Humbling Experiences - Becoming Relevant

"Life is a long lesson in humility"   James M Barrie

Sailing quietly off our mooring, headed for Pulpit Harbor Saturday afternoon, I learned a well-kept secret about Camden Harbor. There is a ledge tucked among six moored boats northeast of Curtis Island. Yes, there is a green can to the east marking an area to be avoided, but a patch of water full of moored boats does not suggest danger. I know differently now.

I called the Camden harbormaster on Channel 16. Jim Leo came out, assessed the situation and advised my wife, Kathrin, and me to sit atop the ledge and wait for the rising tide to float us off, rather than getting dragged back into open water and risk ripping the hull. We heeded his advice, and 90 minutes later we sailed out to our rendezvous with friends Chris and Charlotte Beebe in Pulpit Harbor.

While waiting for what seemed to be a long tide-change, I thought about another humbling experience – our inability to keep our printed newspapers relevant to all our citizenry. I know we are not alone. Around the globe, the decline of readership of printed professional journalism is startling. I am humbled. I should be able to figure this out.

In our case, it seems that our success serving more than 150,000 unique monthly visitors on our online Digital Main Street in Knox and Waldo counties has created a perception for a growing number of folks that there is no need to pick up our printed products. With 150,000 unique visitors in a community of 80,000 we know we are delivering relevant content. And we are doing so not just for those who live here, but to folks worldwide who are connected to our area through family and friends or because they visit here and want to keep up with what's happening.

The popularity of our bizMember program, with more than 400 local businesses using our platform to provide timely answers to their clients, is further evidence that we are relevant. These anchors of our local economy see that the news they post is viewed 200 to sometimes 1,000 times and they tell us about the increased traffic across their thresholds.

All of us will continue to read printed matter. It serves a valuable purpose, different from online. Print provides what I call leisurely treats, for the young and the old. Print allows news, features, analysis, opinion and ads to be displayed in a way that invites the reader to discover. This is why print advertising, the historic and future subsidizer of professional journalism, is so effective. Print uses compelling graphics and words to invite the leisurely reader to discover the value of our advertisers' products and to imagine a future with them.

Online serves the person seeking timely answers. The Internet has made timely answers available on demand, 24/7, clean and simple. No need for fancy graphics to attract attention. When seeking a vote outcome, game score, details of a tragedy or celebration, a specific house, a favorite food, an entertaining experience or a special piece of clothing, we all head directly online to find it. But we are not always on task and are always potential consumers. It is during our moments of leisurely reflection that we are moved from potential to actual. Print has and still serves us at these times.

A second compelling reason to continue to read printed matter is evidenced by anecdotal evidence from Jack Shafer, former Slate Magazine media critic and current Reuters columnist. Shafer described his experience dropping his annual $640 New York Times print subscription and then resubscribing a year later.

Shafer said: “What I really found myself missing was the news. Even though I spent ample time clicking through the Times website and the Reader, I quickly determined that I wasn't recalling as much of the newspaper as I should be. Going electronic had punished my powers of retention. I also noticed that I was unintentionally ignoring a slew of worthy stories.”

He said: “My anecdotal findings about print's superiority were seconded earlier this month by an academic study presented at the annual meeting of the Association for Education in Journalism and Mass Communication.”

I downloaded the study to which Shafer referred — "Medium Matters: Newsreaders' Recall and Engagement With Online and Print Newspapers" written by Arthur D. Santana, Randall Livingstone, and Yoon Cho of the University of Oregon. The study asked questions of two groups, each comprising approximately 22 individuals. One group had perused the printed New York Times, the other had browsed the paper’s accompanying website.

Both groups answered questions on the extent to which the news stories made an impression. The study showed that print newsreaders remembered significantly more topics than online newsreaders and recalled more main points.

