In an Economist interview, Slate’s Jacob Weisberg says “the leading news organisations have a stake in web-only newspapers not working because they will accelerate the decline of the large, if faltering businesses that revolve around print.” Cynical and true, I’m afraid.
Once smaller, more efficient, more collaborative, more quickly profitable online-only operations start working – and they must, or we’re all doomed – then it will force the big, old guys to utterly transform and radically shrink their businesses or die. Or it will inspire lots of new competitors to spring up and kill them. These days, I’m betting on the latter.
All the incumbents are fighting is inevitability. The losses at big, old print operations are simply unsustainable. As I said the other day, startups can come in and craigslist (as a verb) not only their advertising but also their content and distribution businesses. The legacy players have proven to be unwilling to disrupt themselves; that’s what Jacob is saying. So how do we get to that radically restructured future? Not through incrementalism but through transformation or death.
Couldn’t agree more. I had spent most of 14 years doing web development and management for the newspaper company I still work for, creating their first websites back in 1995. I thought that I would be immune to the cutbacks and layoffs, since what I was doing was laying the groundwork for the company’s future.
Last September, they eliminated my position and moved me back into the print side. Since then, they have laid off all of the web editors in our group. The people with the most knowledge and experience in Internet are either gone or doing other things.
This only makes sense if you realize it’s a strategy to save print. I had a person ask me yesterday if our website was so hard to use because we wanted people to pick up a physical paper instead. I had to tell him that no, that wasn’t the intent, but I’m sure they won’t fix that anytime soon.
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Well said Jeff, but I don’t think it’s as easy as it sounds to start a newspaper competitor through Craigslist. Sure you could, but that doesn’t mean the local community will trust you. That takes years of hard work, and it is one of the few advantages the newspapers have over blogs.
Brad: I don’t think Jeff meant to actually use craigslist to create an online paper, but to be small, nimble and efficient, thus grabbing from the newspapers there content and distribution.
I agree that the local community may not all immediately place the trust in you that they once placed in the local paper. However, they don’t trust the local paper anymore to begin with. Bad reporting, high ad prices, taking their market for granted, short-sighted planning – they laid the groundwork for the mass exodus that occurred once alternatives appeared via the Net. They no longer have the advantage. As for me personally, their are numerous blogs and other news sources I trust much more than the local rag, and for the reasons I just listed.
Most radical business change results in this kind of disruption. It’s just that with the newspaper business it is more visible and talked about. In hindsight things could have been different, but now their most precious asset (sources and access) is already being siphoned off leaving them with but an empty brand name to be bought and slapped on cheaper knockoffs. Sad, but soon forgotten.
It’s a shame that so many newspapers got bad strategic planning advice. (I have been involved with newspapers since 1990 and have an extensive background in strategic planning).
If you simply give away for free online what you’re selling in print, of course you’re going to lose print subscribers over time.
Newspapers provide something of value so they should charge for it online. If they did charge for premium online content, they would have kept more of their print subscribers AND had additional revenue from their online divisions.
Well, the NYT failed at charging for content. The only newspaper that seems to have succesfully done so is the WSJ, and they’re a somewhat special case to me.
I agree with Jeff on this: it’s a dead-end strategy. Monetizing your content will need to be accomplished in new ways still being developed.
Not true…the Times had more than 200,000 paid subscribers (and $10 million plus in annual revenue) when they stupidly abandoned charging online two years ago.
Consumer Reports has also made a mint charging online. There are many others in the newsletter business.
Eric-
Then why did the NYT stop? Was that level of revenue not enough to justify their online model?
As for CR, they are technically a non-profit. However, I would expect their readers (particularly on-line) to be a little more tech-savvy than average. And CR is more of a “reference” for specialized product review/reliabilty data, the type you look up months after the article was “published”; therefore, I would not lump them in as a “news” source per se.
Perhaps most of our disagreement has to do with what is “news/journalism” vs. what is more “research/data” presentation?
If you simply give away for free online what you’re selling in print, of course you’re going to lose print subscribers over time.
That works in reverse, too: If you simply sell online what others are giving away online for free, of course you’re going to lose online readership over time.
The WSJ has had (relative) success charging for online content because they made the case that it’s worth paying to hear what the Wall Street Journal thinks about a news story, even if you can get the facts (and a wide variety of opinions) for free with a couple of clicks.
The failure, IMHO, has been the newspapers’ continued belief that their packaging was what made them valuable, not their content. In the 70s, the New York Times was a convenient way to carry the news of the day around with you. But today, everyone’s got the news of the day at their fingertips at all times. The value proposition has to be what the NYT says that others cannot or do not say.
This is not an unsolvable problem, but very few seem intent on solving it…
Here’s another example…Jim Cramer, the loud mouth stockpicker on CNBC who has a horrible track record, charges big bucks and often gets it on his website for (at best mediocre) premium content.
The NYTimes stopped charging because they were a) dumb and b) got horrible strategic planning advice.
The reality is that news gathering and publishing can be done much more efficiently today than ever before. There is no reason why news wouldn’t go the way of Agriculture:
1900 – 41 percent of workforce in agriculture
1930 – 21.5 percent of workforce in agriculture (Agricultural as a share of GDP, 7.7%)
1945 – 16 percent of workforce in agriculture (Agr. as a share of GDP, 6.8%)
1970 – 4 percent of workforce in agriculture (Agr. GDP as a share of GDP, 2.3%)
2000/02 – 1.9 percent of workforce in agriculture (2000); (Agr. GDP as a share of GDP, 0.7%)
(source: http://www.ers.usda.gov/publications/eib3/eib3.htm)
To summarize, we produce more food, with a MUCH smaller fraction of the workforce, and at a much lower cost (read: price) to the consumer.
Just like 1 tractor replaced 20 horses, a laptop computer with an internet connection is replacing the multi-million dollar printing press … with this magnitude of reductions in cost (and barriers to entry), is it any wonder we’re seeing this type of sea change?
I actually agree with Jeff (and Jacob) above, but aside from the efficiency factor I wouldn’t look to agriculture as the model. Modern agriculture has ensured that huge conglomerates control the entire supply chain, from farm to market, and that makes it essentially impossible for small players to enter and compete. In journalism today, with the price of entry close to zero, it’s the conglomerates that are on the ropes and small entrepreneurs who hold the competitive advantage.
And while I think we’ll continue to see a shrinking pool of salaried “professional” journalists, in the end we’ll likely see more people contributing to the conversation that will become journalism. In farming, technology took people off the land through efficiencies; in communication, technology liberated people who couldn’t join the conversation before. We’re all word farmers now.
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Up early in the morning because somebody tripping in Jersey City by shooting police officers!