Is It Possible For Newspapers To Save Themselves?

from the sure-it-is dept

Thu, Sep 17th 2009 8:04pm — Mike Masnick

Joshua-Michele Ross is suggesting that people suggesting new business models for newspapers should give it up, because newspaper companies are simply unable to adapt:

Because the news industry doesn't suffer from a shortage of ideas or possible revenue models, it suffers from a different but more acute malady: being an institution during a time of disruptive change.

While we have all been busy telling the newspaper institution what they should do differently we have missed one big point: Institutions are structured to precisely NOT do much of anything different.

I have to say, I don't find this convincing. While I think it's true that most newspapers won't do enough to change and will face more trouble because of it, claiming that they cannot change is questionable. Yes, it's quite difficult for companies in an industry being disrupted to make that shift, but there are cases where companies do make the shift. Intel switched from a memory business to a processor business. IBM has pretty much made the shift from a big tech company to a services company. Nokia used to make rubber boots. Companies with good and visionary management (and a healthy appetite for taking some big risks) can make, and have made, tectonic shifts. Yes, it's true that most don't do this, it does not mean that it's impossible. Claiming that they're structured not to make the change isn't true. They do have legacy issues, but it doesn't mean they can't make a big move to fix that.

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Filed Under: adapting, change, institutions, journalism, newspapers

21 Comments

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Yohann, 17 Sep 2009 @ 8:31pm

I dunno
"Yes, it's quite difficult for companies in an industry being disrupted to make that shift, but there are cases where companies do make the shift. Intel switched from a memory business to a processor business. IBM has pretty much made the shift from a big tech company to a services company. Nokia used to make rubber boots."

I dunno. Your examples made those shifts when technology was in its infancy. Computers were the next new thing and those markets were exploding with new and innovative ideas. News organizations have been around for a very long time. At this time, the market is still pretty far down, but suggesting newspapers switch over to an entirely different market and cease to become news carriers is asking a bit much.

News won't really ever skyrocket like computers and technology did. News can only ride the next big story to come along until people lose interest or another bigger story needs to be covered. They have a quick up-and-down from story to story, rather than a straight up-shoot.
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MG, 17 Sep 2009 @ 8:39pm

a holy mission
I agree it's possible for big institutions to change but newspapers have some interesting differences from most companies. For instance, most reporters and writers went to college specifically for journalism and have been told their whole educational career that they are on a mission to protect the unwitting public from the forces of powerful governments and big business. This in itself isn't too bad but it encourages the idea that the newspapers are entitled to the public's money as fair payment for their public service.
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Yohann, 17 Sep 2009 @ 8:45pm

Re: a holy mission
Actually, reading your post, I just had an epiphany. What if newspapers were to basically 'become' the next Google? Google, to me, is covering a LOT of bases, but what if someone were to wake up, turn on their computer, and log into something like facebook or google with all of the news on the pages tailored to exactly what they want? Advertising could pay for it. Users who log into the news site would be the 'fans'. They would have access to historical articles. It's all contained within. A user could tailor the site to their liking, just like Google can do. If you want to pass a few articles to a friend who is also on there, or bookmark articles for research later, that option could be available.

Of course, that's taking into account that a newspaper would have the technological foresight *and* the initiative to set something like that up.
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fogbugzd, 17 Sep 2009 @ 9:06pm

Kodak
Businesses should look at what Kodak did. Their business was based on film and film processing. Digital cameras were obviously going to change things. Kodak didn't go to congress to get laws passed outlawing digital photograph, or ask that a tax be placed on digital cameras to be paid to film processors. They got ahead of the market as much as they could, and when the digital camera revolution really hit they had lines of digital cameras and printers that emphasized printing photographs. They went from being the industry leader to one company among many competing for customer loyalty, but they survived. As it has turned out, the digital camera market is competitive, and vendors keep coming out with better and better cameras at lower and lower prices.
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fogbugzd, 17 Sep 2009 @ 9:10pm

No one else is going to save the newspapers
One thing is for sure. No one is going to save the newspapers but the newspapers.

Sure, they might get Google to pay them off for a while, but that will only delay the inevitable. They might get some protective laws passed in Congress, but that, too will only delay the drive of the market. Most likely, any law they get passed, or any arrangement they get with search engines is probably going to restrict them from making changes that they really need to make.
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Anonymous Coward, 17 Sep 2009 @ 9:38pm

No
Their market gap has closed, along with the entire business model of "publishing". Everyone wants to pretend there's some idea that will save this model, just to keep it's death throes from making a mess of everything else but let's get over it and let it die it's natural death.