The research suggests that online readers tend to scan stories while print readers are more methodical in their reading. Also, newspapers offer news stories with more depth than online stories. Further explanations relate to the scattershot nature of the online news story coupled with its fleeting nature. These facts indicate that the online news consumer’s experience is quite different than that of the print consumer's experience. New York Times best-selling author Nicholas Carr reflects on the work of Marshall McLuhan in the 1960s, pointing out that the Internet not only supplies the stuff of thought but it also shapes the process of thought.

Carr says, “And what the Net seems to be doing is chipping away at my capacity for concentration and contemplation.”

A common explanation for lack of impression of online news relates to the lack of salient cues, such as story placement and prominence which guide the reader in print.

This research suggests that our print product, to remain relevant, must move beyond being a primary source of timely answers and become a source of leisurely treats. Our Digital Main Street is serving you well in this regard. Yet we need relevant print products to sustain our journalists digging for the timely answers we provide online. These products will move beyond timely answers and feed the curiosity and openness to discovery in all of us. We are dedicated to developing these products. They will be focused on niches of curiosity. They will each be published less frequently so that we can take the time to compose and display compelling leisurely treats. And our advertisers will want to be there providing you with their versions of the same.

Analog dollars to digital dimes

This is the first of a series of brief columns I am writing for four newspapers I own in Midcoast Maine. I am trying to keep our readers abreast of what we are doing and where we are going at The Bar Harbor Times, Capital Weekly, The Herald Gazette, The Republican Journal and their related VillageSoup web sites.

Rockland —The Internet is continually disrupting old marketing and communication practices across society. Every business -- from real estate and travel agencies to lodging owners and financial advisers -- must adjust to establish new relevance in light of their client’s access to information they previously controlled.

The newspaper industry has been profoundly affected by this wide-open access to timely answers once controlled by newspapers, when that information existed only in print. Clay Shiky, an American writer, consultant and teacher on the social and economic effects of Internet technologies, describes the impact of this new access as a matter of newspaper publishers having to trade analog dollars for digital dimes. He says, “Digital revenue per head is not replacing lost print revenue and, barring some astonishment in the advertising market, it never will."

Village NetMedia with its four newspapers and VillageSoup are actively experimenting with ways to sustain time-honored professional journalism to support – and enhance – the communities we serve. Some in the news industry are standing firm, holding on to past ways, awaiting a clear view of the future.  Both approaches can be successful; each has its own risks: either you change too quickly and do not survive the crossing from past to future, or you change too slowly and miss the boat altogether. We are constantly re-evaluating our plans and progress and correcting course accordingly.

It is a fact that Village NetMedia is leading the industry with its unique online approach to serving those seeking timely answers to questions. No other news organization in the world is likely generating as much traffic, participation and revenue serving a market as small as we are in Knox and Waldo counties. We appreciate that you are responding so strongly to our approach. (For readers of this blog: In two 40,000 population markets we enjoy 2.5 million monthly page views; 152,000 unique monthly visitors; 70% of these visitors have visited more than 200 times and we generate more than $500,000 revenue online through our membership and display ad activity)

According to a recent study reported by Al Diamon in DownEast.com, our two web sites are generating more than seven to 10 times the traffic of the websites of all other Maine weekly newspaper websites. We exceed the industry average for percent of total advertising revenue from our Knox and Waldo websites. VillageSoup is successfully marketing the platform used by our four papers to other daily and weekly newspaper around the country. By the end of July, we will have 15 communities outside Maine adopting our VillageSoup platform, the Digital Main Streets, with others planning launches this fall.

Daily postings by our bizMembers, orgMembers and iMembers are giving local businesses, organizations and citizens the opportunity to serve on our Digital Main Street as they do on our real Main Street. They give you timely tips for preparing your home for weather changes, keeping your children’s teeth healthy and offering special recipes for seasonal produce. They tell you their daily luncheon and dinner specials, their newest product arrivals and special rate offerings. And the proprietor’s unique personality many times come through as well.

