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Newspapers' Plan For Survival: Charge Money, Beat Up On Craigslist And Keep Repeating To Ourselves That We're Needed

from the good-luck-with-that dept

Tue, Jun 9th 2009 3:54am — Mike Masnick

There's been plenty of coverage about the potentially antitrust-violating meeting of newspaper execs in Chicago recently, and late last week reports came out about some of the recommendations put forth by the American Press Institute at that meeting. The API apparently handed out two whitepapers, both of which are amusing, only in that someone actually thinks they're useful. The first was effectively saying: "Craigslist really sucks, so let's try to beat up on Craigslist." The second, more thorough whitepaper, rehashes a bunch of debunked ideas about how newspapers should lock up their content in order to charge for it, including such gems as: "Establish that news content online has value by charging for it." Apparently someone at the API is unfamiliar with the difference between price and value. You don't establish value by putting a price on things. You are able to put a higher price on things by creating scarce value. But the industry isn't looking to do that. It's looking to pretend its content has value, by locking it up. Unfortunately for the newspapers (but good for everyone else), economics doesn't work that way.

Apparently part of the plan to get around anti-trust issues is to create an intermediary, sort of like an ASCAP for the newspaper industry, which suggests a near total misunderstanding of the differences between news and music -- but if that's where the industry wants to go, why not let them and watch smarter business folks mop up the mess for profit.

In the meantime, an absolutely fantastic teardown of the API's whitepapers comes from John Temple, the former editor, president and publisher of the now defunct Rocky Mountain News. If anyone were susceptible to the backwards looking "let's try to recreate the way things were" argument, you would think it would be him. But, instead, he responds to the API's reports by describing just how backwards looking it is and why it should scare anyone in the news business:

Imagine you're a young business school graduate trying to decide where you want to start your career. (OK, I know there are no jobs, but imagine it anyway.) You attend a newspaper industry summit and hear one of the big ideas from an organization at the heart of this world is to compete with Craigslist. What do you think you would think? Talk about an industry looking in the rear view mirror. Isn't that an idea that might have had legs, oh, maybe five years ago? How could it represent in the eyes of that young business school graduate any kind of exciting opportunity today? The advice boils down to, "Let's win back our business from the guy who's eating our lunch." How is the newspaper industry going to attract any of the best and brightest into its ranks if its ideas are stale, at best?

What might even be more troubling about this proposal is how newspaper people seemed to denigrate the Craigslist brand, when all they need to do is talk to people -- including in their own buildings -- to find out that most of those who've used the site seem to genuinely value it. Why? Because it gets results and it's free.

Temple also points out two big problems with the API's suggestions. The first is that it's suddenly trying to get people to pay for what they're used to getting for free -- without adding any additional value worth paying for. And, the second (though related) is that they're not actually looking to do anything really new or unique to embrace what the internet enables. While plenty of other websites and services are embracing the technological power of the internet, the best this report suggests is "people who work at newspapers should start experimenting with social networks":

Of course leaders should always be learning. That's a given. But are they serious? Isn't this a little late? If newspaper industry leaders aren't doing this already, do they really belong in their positions? Why should shareholders pay executives to learn all they can when they should be able to find ones who already know what they're doing? If people need advice like this, should they be running newspaper companies?

All in all, the meeting itself, and the recommendations from the API certainly show an industry that's not looking to compete or add value. It's looking for ways to rebuild the walls that let it exist without competition in the past. It's a recipe for suicide.

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Filed Under: antitrust, charging, journalism, newspapers, plan, value

23 Comments

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Tom Landry (profile), 9 Jun 2009 @ 4:42am

Of course leaders should always be learning. That's a given. But are they serious? Isn't this a little late? If newspaper industry leaders aren't doing this already, do they really belong in their positions? Why should shareholders pay executives to learn all they can when they should be able to find ones who already know what they're doing? If people need advice like this, should they be running newspaper companies?

Remove the word "newspaper" and thats not only a perfect encapsulation of large media outfits but also the music industry, the movie industry, the auto industry or fill-in-your-choice-here.......

-Lucretious
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R. Miles (profile), 9 Jun 2009 @ 5:11am

Re:
That goes without saying, given all the bad press about piracy and lost revenues is always done by those who think controlling content is a business model.

After all, journalists, authors, song writers, singers, and movie/tv producers never seem to bitch about piracy.

In other news: Judge in TPB case defended as not being biased as membership was about keeping up with copyright issues.

It's going to be a long, tired fight to see the digital age come about with new business models.
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Anonymous Coward, 9 Jun 2009 @ 5:32am

So what you are saying is that they shouldn't compete or attempt to compete in any manner, they should just shut down and give up?