They can fight and whine all they want. I'm sure people on the Titanic did the same thing. Maybe their downfall will make for a good movie some day. But most assuredly, that movie won't be consumed as a series of rapidly flickering 2D images projected on a wall in a dark room with a bunch of strangers at $10 a head.

Let. It. Go.
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young old man, 17 Sep 2009 @ 9:54pm

Uh, you mean History papers, right?
Aside from lining our canary cage bottoms, what do we need a news paper for anyway?
The net is the way to get NEWs. The paper is the way to read history.
Shamefully, most papers today have a decidedly liberal slant, perhaps that is why they are dying as well.
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Anonymous Coward, 17 Sep 2009 @ 11:40pm

Re: Re: a holy mission
Take that a bit further. Google IS the successor to the newspaper industry. Revenues derived from advertising? Check. Reporting news (of others, not just syndicates but bloggers, other sources). Check.

If anything, Google beat the news companies to the punch in delivering content the way users want to see it.
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Anonymous Coward, 17 Sep 2009 @ 11:42pm

Re: Uh, you mean History papers, right?
liberal slant was likely part of what made the medium popular in the first place - something different from a more common, conservative environment. You might be on to something with a cultural shift back to conservatist ways.
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Vadim, 18 Sep 2009 @ 12:40am

Imagine a teleporting device
Imagine invention of a teleporting device.
Transport industry will go dead.
Internet IS a teleporting device for all information including NEWS.
So newspaper industry will die....
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Anonymous Coward, 18 Sep 2009 @ 1:01am

Organizational change
I'll have to agree with Joshua-Michele Ross here. I happen to be working for a major newspaper (major in Sweden that is) and my bachelor thesis from this spring covered (among other topics) organizations in the network economy.

Newspapers are big, really big. They cost a lot of money to operate. There are very old people that are resistant to change. And ad revenues is the most important thing. I don't see this newspaper adapting an entirely new business model, fire 80% of its staff and get a smaller office: They will die instead.

I believe you CAN make money by covering/analyzing news, but not in the context of a big ol' newspaper.
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mark_crummett (profile), 18 Sep 2009 @ 1:45am

change-resistant
I used to work for a medium-size AM/PM daily newspaper on the east coast, and I've never seen any organization more resistant to change. From the guy at the reception desk up to the publisher, it was almost impossible to get even the smallest change implemented. I have no doubt that they will crash and burn, scratching their heads and wondering why.
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Griff (profile), 18 Sep 2009 @ 3:22am

The Institution is the problem
Mike, I think the fella has it bang on.

We used to choose newspaper to read because we liked it's basic editorial slant - it suited our views and opinions.

Now we can choose an aggregator (say HuffPo or similar) and that becomes the news "brand" we identify with.
What defines that brand is a small group of editors, and possibly a group of favoured writers. Every other activity in the chain could be freelancers. An open market of content from which the aggregator selects.

So where does this leave (for example) the NY Times ? They contract down to a website and few good editors, and maybe even keep some of their best best writers on a retainer rather than completely freelance via aggregation. What remains is still recognisably the NY Times "slant" on everything, but they are no longer this vast organisation with huge shiny offices turning over giant amounts of money with a printing works and their own fleet of trucks.

"Survival" for them can mean different things to different people. If it means staying the same size, they can't. It it means that you or I could still choose to read what is in essence the NY Times each morning (in some form using some kind of media) then it could, but there would be little in this new incarnation from a business point of view to interest the current stakeholders in the existing (dying) business. To all intents and purposes their business has folded.

But sooner or later for an ad driven business model to work, the aggregator sites (eg Huff Po) will have to share their ad revenue with those they link to and actually display the content themselves, rather than send their readers off to someone else's ad driven website everytime they click a link. (If you read your fave paper you want consistent layout all through, not something that looks like a scrapbook made of a myriad of other DTP styles).

That means that even if the user experience is free, there will almost certainly be some B2B micropayment going on behind the scenes. And done well (eg by google) this will be a genuine live free market.