These briefs and offers are typically viewed between 200 and 1,000 times. Our local businesses typically enter 110 posts a day alongside 45 posts from our professional journalists in Knox and Waldo counties. No other local news site serving 80,000 people achieves this level of community participation. We are proud and pleased to offer this unmatched opportunity for you to timely learn the news that affect our community, share the views that unite our community and shop the goods and services that sustain our community. If you are not a daily viewer of these posts, give them a try. And you can see them wherever you are by subscribing to our free apps for your Blackberry, IPhone and Android.

Thanks again for your subscriptions, your memberships and your presence. Please stay on board for the entire crossing.

Next column I will talk about the newspapers.

Two mindsets, two products, two platforms

Alan Mutter’s recent “Reflections of a Newsosaur” discussed the extraordinary adoption rate of mobile devices. This phenomenon reinforces the idea that to sustain professional journalism, news organizations will move from publishing one branded news product (flagship newspaper) on two platforms (print and digital) to publishing two branded news products (timely lists and leisurely serendipity) on two platforms (phone and pad). 

Consumers have historically used flagship newspapers to satisfy both their search and discover mindsets. These mindsets continue today and will into the future. The Internet has made it both possible and necessary to design two distinct products for two distinct platforms to serve these distinct mindsets.

• The products serving those in the search mindset, those seeking timely answers to questions, will be list-formatted and designed for phone devices. 
• The products serving those in the discover mindset, those seeking leisurely serendipity, will be display-formatted and designed for pad-devices.

The timely-answer products will be free to the user. Whether the leisurely-serendipity products are free to the user or paid for by the user remains a question.

Some leisurely-serendipity products are and will continue to enjoy user fees. My bet is that the content satisfying the discover mindset, provided by geographic-centered news organizations, will be free. 

Geographic-centered news content, by nature of the fact that it is produced so frequently, does not have the lasting value of content produced for books, music and movies. And geographic-centered news does not offer the opportunity for financial advantage as does the news from The Wall Street Journal, Bloomberg and The Economist. 

So while people will likely pay, if seamless and in small amounts, for books, music, movies and financial news, they will not pay for news and information that informs them as citizens. There are too many other ways to get this. It is of fleeting value. It does not have enough influence on the reader's investing acumen. 

Advertisers, using the new capabilities of these platforms, will continue to be the bedrock upon which geographic-centered news will be sustained. Dramatically reduced printing and circulation costs will compensate for the lost subscription revenue.

Phones and pads, while advancing rapidly in adoption, do not yet render the current pc and paper platforms obsolete. So, for now, the product designed for phones will also appear on pc's. And the product designed for pad-devices will also appear in print. The two distinct phone/pc and print/pad products will have the following characteristics.

• The phone/pc product will be brief.
• The pad/print product will be in-depth.
• The phone/pc product will feature trusted “who, what, where.” 
• The pad/print product will feature trusted “analysis, context, reflection.”
• The phone/pc product will be published 24/7
• The pad/print product will be published monthly. 
• There will be four, possibly more, monthlies, spread for publication across the month. 
• Each monthly will target distinct sociographic and psychographic segments of specific 20,000 to 40,000 population demographic markets. 
• Each monthly will have a distinct content focus varying by locale. For example:
• News Summary & Analysis
• Sports & Outdoors
• Arts & Culture
• Design & Life Style

I do not pretend to have enough understanding of the needs of metro, regional, national and world newspaper markets to envision their future. I am confident that the above is at least as good a vision as anyone else has at the moment for those news organizations targeting the 20,000 to 40,000 population urban neighborhoods, suburban villages and exurban towns. And as I said in a previous blog, this is the market with the most exciting opportunity.

Guttenberg, ARPANet, Empowerment

I remain convinced that professional journalism is sustainable within the current digital information revolution. And to achieve sustainability, news organizations must use the technology driving the revolution in a manner consistent with the reason the technology was created in the first place.

This current information revolution is tied directly to Russia’s launch of Sputnik. In 1958, congress created the Advanced Research Project Agency (ARPA) to focus on research and development in the areas of space, ballistic missile defense, and nuclear test detection. Driven to increase the speed and ability of its scientists to access and share information, ARPA began creation of a government supported data network called ARPANET. ARPANET led to the birth of the Internet and the current digital information revolution.