CL is getting quite the reputation for being a viper pit of scammers these days. Should the newspapers ignore this situation, or use it to their advantage to market their products?

Oh, wait, they should just give up because they are a buggy whip business. Sorry, I forgot! perhaps they can close down and open a string of miniputts instead, I hear that new business models are going to make miniputts very popular (it's a trend, and we should all follow trends!)
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Ima Fish (profile), 9 Jun 2009 @ 5:34am

"Because it gets results and it's free."

And don't forget it's also profitable. Not ridiculously profitable like Google, but the people behind craigslist do not want that sort of success. They know that if they went public they'd have to answer to other entities and eventually the service would be destroyed. Because it would become focused entirely on profits rather than providing the best service for its clients and customers.
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Ima Fish (profile), 9 Jun 2009 @ 5:41am

Re:
"CL is getting quite the reputation for being a viper pit of scammers these days. Should the newspapers ignore this situation, or use it to their advantage to market their products?"

God are you really that fricken naive or are you simply retarded Exactly who is giving craigslist the reputation? The newspaper industry. This is no different than newspaper magnate William Hearst's attack on marijuana to protect his tree based paper industry.
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Gumnos (profile), 9 Jun 2009 @ 5:41am

News vs. Music
"create an intermediary, sort of like an ASCAP for the newspaper industry, which suggests a near total misunderstanding of the differences between news and music"

Unfortunately for much of modern news, music and news both now get classified as entertainment. I can watch 60 minutes of "news" or open my local newspaper, wherein I will find celebrity gossip, top-10 best sellers, top-10 music run-downs, cooking segments/columns, interviews with personalities, restaurant reviews, a few sports highlights, teasers for upcoming "news" segments and future prime-time broadcasts, ad. nauseum. The "news" portion of the show is nigh non-existent. What happened to on-site reporting, in-depth analysis, local event coverage, and other "news"? Oh, wait, that's what my RSS reader is for.

-Gumnos
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Kenneth Durril (profile), 9 Jun 2009 @ 5:45am

Newspapers' Plan For Survival
Newspapers started to decline before the internet took off. Newspaper circulation peaked in 1990 (1). Fortunately, their revenues continued grow and they got better at increasing margins. Unfortunately, newspaper executives continued to believe that they could keep squeezing more out of a declining product even after they had more productive, less costly competition from websites. It's not hard to believe that they continue to believe they can make the best of a bad situation.
They need a solution for the public, not just a response to competition.

1) http://www.journalism.org/node/793
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NullOp, 9 Jun 2009 @ 5:56am

Newspapers
Newspapers, indeed, are needed and always will be as long as there are new puppies in the world!
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gyffes (profile), 9 Jun 2009 @ 7:21am

I like this...
it reminds me of when the TSA handed out badges to their gestapo goons. The quote from a TSA higher-up was, "Now people will have to respect them..." as if that's all it took to garner respect: a badge.
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Anonymous Coward, 9 Jun 2009 @ 7:32am

Yo, without newspapers, what am I supposed to wrap my fish with! No disrespect!
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Trails, 9 Jun 2009 @ 7:46am

Love it
The Craigslist "attack" is basically "anyone can use it, it's too simple, and someone else called them pimps!" And then basically goes on to describe how existing newspaper-run online classifieds are too complex (should they be complex or simple?) and that newspapers should get together and copy craigslist.

They admit it will be very difficult for them to pull off their competition site given the coordination needed. I'd bet good money on the fact that political wrangling between papers will result in an inferior product. Hence, they're planning to go up against craigslist with an inferior product which they won't release for a few years yet.

This should be fun to watch, pass the popcorn.
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Esahc (profile), 9 Jun 2009 @ 8:18am

Re:
Off topic:

Your avatar image really cheeps me out.
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jv, 9 Jun 2009 @ 8:32am

Charging Ahead
Don't be silly. All kinds of companies make money by charging high prices for things to make people buy them. What planet do you live on?

Go look up Apple, Mercedes, Saks, Nordstrom, Channel, to name a few.

The first home permanent kits sold in the 1960's were about $.50 they did not sell. They pulled them for 6 months and put them back at a much higher price of like $3.00+ and they sold out from then on.

Newspapers should charge and Google should pay to post news.

The newspapers need to hire the RIAA lawyers and force people to pay. Its called doing business the old fashoned way - to make money. (Just like Craigslist does.)

