Dear Newspapers: Focus On Enabling Your Community; Not Whining About Who Owes You Money

from the trying-this-again dept

There have been a whole series of stories lately, often from newspaper industry insiders, bemoaning the sorry state of their industry. Obviously, we've been seeing (and pointing to) similar stories for a few years now, but their pace has accelerated in the last few months -- with a pretty clear trend: blame others for the newspaper industry ills (the internet! Google! Craiglist! those darn kids! etc.), and then work out some totally hypothetical model that will somehow force someone else to pay, rather than give people a reason to buy. This distinction is pretty important.

Take, for example, this column by Gary Storch, explaining why newspapers need to start charging online. Media mogul Steven Brill is also arguing the same thing (which is doubly amusing since Brill tried and failed to get people to pay for content online). I won't go through the long list of arguments of why that's silly (that's been done before), but just note that the focus is on "newspapers need to charge," and not on "what can we provide that someone's willing to pay for." That's rather important, because it's pretty clear that just charging for news won't get enough people to pay. Next up, is Peter Orsig's rather confused demand that Google rescue newspapers (again, not a new idea by any means). That column had numerous factual problems -- torn to shreds nicely by both Mark Potts and Mathew Ingram. Again, though, the issue is that the focus is on just getting someone else (Google, instead of readers this time) to hand over money, rather than figuring out a way to improve their product in a way that anyone would choose willingly to give them money.

This theme seems to run through much of the discussion around newspapers and business models. Even as they're doing a better and job attracting an online audience, you almost never hear of newspapers looking for ways to better serve that community in a manner that offers up things they want to pay for. Instead, it's all about coming up with ways to demand money, as if it's something they're owed. They're not, and they're discovering that day by day, even if they're unwilling to admit it.

It's time for newspapers to start looking at ways they can add value and give someone, whether individuals, sponsors or others, a good reason to give them money. So far they're failing, and a big part why is that they still view their readers as an "audience" rather than a community. That's why they do little to enable that community to do more, instead focusing on passing down the word from on high. That's not how communities work, and the end result is the mess that so many newspapers are facing today.

Filed Under: business models, communities, newspapers

Newspapers Buy Ads To Talk About How Great Newspapers Are

from the you're-doing-it-wrong dept

It's no secret that the newspaper business has been going through a rocky patch lately, and hasn't done a very good job coping with a changing marketplace. However, it does seem a bit odd to respond to that, not necessarily with new business models, but with an advertising campaign about how great newspapers are. Specifically, they put out an ad this week to claim that more people read newspapers than watched the Superbowl. As Jeff Nolan notes at the link above, that's missing the point. Nobody denies that people read newspapers. The problem is that newspapers haven't been able to figure out how to effectively build a new, sustainable business model around that community (and, if you want to understand part of the problem, it's that they're still focused on "people" and not "community.")

Filed Under: newspapers

Newspapers Are Not The Only Source Of Journalism

from the a-little-reminder dept

The NY Times has an interesting article looking at the concept of endowed newspapers, with the idea being that, if you could build an endowment for a newspaper, such that it doesn't need to focus on a business model, it would get us past this whole "newspapers are failing" issue. The idea is that they would be set up like universities, as 501(c)(3) nonprofits, and with a large enough endowment, they wouldn't have to worry about business models anymore. As the article notes, a newspaper like the NY Times could survive on a $5 billion endowment -- which really isn't that much money. Of course, this isn't a new idea at all, and has been talked about for over a century, with plenty of critics pointing out why it would never work all that well.

That said, even if the idea has some merit, what bothers me about the NY Times piece is that it seems to fall back on the assumption that journalism equals newspapers. It starts off with the Jefferson quote: "were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate to prefer the latter" and proceeds to point out that we may be heading towards the former. Of course, that's not accurate. What Jefferson really meant was not "newspapers" but journalism. He used the term newspapers because that was the only outlet for journalists of the time. However, these days, that's no longer true. There are many different media types where journalists exist -- from newspapers to radio to television to the internet. So, the crisis in newspapers is not a crisis in journalism, and acting as if it is distorts the debate.