Charles M Hersfield, former director of ARPA wrote the following in About.com - Inventors: "The ARPANET came out of our frustration that there were only a limited number of large, powerful research computers in the country, and that many research investigators, who should have access to them, were geographically separated from them…^.Bob Taylor, who was Director of the ARPA Computer Technology program at the time, tells the story correctly (see the article "25 Years of the ARPAnet" in the proceedings of the BBN Conference, September 1994). Bob and his colleagues wanted to see if there was a way to link the computers to each other, and connect the users to these netted computers in a way that facilitated access by the researchers.”

Thus, the technology enabling our current digital information revolution was created to empower individual researchers to access and distribute information unencumbered by limited connections. In the news industry, the Internet empowers  neighborhood citizens, Main Street businesses and community organizations to access and distribute news and information without the limits of our newspapers. News organizations must serve them in ways which enhance this new power.

Newspapers are a mass medium characterized by control of content access and content input. Holding fast to the rules and tools to serve masses is not a winning strategy for an organization wishing to sustain itself in the digital information revolution. We are in the information business, not the newspaper business. Multi-section newspapers have been the best and most efficient means to deliver information to masses. Those days are over. Less frequent, more narrowly targeted publications will replace them.

The last information revolution that empowered individuals by giving them access to information controlled by a few began around 1439.  It was nearly 600 years ago, when Johannes Gensfleisch zur Laden zum Gutenberg invented movable type printing, printing presses and oil-based ink. It was nearly 600 years ago that the capacity of individual communication output and intake was dramatically changed. 

So, as in the era following Gutenberg’s inventions, today we have a market of newly empowered individuals. Our strategy to serve them must be focused on facilitating increased participation rather than holding fast to control. We must think in terms of serving dispersed markets not in terms of serving mass markets.

The four most important common traits leading to the success of new players such as Google, Facebook, Twitter, Craigslist and YouTube are: they serve individuals, they facilitate participation, they do not generate their own content and they dominate a world-wide market.

Which of these traits can we in the news industry emulate?  We must focus on individuals and not masses. We must facilitate participation. We cannot emulate no-self-content generating and no single news organization is going to dominate a world-wide market.
 

Disperse, hyper-local markets are the markets for which the Internet was designed. Hyper-local markets are our industry’s equivalent of the newly empowered individuals. And Main Street businesses can be valued participants delivering timely, useful news and information to the same people valuing the trusted news of professional journalists. 

And just as hyper-local markets are the targets best suited to this technology, small, independent news organizations are the organizations best positioned to take advantage of the Internet technology.  

Each urban neighborhood, suburban village and ex-urban town of 20,000 to 40,000 has many common traits which a one-size-fits-all approach can serve. But each has its own set of traits that make it different from every other like-sized community. This is the reason people choose to live in one place versus another. Independent, locally owned news organizations can best reflect and serve these unique community traits. Using the Internet, independent news organization can connect to each other, sharing tools, services and insights to perform as efficiently but more sensitively than can an aggregate of local entities under one ownership.  

These news entities serving these disperse markets are not likely to be darlings of the stock market commanding high multiple yields. But they will be solid businesses in their communities, facilitating participation and empowerment of its citizens, Main Street businesses and community organizations in community life.

What Gawker's Nick Denton can teach local news organizations

The founder of Gawker, Nick Denton, posted a story giving seven concrete reasons why Gawker is moving beyond a straight blog format. Below are selected quotes from his seven reasons followed by a list of my twelve take-aways for delivering hyper-local news to urban neighborhoods, suburban villages and ex-urban towns. 