This is Earth.
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Anonymous Coward, 9 Jun 2009 @ 9:45am

Re: Re:
No, actually it is the same sort of people who have come to realize that Ebay is almost the exclusive domain of scammers these days.

If you are old enough, you might remember when Ebay was the answer to everything - it was going to totally eliminate all sorts of ecommerce, empowering everyone to run their own business and screw the big companies over. Instead, Ebay has turned into a place full of lies, deception, defective products, and outright scams.

CL is getting the same sort of reputation, slowly but surely, not at all helped out by their inability to properly control their adult content by themselves. When the AG's have to threaten action to get something done, it makes people wonder what else is hiding at CL.
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The Infamous Joe (profile), 9 Jun 2009 @ 9:58am

Re: Re: Re:
a place full of lies, deception, defective products, and outright scams.

You could say the same thing about the internet in general, so I assume you're ready to pull the plug on that as well.

There's a phrase about a baby and some bathwater that you should probably google. It applies to your thinking.
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Jimmy Jet, 9 Jun 2009 @ 9:58am

Local paper does bad
Our local newspaper,the Bay City Times (Michigan), just dropped to a three-day-a-week subscription (Thurs/Fri/Sun, because that's what the advertisers wanted), and dropped the subscription price from $14 a month to $13. They also dropped some content (weekday comics, weather, more). They've lost me as a customer.
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Ric, 9 Jun 2009 @ 10:17am

There are solutions to be had
The Papers have access to valuable content. Its just they dont understand how it works. Why does WSJ seem to do what the rest of the print dino's are unable? They know their niche and dont waver from it. News is a time sensitive item. When legacy media turns its attention to breaking news, few can compete with their engine. As the timeliness passes, everybody else gets onboard. Therein lies the answer to their issues.

When you want a paper perspective and/or traditional journalistic content on a hot topic, they can charge and people will pay. As the timeliness dispates so to should their charges for content. What this model does is twofold. It allows them to do what they do best and it offers an opportunity form them to blaze new ground in the world of micropayment adoption. Just be innovators again ... you can do it.
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Mike Masnick (profile), 9 Jun 2009 @ 10:37am

Re: Charging Ahead
Don't be silly. All kinds of companies make money by charging high prices for things to make people buy them. What planet do you live on?

Go look up Apple, Mercedes, Saks, Nordstrom, Channel, to name a few.

Yes, those are luxury brands, that have invested heavily in their brand image, to give it a unique value.

That's not what the newspapers are talking about. They think that if they just put a high price on things people will suddenly perceive them to be high value.

Newspapers should charge and Google should pay to post news.

Ok. Good luck with that. You do realize that Google doesn't post news without paying. It does *link* to news, but the news it posts, it does pay for.

The newspapers need to hire the RIAA lawyers and force people to pay. Its called doing business the old fashoned way - to make money. (Just like Craigslist does.)

Heh. Ok. I see, you were joking.
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Anonymous Coward, 9 Jun 2009 @ 11:50am

Re: Re: Re: Re:
Are you stupid enough to buy from spam? Are you stupid enough to give your credit card info to a random site?

Enough people are.
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Michael, 10 Jun 2009 @ 7:02am

Don't Compete - Cooperate
Does anyone know of any newpaper that DIRECT links print classified ads to additional information on craiglist, or any other online ad site? Newspapers can offer a hybrid solution to advertisers that online alone can't match. Just think how mauch time (and gas) has been saved by potential buyers not having to travel across town to view some sellers idea of "great condition." Offline print ads can initiate interest, online content is where rubber meets the road.
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oldnavy84, 11 Jun 2009 @ 5:08am

Re: Charging Ahead
"The first home permanent kits sold in the 1960's were about $.50 they did not sell. They pulled them for 6 months and put them back at a much higher price of like $3.00+ and they sold out from then on."

On the other hand, that was still much cheaper than getting a perm at a shop, i.e. added value.
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oldnavy84, 11 Jun 2009 @ 5:13am

I've just finished developing my new business plan. I'm going to "Establish that my pocket lint has value by charging for it". I'll corner the pocket lint market. Forbes magazine here I come.
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The Mad Hatter (profile), 12 Jun 2009 @ 8:32pm

Yep, suicide
If there's a problem with your business model, fighting to retain a business model that doesn't work indicates that you are divorced from reality, and rather than firing you, you should be placed on medical leave, and ordered to get psychiatric help. I'm saying this, because I would expect that to reach a leadership position like that, a certain amount of intelligence is required, so these people can't be stupid.

It's too bad. If they had the cuts to design a new business model, they'd be heros. Instead they will look like incompetents.
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