Filed Under: endowment, journalism, newspapers

Google Finally Gives Up Trying To Sell Ads In Newspapers

from the what-was-the-advantage? dept

We were somewhat skeptical of what kind of advantage Google could provide to selling ads in physical publications (initially magazines) when the program launched in 2005. At best, we thought that the relationship with advertisers could maybe bring in some advertisers who didn't traditionally advertise in print. But, there was no way to provide the customization and contextualization that made Google's ad programs online so effective. And, indeed, the original program was something of a failure. The company then took a second shot, which seemed to get a lukewarm thumbs up from some newspapers, but it was hardly a rousing success.

And, indeed, the company has now admitted that they're killing off the program -- which seems unlikely to be missed. There's certainly nothing wrong with experimenting with new business models and ideas, but it was never really clear what true advantage Google provided in this space, and the shut down pretty much confirms that the answer was that there wasn't much of an advantage.

Filed Under: ads, newspapers
Companies: google

Newspapers Again Thinking About Micropayments

from the won't-work dept

There's been a lot of hand-wringing in the paper journalism world lately about business models, so it's no surprise that bad ideas for business models are springing up again. Specifically, some are beginning to wonder if micropayments could work. As Clay Shirky notes in the article, any time people bring up micropayments as a solution, it's a hail mary pass -- a last ditch effort by someone who has no other ideas. Now, every time we bring up micropayments, we get some pushback, but no micropayment system has ever been shown to consistently work on a large scale -- especially when it comes to news. People will. undoubtedly point to iTunes or even the iPhone app store as micropayment examples to the contrary, but both of those pale when compared to free music and free apps in terms of volume -- and considering the business models we've seen adopted that don't rely on those sorts of payment structures it's difficult to believe that such systems will really be dominant over the long haul. They work in the short term, mainly due to the convenience factor -- but they're a stop gap -- not a true strategy to deal with digital economics. Micropayments add in an element of unnecessary friction -- which represents an economic inefficiency. They may work for some time, but eventually someone comes up with better business models that get rid of that inefficiency.

Filed Under: mental transaction costs, micropayments, newspapers

Connecticut Government Bails Out Newspapers

from the will-it-impact-coverage? dept

A few readers have sent in the news that Connecticut lawmakers have stepped in to save two newspapers in the state, that were about to be shut down. This is raising all sorts of questions about the separation of government from the press. What's scary is that just a few years ago, such an idea was used as satire. Then it became a serious suggestion and now it's happening. Of course, the big question is about how this will impact coverage. It is possible for the government to own a newspaper and still have that newspaper report critically on that government... but it's definitely harder, and a lot of people may wonder about how closely the papers will monitor government officials.

Filed Under: bailout, connecticut, government, newspapers

Yet Another High School Newspaper Goes Online To Avoid District Censorship

from the control-is-a-funny-thing... dept

This is hardly the first time we've seen high school administrators try to censor the student newspaper because they were upset about article -- only to find the students simply moved over to the web and were able to get their message out to a much wider audience. The latest, coming to us via Romenesko, involves a student newspaper in Faribault, Minnesota. The superintendent got upset that the students wouldn't share the results of an investigative report before publishing it, and so he shut down the newspaper completely.

Without skipping a beat, the students set up shop online, entirely independent from the school (they even got a site that hosts student newspapers to give them free hosting). They'll continue to publish, but without support from the school (though, the teacher who was an adviser to the paper, will continue to informally advise the team). Basically, the students are realizing what plenty of others have discovered in the past: it's tough to shut people up these days, now that there's a big internet out there. The superintendent who shut them down doesn't seem to mind much either, saying: "It's well within their right. Any group of students could put together a website like that. That's the way life is in this electronic age." Of course, if that's the case, why did he bother shutting down the paper in the first place?

