaching again from my "online first, print once or twice a week" soapbox. It's the right solution for news markets both large and small, but punditry seems to be focusing on the less plausible outcomes: preservation, somehow, of the traditional model, or the elimination of print altogether.

At the traditional end is Alan Mutter, the Newsosaur, dissecting the situation in San Francisco and speculating on options. He notes that the facts on the ground are: Hearst has spent $1 billion, cumulatively, buying and running the Chronicle; the MediaNews-owned network of papers in surrounding communities exceeds the Chron's circulation 2-to-1; and the two companies are already interdependent in a number of ways. So while a local gadfly might throw a monkeywrench in the form of some legal challenges, Mutter's crystal ball says:
With the outlook for the newspaper business now worse than ever, a more radical solution than nipping and tucking the Chronicle to profitability would seem to be in order. And it probably is this:

Folding the Chronicle into the network of MediaNews Group papers that completely surround it – a network, significantly, that Hearst itself played a major role in building.

In that event, the Chronicle’s now-independent news, ad sales, production, distribution and administrative staffs would be merged into a single entity managed by MediaNews. Deep staff cuts likely would result in every department, not the least of which would be the already decimated newsroom.
But then what? Continue to print and distribute all those papers seven days a week? How is this not just more nipping and tucking? MediaNews has been consolidating the operations of its Bay Area regional cluster, step by step, for nearly 20 years, and yet its own difficulties continue. If it assimilated the Chronicle, the elimination of the remaining competition might create a configuration that would stem the flow of red ink for a few years, but it would not be a new business model reflecting the needed bold reinvention of the industry. Rather, it would be an extension of strategies that have failed in the Bay Area and elsewhere.

Meanwhile, across the continent, everyone seems to know what to do with the New York Times, except Arthur Sulzberger. Following up on Marc Andreessen's widely-quoted October pronouncement that "you have to shut off the print edition, right now," Michael Hirschorn speculates in the Atlantic that the demise of print may be more sudden and more imminent than the standard scenario of a gradual lights-out. He notes the New York Times Company's perilous cash position and its upcoming $400 million refinancing need, and predicts:
At some point soon—sooner than most of us think—the print edition, and with it The Times as we know it, will no longer exist....Most likely, the interim step for The Times and other newspapers will be to move to digital-only distribution (perhaps preserving the more profitable Sunday editions).
That parenthetical "perhaps", however, is huge. It's not a step toward oblivion, it's the way out of the swamp. It represents the strategic reinvention that's urgently necessary right across the newspaper industry. Virtually every newspaper in America is publishing money-losing editions several days a week. There's no way to know for sure, but it's probable that Sunday is the only day the Times is profitable. And that the same is true in the Bay Area at the Chronicle and the MediaNews cluster.

In Detroit, JOA partners Gannett and MediaNews, faced with the same situation, came to the brink of deciding to kill off all their money-losing editions and to henceforth print only on Sunday and maybe one or two other days. But, fatally hesitant to kill off their seven-day franchise forever, they plan instead to retain a single-copy-only edition four days a week. Nipping and tucking. My guess is that within a year, that edition will be history.

The opportunity for Hearst and MediaNews in the Bay Area, and for the New York Times, is to plan now for a truly transformational step toward the news enterprise of the future, rather than another incremental set of staff cuts and tonnage reductions. It's time to reinvent, to define a whole new way of doing business.

In the Bay Area, that does mean merging the MediaNews papers and the Chronicle into one regional operation, but not stopping there.

The merged entity should cut print back to one big, highly profitable weekend (not Sunday) package (distributed everywhere starting Friday afternoon). The same approach at the Times.

The Weekend Times, and the Weekend Chronicle (or pick a neutral title, like Bay Observer), would be bigger, better, more thoroughly read and more valuable to advertisers than the current versions. They should drop all breaking news and focus on analysis and features. Their biggest value to readers would be as a guide to all other media.

