For traditional news media barons, the first decade of the century was ten years of living stupidly. Will they get smarter in the new decade? If, as Will Shakespeare once wrote, the past is prologue, then the media moguls haven't got a prayer. They've been entirely too busy claiming the internet and its content aggregators are putting them out of business, when it is themselves, not their stars, that are the problem.
Watching the media moguls stuck in the past reminds me of Will Rogers' timeless observation, "If stupidity got us into this mess, then why can't it get us out?" An answer to that question arrives in a perceptive new paper by two veterans of the how-will-journalism-survive debates--Penny Muse Abernathy, a Chapel Hill newspaper and new media expert, and Richard Foster, a Yale management expert. They have three pieces of advice for media barons in general and newspaper moguls specifically:
- Shed "legacy costs," which are mostly the costs of paper, printing and trucking (not, it's important to note, the costs of news gathering);
- Re-invent the definition of advertising to fit the opportunities created by the web (and the innovation demanded by it); and
- Support and serve niche, online communities as a way of re-establishing barriers to competition and, thus, regaining some control over the pricing of ads and, maybe one day, specialized content.
The call to incorporate so-called "social media" as a critical component of news delivery is the newest and most powerful idea in the paper. (It is an underappreciated fact that big newsrooms and news cooperatives like the Associated Press are unique in understanding how to handle large-scale social media--they alone have perfected the ability to receive, aggregate, re-write, customize and re-publish thousands of stories daily.)
But while nothing advanced by Abernathy and Foster is exactly brand new, all of it shares the distinction of having been completely and consistently ignored by old media managers. In "The News Landscape in 2014: Transformed or Diminished," Abernathy and Foster present old media's path to survival more coherently than anyone before them and they throw in some interesting calculations on the stock performance of big media versus the S&P 500.
They point out pointedly that their advice "is not for the fainthearted or lazy news executive." The pair add, "But, in contrast to the inaction or failed acquisition and growth strategies many media companies pursued over the last decade, it actually attacks the root of the problem and holds the promise of transformation and eventual survival in the 21st century."
Inaction, actually, would have been vastly preferable to what the media barons were cooking up for themselves as the decade ended.
Offering a leading example of how not to succeed in 21st century media, Si Newhouse shut down several Conde Nast titles, including Gourmet magazine. At its death, Gourmet had a community of 978,000 subscribers and a total audience (including pass-along) of more than 6 million, according to the publisher. In killing Gourmet, Newhouse confirmed his total ignorance of the web and the profit potential of niche communities, especially one made up of millions of upscale cooking fanatics.
Even murkier and harder to fathom were the constantly proliferating pay-for-online-content schemes getting proposed. Hearst, Meredith, Conde Nast, Time and News Corp. spent last fall talking about an "online newsstand" that would help them "control" the distribution of their content on the web. But the launch date keeps moving back. Meanwhile, some big advertisers responded with laughter after hearing Cathie Black's evangelical briefings on Hearst's plans for a "digital magazine," according to one major brand's online marketing chief who heard the pitch.
Most recently, Rupert Murdoch has been harumphing mightily about forcing people to pay for access to his Wall St. Journal site and "threatening" to wall off his newspapers' content from Google so it can't be found for free. Note to Rupert: Researching this piece, I got a link to a WSJ.com story about the troubles of Reed Business Information. Since WSJ wanted me to pay for the story, I quickly found another one on The Economist site. It was one of dozens of free reports available to me. That's the way the web works, Rupert. Big garden; no walls.
This stuff would be entertaining were it not that failed experiment after ham-handed attempt have shown and the most recent definitive survey by Forrester research has confirmed that some 80% of readers simply will not pay for online news. Yet the moguls keep trying to fix what ain't broken (readers, subscribers and subscription revenue) while continuing to ignore what is (ad revenue and serving niche communities of readers).
The moguls pine for the good old days, when geographic monopolies and huge barriers to entry (like the multi-million-dollar cost of a printing plant) kept them warm and preserved their 20% operating margins and huge enterprise values. They hang on doggedly, stupidly, even though the path to success on the web is becoming clearer and clearer, as Abernathy and Foster document.
Fact: We need news to thrive. We won't get there depending on stupidity to get us out of the mess it's gotten us into. So let's hope this is the decade when news barons come to recognize the new realities of the marketplace instead of just wishing things were different; when media companies organize and support special interest communities, becoming invaluable to the audience by serving up customized news and empowering community members to be citizen reporters; when moguls get paid for creating non-traditional advertising that's composed of news and entertainment as interesting and valuable to the readers as the news itself.
As we've seen in the decade just past, the hardest part of creating a well funded future for news is letting go of the past. After that, life will be easier. Promise.