1. "The Power of the scoop:
1. One law of media competition applies as strongly to web properties as it did to their predecessors: scoops drive audience growth.
2. Often advertisers don't want to be associated with scandal, once the dust has settled -- advertisers flock to buzz and growth.
3.  Using a single splash story in the center with a list of other headlines along the side, we can finally create front pages that match the visual impact of a tabloid wood or magazine cover; and we can leave them up as long as they're generating interest and not get rotated out by other later stories
2. Aggregate or die:
1. Our strength as an aggregator remains editorial curation
2. Pursuing one objective (effective aggregation) undermines another (the promotion of big stories and features.)
3. The solution? First, the creation or recognition of two different classes within the editorial teams: the curator or editor; and the producer or scoopmonger. Second, it means we have to abandon the single blog flow -- and separate out the strongest stories in a zone much more substantial than the existing skyline.
4. Create a gigantic breakout every few months; a few more modest hits every week; but the daily news diet can be satisfied quite happily with short posts, blockquotes (linked to the original, of course) and republished material.
3. Demonstrate a rounded personality:
1. The front page is our branding opportunity. It's a rebranding opportunity, too, a way to demonstrate intelligence, taste and -- yes, snicker away! -- even beauty.
2. I've sent around that gorgeous Iceland video so often that it's become a running joke. Why do items like that matter so much? Because they act as a palate cleanser, an antidote to the gossip and snark that might otherwise overwhelm our public image. And that appeals not just to readers but to advertisers, who love our audience but shrink sometimes at the methods we employ to garner attention.
4. The web is a visual medium:
1. Half of the top 100 stories (ranked by new visitors) are already built around video, slideshows or other imagery.
2. In the new layout is that every single substantial item will be built around imagery: a video, a gallery, a striking image or, if the words are strong enough, a text graphic.
3. This visual slot will be 640x360 pixels in size -- that's 64% larger than in the current design -- and be in the most prominent location on every page, above even the headline itself. Viewers will be able to toggle to a high-definition 960x540 version -- a full 3.7 times larger than the current video standard.
5. The growth of video advertising:
1. Already, some 30-50% of agency RFPs indicate that the client has video assets, typically a 15-second spot. These are often edited versions of commercials made for TV
2. The new layout increases the central imagery on each page by 64%, dominating the browser. One corollary: we can't run more than one such piece of imagery without making the page too heavy and sluggish.
3. The new video ads can only realize their full impact if they run at a size equivalent to editorial video and if they’re a seamless part of the experience. But the only way we can run both in conjunction is to insert ads between posts -- and not simply in the margins of the content. They become the commercial break.
4. We can run a 15-second video commercial in the 640x360 slot between two autonomous editorial items almost as if it was a spot leading up to the next segment -- deeply integrated into the content flow.
6. Appointment programming:
1.  Publish the best personal finance feature of the week to the front page at a set time, as the lead story. Other personal finance stories will be clustered around that time. This is appointment web programming. And, just as in TV, the hour will be available for sponsorship.
2. Few people want travel news, day in, day out. They want travel reference, when they're about to travel; and they might be willing to read Gawker's regular weekend getaway tips on a Thursday evening, if we were to introduce such regular programming.
7. Gawker is a branding vehicle:
1. The savvier media buyers know clickthroughs are an indicator of the blindness, senility or idiocy of readers rather than the effectiveness of the ads.
2. For premium media properties such as ours, this is a contest that should be avoided at all costs. It's a race to the bottom -- for the lowest quality ads and the least valuable visitors.
3. We booted commodity ad networks out from our titles five years ago; they were cheapening the sites and devaluing the brand benefits to our directly sold campaigns.
4. Today, a large proportion of our sales depend on those "roadblocks" which offer a marketer an exclusive presence on a front page for the day. These are branding opportunities which the ad networks cannot easily match. These exclusive front-page sponsorships are not limitless.
5. By bringing in sponsors for scheduled programming, as described above, we can create several exclusive advertising opportunities in addition to our core offering of the front door buyout. They can also be confident that their campaign will run against appropriate content: a cable show trailer with the weekly entertainment guide, for instance; or Visa's new credit card next to personal finance content.
6. There is no future in low-end web advertising, at least not for a media company with any aspirations. We will offer a larger canvas for both our editors and advertisers; and pair their offerings in the way that the web has so far failed and TV has done so well."