I know many people believe micropayment for the end user is a no no, but if people are given a choice between paying tiny amounts and having it free with ads, there are some platforms (eg mobile) where there is simply not enough screen real estate or user time to bother with ads.
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SImon, 18 Sep 2009 @ 4:28am

Re: Re: a holy mission
They were actually the original Craigslist, but were unwilling / unable to move with the times and let someone else come in and eat their lunch.
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chris (profile), 18 Sep 2009 @ 7:58am

Re: Re: a holy mission
What if newspapers were to basically 'become' the next Google?

too little, too late. google has had several years of being google to become really good at being google.

if every newspaper started the process this afternoon and poured all of their combined resources into the effort, it would be years before they had a fraction of what google has.

google figured out how to make advertising pay for their entire enterprise. big newspapers have all of these legacy problems that aren't going to go away. there isn't enough ad and subscription revenue to produce news AND service debts. maybe some independent papers have more financial freedom, but for big corporate newspapers, there just isn't enough money to be made to continue.

to be honest, failure is probably the only way that newspapers can succeed in transforming.

the old news corporations have to go under and take their debts with them, thereby freeing the people of the newspaper industry to start new corporations that have no legacy problems. these new startups will have more freedom to redefine the market for news.
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Anonymous Coward, 18 Sep 2009 @ 8:24am

It is in the medium the advertisers are using
Google is and advertising company first. They just happen to use their own products to help deliver their ads.

Yeah make google maps with no adds, but sell a premium version even at a loss to grain brand exposure. The more people know you and use your service the more people you can deliver ads to.

Newspapers are basically advertisers too. They just happen to use the paper as a medium to deliver the ad content.

The internet is growing and the paper circulation is decreasing... so it does not take a really bright person to see that when your business is to sell ads and medium is shrinking you need to adapt.

I have no clue as to how they can adapt and if I did I am sure I would be able to make millions instead of spending my time reading Techdirt.
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VI, 18 Sep 2009 @ 9:39am

The Institution is the just the beginning of the problem
When I read Griff's response, it made me think:

[Griff:]" "Survival" for them can mean different things to different people. If it means staying the same size, they can't. It it means that you or I could still choose to read what is in essence the NY Times each morning (in some form using some kind of media) then it could, but there would be little in this new incarnation from a business point of view to interest the current stakeholders in the existing (dying) business. To all intents and purposes their business has folded...."

The REAL signal that these institutional companies are flashing at us is that CITIES, which rely on high-density, high cashflow companies to pay big rents and build big buildings to house the large number of employees, will start to crumble. The first example of this has to be Detroit. I think that within the next 25 years, New York City and the other monolithic cities around the country and world, will have to rethink who/what they are.

What do you all think?
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Ben, 19 Sep 2009 @ 1:51pm

Nokia
Dude, Nokia boots would kick ass and should be the official Rubber Boots of James Bond, complete with water/dust proof built in phone.
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Mark Evans, 20 Sep 2009 @ 5:32am

Newspapers
I'm probably in the minority but I think the big challenge facing newspapers is figuring how to get people to pay for online content, particularly content that isn't a commodity that consumers can find in multiple places. It seems simply unsustainable for high-value content to remain free, which is why there is a future for paywalls in some way, shape or form.

Mark
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Jeff Sonderman, 20 Sep 2009 @ 7:50am

Re: Newspapers
Mark,
But what is "valuable content" that a newspaper could force someone to pay for? I think you're assuming too much value in commodity news.
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Allan Masri (profile), 21 Sep 2009 @ 7:56am

Institutions can't change, you're right
Institutions find it hard to change because everyone in the company knows how to make a profit using the same old practices, and no one in the company knows anything else. Newspapers had the opportunity to become Craigslist, but Craigslist has revenues in the $250 million range. The New York Times has revenues in the $3 billion range, and Craigslist has the lion's share of classified ads for the entire US. Google has a large workforce of skilled software engineers and online marketers. Newspapers have workforces of journalists. When Intel and IBM made big shifts in their business models, they were successful because they did not need to hire new technologists, only retrain the ones they had. A better paradigm is what happened to Time/Warner and AOL. AOL was a leading exponent of the internet. TW acquired it to use its expertise in making changes to their business model. The resulting company did little except milk AOL for profits and then throw the company away, precisely because TW executives had no understanding or respect for the new technologies. Newspapers are fated to die by their nature in a world that has passed them by.
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