Thursday, October 21, 2010

Embracing a new technology

Calls for a new business model are frequent for the legacy newspaper industry. The reasons are apparent. The Newspaper Association of America reports that newspaper print ad revenue is down 44.2% from 2005. The Pew Research Center says "Internet overtakes newspapers as news outlet."  

If a new model is necessary, let’s first consider a definition of the legacy newspaper business model. What are the key activities and benefits that are unique to newspapers? Whom do newspapers serve?

Newspaper's key activities and benefits can be described as (1) gathering and relaying original facts and figures in a timely fashion (2) employing reporters who work long and non-standard hours to do so (3) employing sales representatives to build alliances with businesses that wish to get their facts and figures in front of the news audience and (4) offering readers the benefit of the most reliable, trusted, impartial, in-depth and insightful reports and analysis about life in geographic places.

So, what’s wrong with this model? Why the newspaper advertising and readership declines?

The Internet!

The Internet turned information flow 180 degrees. Before the Internet, capital, presses and lengthy processes were required to get information to the people. Facts and figures were gathered and published in print on fixed schedules -- taking world news to the neighborhood. Now, a teenager with a flip-camera can report an event and make it instantly accessible to anyone --taking neighborhood news to the world. No one has to pay the teenager.  No presses are required. The report is good enough for the moment.

The Internet also has turned advertising flow 180 degrees. Until the Internet, small numbers of big businesses dominated. With Internet, large numbers of Main Street businesses compete.

Print is a medium open to organizations, information flows one-to-many, from top to bottom; and is closed and paid.

The Internet is a medium open to individuals; information flows one to one, one to many and many to many; from bottom to top; and is open and free.  Diametrically opposite from print.

John Paton, CEO of Journal Register Co. opened the June, 2010 Editor & Publisher's Interactive Media Conference in Las Vegas, NV urging those in attendance to "put down their acoustic guitars and pick up the electrics. Now." His presentation, "Digital First, Print Last, Resetting the Newspaper Business Model", offered an example of the diametrically opposite environment the Internet has created. 

Can any part of the legacy newspaper business model work? It all can.  There will be a continuing demand for reliable and impartial news gathering and news reporting, for providing an advertising venue, and for the publishing of reports about matters important to every-day life.  The Internet will just allow us to do more of this and to do it better than we can with print alone.  

Adopting digital first, print-last, as Paton suggests, does not require news organizations to abandon its key activities or its time-honored benefits. The digital age provides the opportunity to make some stories available as they happen and others on a periodic schedule. This is a process change not a model change.

James Fallows, in the June 2010 edition of The Atlantic, describes an experiment at Google called Living Stories. This experiment is based on the understanding that while a teenager with a flip-phone relaying impressions from a protest might be the first source of news of the event, a news organization with hired reporters and editors will still be necessary to put such an event into context and to explain its history and implications for the future. 

News organizations can adapt their time-honored and proven business model to build upon these new sources of information. Sustainable news organizations will be those who adopt a bottom-up flow of information.  News happens in population centers of 20,000 to 40,000 or even smaller.  Reporters will be on the ground in these centers. Sales people will build alliances with the Main Street businesses in clusters of two to four of these centers and the organization will brand two distinct products, a periodic publication and an immediate publication.

For now, the sustainable organization’s periodic publication, probably weekly, will appear printed on paper. In the not-too-distant future, it will appear a pad-device. This publication will feature stories that provide context, analysis, prose, poetry and features by and about the people in their geographic place. It will look more like a magazine than a newspaper.  The few, but larger-scale advertisers will power these publications.

The sustainable organization’s immediate publication will be open, free, dynamic and always on. It will appear on mobile platforms populated with posts from the organization’s professional journalists along with attributed, unfiltered, and unfettered posts from community citizens, organizations and businesses. My company calls this the Digital Main Street™. This is where the news organization will publish, as it happens, the professional journalist’s first report of the school board meeting vote, the citizen’s report from an accident scene and the community theater group and corner market offerings and advice.  The plentiful, smaller-scale advertisers will power these publications.

Expanding the brand to two products, embracing contributions from all community members, encircling the instant capabilities of digital devices and extending alliances beyond the real estate, auto and major financial and retail players is not a new model. It is simply a model which embraces a new technology to do faster, better and more cheaply what the legacy business model has always produced.