My take-aways for hyper-local sites:

1. Use scoops to drive audience growth. They produce spikes followed by higher plateaus.
2. Designate a curator and a scoopmonger.
3. Aggregate relevant stories from state-wide or other local publications.
4. Signal the level of importance of stories by size of headline and imagery.
5. Feature a block-buster monthly story, a significant weekly story, an important daily story.
6. Regularly post scoops of different types. (Tragedy & Celebration, Ugly & Beautiful, Work & Play)
7. Feature large imagery.
8. Liberally use large format video.
9. Think commercial break: Run a large imagery story, followed by a large imagery ad, followed by a large imagery story
10. Schedule certain story categories (finance, business, outdoors, culture, arts, entertainment, sports) at regular times and sell ads around them.
11. Don’t cheapen your site with commodity garbage inventory ads.
12. Create limited supply, limited run and targeted ad spaces and sell them as exclusives at a high price.  

Let me know if you incorporate any of these and what results from doing so. 

Newsweek-Daily Beast and YourCommunity Paper-YourCommunity Website

In my November 3, 2010 post I agreed with Larry Kramer, founder and former CEO of CBS Marketwatch.com, that a possible merger of Newsweek and The Daily Beast made sense. I disagreed with Mr Kramer's belief that print was a transitional product.

Eight days later, Newsweek and The Daily Beast announced their merger. The New York Observer broke the news, and the  Daily Beast announced the merger, followed closely by a Media Blogger post in the New York Times.

The blogosphere is actively discussing Tina Brown, a Daily Beast founding partner and to-be editor-in-chief of the two publications (e.g. Felix Salmon, Jeff Bercovici, Jack Shafer, John Hudson). It is also debating the strategy (e.g. Mark Coatney, Nicholas Carlson). To me, this merger, whether it is successful or not and whether Ms. Brown is successful or not, is a sidebar to the feature story.

This merger validates that media companies of the future will be those who serve both the reader seeking answers and the reader seeking serendipity. New York Times columnist David Brooks shares my point of view in his November, 18 column.

My recent columns have spoken about the opportunity to serve people when they are open to discovery, not on-task. Brooks speaks about the opportunity to offer "counter-programs against the ceaseless ephemera of much of the online world and offers things you will remember, a magazine that doesn’t endlessly chase buzz, that isn’t coastal urban journalists writing ceaselessly for each other, that doesn’t aim for insider-is horse race gossip when covering politics, that doesn’t chase the same upscale liberal audience that every other media outlet is chasing."

Brooks reflects on a past generation when "poor families scratched together their dollars to buy an encyclopedia, to join the Book of the Month Club, to buy Will and Ariel Durant’s 'Civilization' series or the Robert Maynard Hutchins’s Great Books." Brooks says that those families believed that through reading publications such as those just mentioned and magazines, such as Harper's Saturday Review, Time and Newsweek, they could "gain access to a higher realm they might someday join."

He posits that it was a society with a shortsighted mindset that led us to our recent economic bubble burst and that this society is now ready to return to a more serious mindset that thinks long term and adopts fundamentals such as: All people should study and know and be familiar with the best that has been thought and said. Consume what you can afford, not what you desire. Put less emphasis on the pursuit of self esteem, the belief that "you are wonderful the way you are." And no longer consider aspiring to a common culture to be boring and not all that hip.

Newsweek-The Daily Beast and others, such as Politico.com-Politico in Print, are using two distinct mediums to serve both the short term and long term mindsets of a national audience. Community news organizations can focus their efforts to do the same.

One of my companies is experimenting with ways to give its print product distinction by serving the long term mindset. It is enrolling community members who are passionate about the deeper meanings of life to provide nonfiction and fiction based on their avocations and experiences. Such stories are not time-sensitive, not answers to immediate questions, and appear in print first, available online to paper subscribers and to online-only subscribers after print publication. These stories respond to the local community's readiness, as Brooks says, to engage with publications "that transmit the country’s cultural inheritance and its shared way of life, that separates for busy people the things that are enduring from the things that aren’t."

