Wednesday, April 15, 2009

It’s time to reinvent the newspaper industry

The Internet didn’t bring the newspaper industry down.
Debt didn’t bring the newspaper industry down.
Declining advertising rates didn’t bring the newspaper industry down.
Complacency did.
When an industry goes from so high to so slow, so fast, it’s ultimately because its leaders became complacent.
They never thought that the monster profit margins would end. They never thought that diversification was important. Instead, they gleefully doubled down on print in recent years with ill-advised acquisitions.
After all, why diversify away from newspapers when they make so much money?
When you look at industries that ultimately fail, it’s because their leaders never thought a new technology or a new way of producing a product could come along. They thought they would be able to do the same thing forever. That short-sighted thinking is ultimately doomed to fail.
After both radio and TV tried to supplant newspapers for news delivery, you would have thought news industry leaders would have been on notice. Radio news was always destined to be a supplement, not the main event, but it still changed how some people consumed news. TV news has permanently stolen eyeballs and advertisers from newspapers, and yet newspapers were caught flat-footed when the Web hit.
The irony is that the Internet and Web should have helped newspapers make even more money. They are both vastly superior information content dissemination vehicles than newspaper trucks. The cost of making a good Web site is a fraction of that of a newspaper and is falling over time, while the cost of printing and distributing a newspaper is rising.
Even when America was enthralled by America Online, it didn’t become apparent to enough in the newspaper industry that this was the future. Nimble, non-complacent industries would have loved that millions of homes were getting Internet. Here was a much cheaper and easier to scale venue for content distribution.
Right off the bat, executives should have seen that the Internet and Web could do a few things exponentially better. Classifieds are one of the first thing that comes to mind. Rather than make a searchable, easy-to-use classified system online, newspapers shoveled non-Web friendly newspaper classifieds onto the Web. These weren’t searchable, didn’t contain links and photos were an afterthought.
In fact, they were such shovelware that they even carried the same space restrictions over from print onto the Web. Space in print is limited. The whole print model was built around scarcity.
There is no scarcity on the Internet. There never will be.
So, when people started seeing ads on the Web advertising homes with a frpl, instead of fireplace, it’s not hard to see why when Craigslist hit, the gig was up. Craigslist is not a technological wonder, its UI isn’t very good and it feels quite dated.
But it at least didn’t have ridiculous print abbreviations. And it was searchable, it allowed for links, it had photos and it was easy to use. Years later, it still looks and feels much the same as it did back in the 1990s, and yet Craigslist is better than virtually any newspaper classified system on the Web.
Complacency gave away to defeatism. After Craigslist caught on, newspapers began to give up on classifieds, thinking that we’ll never get them back. But we can get them back.
Nothing is lost forever. That’s the whole point of technological change. The newspaper industry has to reinvent itself.
Apple went from the brink of bankruptcy to current darling. The Internet, and products that utilize the Internet, are a big part of what has allowed Apple to turn things around. Apple recognized that it had to change from a computer company into much more.
Even Apple’s name went from Apple Computers to just Apple. Executives at Apple realized that they were no longer just a computer company; they are so much more. They had to be so much more — it was the only way to survive.
Newspaper companies have to become so much more than newspaper companies. This means completely reinventing corporate culture, mission, products, etc. Yes, this means making products that don’t have anything to do with the paper part of newspapers.
Most newspaper products on the Web were an awful lot like newspaper products in print (classifieds anyone?). That’s the problem. If newspapers want to reinvent, it means a lot more than just finding new ways to disseminate old content. Reinvention means thinking of completely new products that tap into separate markets.
That’s why a computer maker gets into the portable music space. That’s why a computer maker starts selling movies. That’s how a computer maker becomes a dominant player in the cell phone space.
If Apple executives insisted on only being a computer company, Apple would have gone bankrupt. Instead, when the chips were down, they decided to start taking major risks and those risk paid off. Newspaper companies have to start taking real risks, and they have to be captained by those willing to take risks.
Gazette Communications has decided to take real risksonline casino. They are separating content from products. That’s crazy right?
Sometimes crazy is what the doctor ordered. The Seattle Post-Intelligencer went online only. What’s an online-only newspaper anyway? It’s a newspaper that is reinventing itself. It’s a newspaper that wants to at least have a chance of being around in 10 years.
Defeatism must stop. The newspaper industry’s obituary has not be written. We can change the course of the future if we cast aside defeatism and complacency.
Even small steps — in the grand scheme of things — can make a big difference. Newspapers don’t have to concede the classified space. They can carve out their own niche and bring in revenue.
It just won’t be easy. To get classifieds back, we have to be non-complacent. We have to work hard — harder than Craigslist for sure. We have to build a system that is categorically superior to Craigslist.
Within a decade or two, I would be shocked if Craigslist was still the dominant online classified site. At this rate, I would also be shocked if a newspaper company overtook Craigslist. Rather, I’m sure, some non-complacent, nimble Web start-up will come along and reinvent classifieds, just as Craigslist had done decades before. Again, however, the future has not yet been written.
We cannot change the complacency of the past, but we can change the course of the future. We must make a pact never to be complacent again. New technologies will be rapidly forming and changing lives in the coming years.
If the remnants of the newspaper industry want to survive and ultimately thrive, we have embrace new technology and get out of front of trends, not behind them. We have to embrace change. And, yes, that means we have to employ people in all ranks who are not married to the past and are willing to be a part of a revolution.
And so, the newspaper industry eventually won’t have that much to do with paper. Like Apple with computers, newspapers will still have print products (and they should, after all there is a market for them), but newspapers will be so much more than papers. They’ll produce products that are wildly different from newspapers.

That’s the only path forward.

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