Friday, October 8, 2010

Will Newspapers die?

That is the question we are all asking. Since 1997, my money and efforts have focused on a vision where the answer to this question is "Yes, newspapers as we know them today will die."

When I searched “newspapers, die, death” on Google, I found thousands of articles, including some going back to 1995 , a Newspaper Death Watch website, a link to the The New Yorker, and an interview with Warren Buffet.

While these links are referencing national, regional and metro dailies, the question is equally important for those newspapers serving hyper-local markets, markets of 20,000 to 30,000 people in urban neighborhoods, suburban villages and ex-urban towns.

In these small markets, I've concluded that the daily newspaper will die. Not tomorrow, but sooner rather than later. However, the news organizations publishing these hyper-local daily papers do not have to die. A collection of non-daily publications along with related online offerings can sustain them.

And these printed-on-paper, non-daily publications, might last a decade, a century or into perpetuity. I am confident the need they meet will continue, possibly delivered on some future digital device other than paper.

I think people seek information with two different mind-sets. These two mind-sets exist in all of us -- young and old, techie and luddite, urban and exurban. I call one mindset “timely search”, and the other, “leisurely discover.” When in timely search mode, we lean forward, narrow our focus and are annoyed by interruptions. When in leisurely discover mode, we sit back, open ourselves to new thoughts and little is considered an interruption.

Two different information formats are necessary to serve these two mind-sets. I call one format “list”, served best by Internet and the other format I call “display” served best by print. The news organizations surviving in the future will be those who recognize and create two different products tailored to these two mindsets.

The timely search mindset is operative when we seek answers to specific questions. "How do I spell luddite?" "Where is Taos?" "What's the best flight to Boone?" "Where was that fire engine going at 2:00 AM?" I call this "who, what, where" information. This information is specific to an individual with a unique need or interest at a unique moment in time. The Internet list has stolen this role from the print display.

The leisurely discover mindset is operative when we seek enlightenment and entertainment.  "I could not have imagined landing in those conditions." I appreciate the difficulty those parents are having caring for their child injured in last week’s game ". This information is specific to a group, with a common interest, across a period of time. Print display can retain this role. It is better suited to serving it than Internet list. 

The news organizations of tomorrow will be those with online platforms with answers to all questions about life in their community. These will not be places where only professional journalists hold forth. Citizens, businesses and organizations all have answers to offer and need to be integrated and given distinct but equal stature. Sustaining news organizations will host a virtual space that replicates real space. I call it the Digital Main Street™. And just as those with economic motives for being on the Main Street of physical space pay landlords to be there, so too will they pay news organizations to post their news and offers where the community is gathering in virtual space.

So where does that leave the newspaper? If everyone is getting timely answers online, why buy a paper?

Print can remain pertinent by transforming to match the evolving mindset of the reader. No longer are print readers going to be seeking who, what, where. They will have already gotten that from Internet. The newspaper of tomorrow must become more about discovering the richness of the place readers live and no longer about learning who, what, where. The paper will be where readers are engaged in answers to questions they did not have. It will become the place for leisurely consideration by those whose common interest is the place they call home. The paper is where they will be provided content focused on context, analysis, prose, poetry and features by and about the people in their special geographic place.

The printed display format of today's newspapers and magazines best serve the discovery mindset. It lets the reader browse across an array of visual and textual information, go forwards or backwards, start at the back, middle or front, jump around from place to place, discover unexpected insights and pleasures. And it is this discovery process that makes newspaper and magazine advertising so valuable to advertisers. In discovery mindset, the reader is receptive to the lure of attractive and inviting display ads.

Again, the display format may be on a digital device rather than paper, but the format will be retained. It allows the user to scan across attractively laid out collections of information, inviting them to browse and discover enlightenment. So, yes newspapers might die, but the display format will not.

In summary, the news organizations of the future will be focused on meeting two mindsets and the newspaper as we know it today will die. News organizations will have one product to deliver answers to questions in list format to those in search mindset. They will have another product to deliver unexpected insights and pleasures in display format to those in discover mindset. Digital delivery is already the default choice for the search mindset; print on paper our an evolving digital pad will be the choice for the discover mindset.