Filed Under: high school newspapers, newspapers

Creative Destruction Happens Quickly; Those Who Wait End Up In The Rubble

from the just-a-warning dept

When we talk about the economics of industries that are in transition, such as the newspaper industry or the entertainment industry, we often point out the need to adopt new business models that embrace the economic realities those industries face. Regularly, supporters of those industries respond that it's folly to jump to a new "unproven" business model without real proof that the new business model will succeed -- especially when the old business model is still going strong. There's this belief that the companies in those industries can just hang on while everyone else experiments, and when a new business model is clear, they can comfortably make the switch and everything will be fine. And, it is true, that even disintermediated businesses have a history of sticking around and throwing off cash for a long time after the disruptive technology disintegrates their foundations.

Yet, as this article in The Atlantic points out with regard to the newspaper industry, when "the end" comes, it comes amazingly fast. It is true that old industries can hang on for a while, but they reach a sort of tipping point where suddenly everyone realizes that the emperor has no clothes. And, at that point, there really isn't any time to make the necessary shift to the new business model. Instead, there's just bankruptcy. So, sure, the record labels and the newspapers can wait it out and hang on until there's "proof" that some new business model makes sense. But, by the time that proof is there, their old business might not be.

Filed Under: creative destruction, economics, entertainment industry, newspapers, speed

Taxing ISPs To Fund Newspapers?

from the *sigh* dept

In trying to explain why a music tax is a bad idea, I pointed out that if you start with music, you quickly have to start adding pretty much every industry disrupted by the internet. The obvious one is movies, but what about newspapers? They're struggling due to the internet, so why can't they demand an ISP tax to support newspapers? The idea, of course, is that this was a ludicrous suggestion... but apparently some people have thought seriously about it. Reader Emmet Gibney points us to a blog post on the Macleans site (the same magazine that once told us that the internet and blogging sucked) where the concept of taxing ISPs to pay for online media publications is apparently seriously suggested. It appears to be an adjustment on the already ridiculous suggestion that some folks have made that newspapers should collude to charge for access to newspaper websites. At least the Macleans author recognizes this is unworkable... so, rather than looking at alternative models, he suggests that "the only solution" he sees is to create a "royalties" system that ISPs would be in charge of collecting for media publications. Who's next? Did the buggy whip makers ever suggest a "buggy whip tax" on automobiles?

Filed Under: content tax, isps, newspapers

The Stick Your Head In The Sand Approach To Saving The Newspaper Business

from the cluelessness-abounds dept

Over the past few years, as the newspaper business got in deeper and deeper trouble, we seemed to increasingly hear some particularly clueless suggestions on how newspapers should save themselves -- almost always revolving around some sort of backwards effort to put the genie back in the bottle, such as by all banding together, violating all sorts of anti-trust rules and colluding to charge for content. Of course, this also ignores basic economic reality on how people view information and news. It also, falsely, assumes that newspapers are the only source for news, and that in stupidly taking themselves out of the market, upstart competitors won't fill the void.

Yet, it seems there's no shortage of silly suggestions along those lines. Mathew Ingram recently pointed to two such examples, with the San Francisco Chronicle publishing journalism professor Joel Brinkley's unoriginal suggestion that newspapers openly collude to start charging and the NY Times' David Carr's misleading profile of a tiny newspaper that has "thrived" by "ignoring the web."

Along those lines, a few people have submitted a rant by another old school newspaper guy, saying that the internet is the "cause" of all of the newspaper industry's woes, and that things would have been fine if all newspapers had simply stayed off the internet entirely. Now, obviously, these are journalists, rather than economists, but anyone with even the most basic understanding of economic principles or just the basic history of markets and innovation would know what happens to companies that ignore how a market is changing. The buggy whip makers didn't thrive by ignoring the automobile industry. They went out of business.

The newspaper industry won't be saved by putting its collective head in the sand (or by agreeing to some anti-competitive price fixing.) The newspaper industry will be saved by finally realizing that their "product" is their community of readers, and that anything they do to serve that community better is the future, not by clinging to a past when there was no real competition.

Filed Under: business models, newspapers