Newspapers, especially on Sunday, have always served this "media guide" function, but haven't constructed themselves around it. Guide functionality is currently manifested in Sunday paper TV listings and reviews, book sections, movie sections, travel sections, arts sections, food and wine, fashion, real estate, home style or "living" (think of all of these—travel, arts, cuisine, fashion and design—as entertainment media) and the like. (For some strange reason, few papers have done much to become guides to the internet, but that should be added to the mix.)

And yet this whole package is sold as a "news" paper, in a package wrapped with a breaking news section. This may have made sense until a decade ago, but it doesn't any more. And unless it's changed, the danger is that Sunday editions will start losing money also, eliminating any hope of returning to profitability.

Let's do this:

Take the camouflage off the Sunday package: Lose the hard news wrap.

Build up the "guide to all media" functionality—that's the part subscribers are paying for, because they want and need it. Keep arts, travel, books, movies and all the rest. Add technology, internet and even magazine coverage. Include some geographically zoned sections if ad demand warrants it. Build other weekly, monthly or seasonal niche publications using the enterprise's wealth of content.

Shift publication to the start of the weekend—Friday afternoon—to maximize the value to readers as well as newsstand shelf life. Drop all other daily editions. Concentrate sales on moving the bulk of the week's advertisers into this edition—there's still plenty of advertising that wants and needs to be in print, and this will make the weekend edition hugely profitable.

Devote 20 to 30 percent of staff resources to the weekend product and turn everyone else into online reporters. With the right structure, the site can be at breakeven now, and start making money as the economy picks itself back up. (As it will.)

Attract social networks around content areas. This is critical—in a sense, newspapers have always served as community social network hubs; they need to do so online.

Get the online sector ready for a big jump in mobile e-readership as new devices and apps catch on.

Differentiate the online site from the weekend print brand; they're two different animals from now on.

Return to profitability.

7 comments:

dr droock said...

The advantage of daily is being an infrastructure like print product. So maybe it could be done every day and still support itself.

You say, "Build other weekly, monthly or seasonal niche publications using the enterprise's wealth of content."

I would be very curious if you have any reactions to the following:

Daily 16 page issues:
3 pages table of contents for the website. Get ready for cell phone to the web linkage.
3 pages a longer story - not breaking news.
10 pages local advertising.

Do it with a team that has it's own P&L. The cost of printing is either outsourced to a commerical printer, or is done with the extra capacity in the plant.

Roll it out by neighborhoods or congressional districts or some other natural local boundaries.

I can't seem to figure out why this doesn't work.

Martin Langeveld said...

Dr. Droock: Sure, a daily niche product of some kind is a possibility, most likely a 5-day "commuter" freebie. This could be layered onto the model I suggest, but it would no longer be the old daily paper, it would be a newly introduced product, launched and kept only if profitable.

Paying for Online Content & Services said...

6 months from now everyone will be saying "Martin is right"! Hopefully there will still be some newspapers around to implement.

dr droock said...

Thanks for the answer. I agree. Try it. If it works, scale it.

But I'm thinking it's better than a freebie.

For example the business charts in the NYT give more info in print than on the web. Also the info graphics that the NYT does are awesome.

The new thing is that new newspaper printing tech now allows for versioned editions at press speeds.

My theory is that less is more valuable than more. The charts, the info graphics + the TOC + local ads..sell the whole thing for 25 or 50 cents on the way to the commute.

Then version it with stuff that is free at http://www.everyblock.com/.
Infrastructure real stats about neighborhoods. And then some stuff from local blogs.

Just a thought.

camccune said...

I like the idea of an early weekend edition. This is the most sensible proposal I've seen. It changes the news model, instead of just rearranging deck chairs.

As a Chronicle subscriber, I hope someone there is listening.

Gina Chen said...

I like the idea of using only a portion of your staff for the print publication and rest for online. Obviously, they'd work together and collaborate and bring the best of the Web back to the paper ...

But I think that's markedly different than the model now, where most of the staff works for print -- and for must staffers online is "on the side when I have time."

Martin Langeveld said...

Right, Gina. Last week I happened to send a press release about a local event to our local paper. It couldn't run for about 5 days due to "lack of space". No reason it couldn't have gone on their web site, however. And if they were thinking "online-first", of course it would have.