Despite the Chicken Little essence of the reports lately, the death of the newspaper industry has been exaggerated beyond belief. Sure, the news is bad. The Washington Post reported yesterday that even Warren Buffett feels that, while he reads five newspapers a day, the possibility of "just unending losses" means he wouldn't buy one at any price. However, I can see the industry facing a stunning Renaissance. To understand what is happening now and what will be happening over the next few years, let's look objectively at both historic and current states of journalism.
Not long ago, newspapers were comprised of facts, and only facts. When Hearst and Pulitzer had their squabbles during the gilded age, so-called yellow journalism sold copies and became part of the news landscape. But it was still regarded as not quite reporting. In the middle of the 20th century, the big blue tube became a primary source of local news and when Americans finally took the on-ramp of the info superhighway, newspapers put content online without any thought as to the impact this would have on the print business, which had always been dependent on classified and local ads (and sometimes subscriptions).
At that time, news organizations moved from reporting facts to proffering opinions, and reporters have since become mostly another batch of celebrities. Since TV news came aboard, we've had "branded journalists" such as Murrow, Cronkite, Rather, Philips (yes, Philips), and Amanpour -- but these folks earned their stripes in the trenches, often at war or worse, during domestic squabbles.
Newspapers have no such celebrity types -- except in a random Jimmy Breslin or Ellen Goodman -- and partnering with TV stations or networks might lend additional credibility to TV news, but it doesn't impact papers' bottom lines.
So from whence will the Newspaper Renaissance hail? It will start with papers moving away from their belly-buttons and instead examining their core businesses -- a process now slowly, painfully underway. The answer does not lie in federal bailouts of media companies, but rather in understanding that the modern newspaper grew up at a time when the economics of providing news favored local market scale economies of printing and distribution, as well as monopolies on local classified ads. Today, online advertising has crushed the dailies' revenue to the point where they can no longer afford to pay for paper and newsrooms (several with a $1 million newsroom payroll to cover!) while still earning anything resembling a profit.
The answer for newspapers will not come from the hallowed halls of Wharton or Kellogg. It will come from within. Newspapers must embrace what made them great: content from the Gutenberg start. When consumers see something useful to turn their lives more convenient, they always will and have shelled out for it. Rather than focus solely on how content is delivered, the papers need to turn focus to what is being delivered as well, and when they do, dollars will follow.
Some have pointed fingers at conglomerates for the downfall of the American newspaper and yet neither Gannett nor McClatchy is to blame. Newspapers have had owners since day one and those owners have used their papers to support businesses. Editorial has been ultimately influenced by its advertising take. Now, with online distribution having usurped classified ads and more of the local-market advertising dollars, papers have an opportunity to showcase an astounding diversity of voices and opinions without any fear of losing advertising bucks. The daily provider of knowledge can instead focus on reporting from many different perspectives, more than ever before, which creates valuable content, which in turn creates subscription dollars.
The argument has also surfaced that online news outlets will be the downfall of newspapers. Technology provides tools -- devices, gadgets, software, toasters -- on which to deliver content and here is where newspapers can shine. Also, the daily bugler still provides a level of credibility that no so-called "disintermediated news outlet" will achieve. Journalists aren't licensed, but we trust that the structure of a print news organization is a place where facts are checked and stories investigated, Wouldn't you know it -- most of the time that's exactly the case.
During this period when Pulitzers are handed out for such diverse reporting as "Client 9" revelations and hurricane victim photos, this does not mean people will suddenly rush to these veteran bringers-of-news and pay for local weather, traffic, City Council reports or bulletins from our White House. These are freely available and that won't change.
So people will pay for...? Foremost, they will give a coin for content that makes them money -- particularly in an unending haywire economy. Consider a used car salesman who is worried about losing his job because he's sold two cars in the last three weeks. His local newspaper does an in-depth analysis of regional consumer spending habits and triggers for purchases that include cars. Our woeful car dude will happily pay for this content because, armed with these impressive details, he sells more product and secures his livelihood.
What about the single mom loving the Wednesday columnist who offers practical money and time-saving tips? Of course she'll give a few dollars, especially if the content is wrapped in a tool that makes life easier for her -- perhaps that coupon that pops on her mobile phone she can use while picking up dinner supplies on her way home from work.
This is a fundamental shift for newspapers that have traditionally focused on a top-down approach to content for far too long, with publishers and advertisers partying at the top and consumers taking whatever comes trickling down (even if superb). Now power rests with the people for a change, and newspapers will finally embrace the opportunity to deliver content free from the constraints of a business model primarily reliant on local advertisers. Yes, it's that simple.
I think the newspapers will change the way they think about content. I think they have to. Bring on the Renaissance!
For more like this, do what everyone does: buy my book.
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