This experiment has been well-received -- people like the variety of columns and opinions and opportunity to know their neighbors in ways not apparent on the streets and in community gatherings. And it is also generating a devoted and growing set of readers who opt to not to purchase the printed product but are willing to pay for online access to this content that goes beyond timely who, what and where.

Print works. Advertisers understand web.

Larry Kramer, Founder and Former CEO of CBS Marketwatch.com recently commended the Daily Beast for considering extending its publication into print.

In 1997, one of my start-up companies began publishing local news just online. In 2003, we decided to extend our product into print and introduced two subscription weeklies into two separate market areas. We recognized that our local advertisers wanted us to report on their events live, online. At the same time, they purchased full page ads in our competition, those legacy newspapers that had published print products for decades. We wanted that revenue. Five years after introducing on our own papers on newstands, we purchased those legacy papers, to rationalize a market that was saturated with more newspapers than advertisers would support.

Mr. Kramer says “The Beast has done exactly what it has had to do to build a new media brand, which is enormously difficult to do in today’s content-overload environment." He says they did so by creating original content, curating the best coverage on topics that rule the day, engaging its readers through blogs, discussion and social media, and adapting to new distribution platforms. Ours was a similar approach.

Mr. Kramer uses Politico as an example of an entity that has wisely merged old and new media to finance the transition to new distribution platforms. He says that print is currently a necessary revenue generating-medium. He says ” This isn't because the print product is better, it’s because it’s easier for advertisers to buy. They understand it. They still don’t understand the web. This will change, but in the meantime Politico, a new media company, is financing its growth on the web by using good, old fashioned print.”

I disagree with Mr. Kramer's rationale for why print is important to news publishers. I contend that:

1.  Print is not a transitional finance engine. Print is a long-term necessity.
2. Print is not easier for advertisers to buy. Print works.
3. Advertisers understand the web. Publishers do not.

My October 21, 2010 post focused on the fact that the Internet has changed the world. Tomorrow’s successful news publishing companies will be those that design their content and offerings around two different products.

One product will feature content targeting the reader who is at leisure. This content will be presented in display format (print on paper now, print on pad-device in the future). A reader at leisure is open to serendipitous discovery. Editorial content that analyzes, contextualizes, enlightens and entertains can draw such a reader's attention. This is why advertisers will continue to pay for ads in this format. History attests to the fact that they work. They are not buying them because it is easier than buying web ads as Mr Kramer contends.

The second product will feature content targeting the reader who is on-task. This content will be presented in search format (posts on web browser now, posts on mobile devises in the future). A reader who is on-task is searching for timely, specific news and information. This reader is seeking content that quickly provides who, what, where answers.

Tomorrow’s publishers will understand that advertisers can also be content generators in this format. Advertisers, given unfettered, unfiltered access to post their news and information alongside posts by professional journalists can also serve the on-task, searching reader. And by doing so, publishers will tap into a wealth of new revenue. Because space for this content is abundant, it can be less expensive. Because it is less expensive, the advertiser will represent smaller companies. These advertisers are not typically purchasing print advertisements. These advertisers recognize that they can compete, not by being clever and loud, but by serving those searching for news and information.

Contrary to Mr. Kramer's contention, the display format is not a transitional product. It serves readers at leisure and leisurely reading is a human pursuit that will not vanish. As display content moves from printed paper to digital pads, it will become richer, allowing new depth and interactivity not possible with print. A small number of advertisers will pay more to draw this reader to their interactive ads.

In the search format, Google, eBay and Craig’s List have proven that many small advertisers will pay a little to have their answers available when people are searching. Publishers can learn from these three web leaders and collect small amounts from many, thus creating important and new revenue. Advertisers understand the web. Publishers have to learn.

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.

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.

Joe Smyth has some big ideas right

Wednesday, September 22, 2010, Joe Smyth, CEO of the non-profit Independent Newspapers, Inc and Newszap.com wrote an article entitled Good Newspapers will Survive and Thrive.

I concur with some of Joe Smyth's points and have additional thoughts with others.

1. Joe Says: Pundits will be wrong again when predicting internet like radio and television would kill newspapers:
   
   I agree, newspapers will not die, but internet represents a different threat than did radio and television.  It is not simply another medium. It is another medium accessible to anyone. And it can stream sound, video and text. No license required. No capital expenditure required.
   
   
2. Joe Says: Industry's biggest problem is highly leveraged speculators:
   Yes, speculators are going to suffer first. But all newspaper publishers are experiencing trends that require actions beyond cost-cutting.
   
   
3. Joe Says: We love the internet and don't feel threatened by it:
   
   I disagree, community newspaper owners must feel threatened by the internet and embrace the unique opportunity it presents.
   
   Community news organizations can leverage their trusted community position and own the local internet space. They could not do this with radio and television. Print is being threatened and is going to decline more from the internet threat than it did from the radio and television threat.
   
   Radio and television expanded opportunities for the biggest of advertisers. The internet shrunk the core of community newspaper revenue -- auto and real estate.
   
   This lost revenue from a few can be replaced by the many Main Street  businesses. These are non-newspaper advertisers who can now serve their constituents on the community newspaper's Digital Main Street with timely advice and offers.  
   
   
4. Joe Says: We created community websites not newspaper websites and most of the content is provided by the users:
   
   I agree with the community website approach, but our reporters participate as the professionals they are in the community.
   Withholding reporter's stories will not work. Timely who, what, where community news is sought by the market and someone will provide it. "Good enough" can be achieved by a new player.
   
   The best example of this is Westport Now. This is the go-to-site in Westport. They have no paid reporters and a cadre of willing volunteers. Their stories are thin, but numerous.
   
   I recently spoke with a prominent Westport school administrator and two Westport lawyers and town activists, the very demographic Joe cites as continuing newspaper readers. They look to Westport Now for their local news, not their two Hearst and Journal Register newspapers.
   
   
5. Joe Says: We predict Digital-Only will be a losing strategy:
   
   Digital-only, search format is a losing strategy long term. But in the short term, a digital-only player like Westport Now can garner the trusted position for timely, accurate news and be ideally positioned to expand into print or iPad display format. And don't forget AOL Patch. While their strategy is flawed, they have the resources to enter a market, establish a position, learn and grow.
   
   Community newspapers enjoy the print stronghold. They need to gain the digital beachhead. History has shown that legacy industry players like newspaper publishers in this instance are hindered from doing so by their propensity to keep on established courses (processes, brands, prior investments, beliefs, ...). This tendency makes it very likely that digital-only players will be the long term survivor. They, free from tradition, will establish a trusted position cheaply, then start and/or acquire a print component. This is the story of VillageSoup in Knox County Maine.
   
   
6. Joe Says: We created community websites instead of newspaper websites:
   
   I agree a community website is the answer. And most importantly, this website has to be a source of new revenue from the businesses and organizations of the community.
   
   Trusted who, what, where news from journalists is critical to draw traffic to trusted who, what where news and offers from Main Street.
   
   Businesses and organizations are the key to sustainable professional journalism. They are the community journalists with a vested interest in serving their community and will pay to be able to serve on the Digital Main Street.
   
   
7. Joe Says: Each paper has an e-Edition that includes all the news and advertising:
   
   Static E-editions are a waste of resources and a distraction. Not until we have dynamic display editions will we be able to provide new value to both readers and advertisers. Timely, digital content-advertising is the best way to serve our readers and advertisers at the moment.

 So, the big ideas Joe has right are:

1. Newspapers won't die, or at least the display format won't. 
2. The internet is something to be loved not loathed.
3. Digital-only in the community news space will not suffice.
4. Community sites not newspaper sites will prevail. 

My next columns will expand on each of these four big ideas.