state of the journalism industry in Canada and how it is kind of
going down hill.
He had to go home early on the GO train. My friend who I was suppose
to meetup with called to cancel. She was sleepy after a very full day.
Damn!
I haven't been home at 10:30 since ... I don't remember how long.
This is all very strange.
Anyways. I was telling my mentor how the newspaper industry is dying,
not by the shift in technology, but by the poor business choices made
the people running the businesses.
The internet should've made these businesses more profitable.
Instead, newspaper are acting like British steelmills in the 70's.
They should be more like the small manufacturing companies in Japan
that eventually became Casio and Nintendo.
The post-war Japanese companies realized their expertise in making
calculators and arcade machines made them very suitable for the
computer age and they jumped right in to become very big concerns.
Newspapers should be dominating the internet right now. They can
capitalize on their massive brand value (goodwill,) existing
structure for content generation, their very very large client-base
(every business large and small have had done some advertising with
newspapers in the last 100 years. I can only imagine the rolodex on
the sales desks of every newspaper across North America and the
extent the their network is in place.)
Newspapers are actually far more suited to the internet compare to
radio, network, or music. The basic technology of the virtual world
is still HTML. Text. Bandwidth is expensive. Text has the lowest
transmission cost. Text is more immersive. Text is also cheap to
produce. Although good text, publishable, commercial-grade text is
still beyond the ability of most smaller organizations to make on a
consistent day-to-day level. (Each article your read in a newspaper
may have been the work of several journalists researching the topic,
another few to write. They also have an entire copyediting
department. Senior editors with decades of experience vet each
article. Finally, there is a culture within their community of
consumers to write back to the editors if anything is amiss --
community-generated content, or free labour.)
They should've anticipated Craigslist. It is also wrong for them to
blame their problems on one website. Craigslist is free. But in the
free market, you get what you pay for. The quality of classified ads
on it are actually pretty lousy.
Newspapers actually keep a lot of spam off their classifieds. They
should be concentrating on their strength. Better yet. Build a
"trusted marketplace" and they can handle payment and fidelity-issues
like eBay. Then can charge not on for advertising, but payment and
S&H as well. There is money to be made in post-purchase services.
It's also strange how reluctant newspapers are to adapt. I still
remember a few years ago how print classifieds were not cross-linked
with online ads. Also, I still remember how hard they used to make it
to view this online ads. I was looking for a job a few years back and
I was made to fill 2-3 pages of personal info before I can even look
at a job ad.
Newspapers, it seems, also don't realize the massive cost advantages
they have over internet news portals. People may get bits of news
from the internet, radio, and TV. But to get ALL the news, you still
need to read a newspaper. Radio and TV are like little tickers, you
are only really getting the headlines. To know all the reported news
for each day, the newspaper is the only usable medium. Reading a
major daily takes at least an hour -- just for the major news.
Computer displays are not designed well enough to be used for very
long. They are also not portable. Smartphones are expensive to buy
and must have costly wireless plans. Printing costs for consumers are
still $0.10 a page.
BTW, if consumers decide to print news websites to read on the subway
they are essentially subsidizing the print cost -- a massive that
they don't even come close to recovering from subscriptions or
newsstand sales.
I think one of the biggest concerns is that newspapers are still
advertising their circulation as their principle raison d'etre for
putting ads in their paper. Circulation is a useful metric. It is
also a very very old metric. Most rate cards don't even tell you that
newspaper readers tend to be richer, better educated, and
trendsetters. Unique site visits and click thru track one individual.
A newspaper left on a subway can be read by 5-10 people. A single
copy in a doctor's office can be read by 20-30 people a day. A copy
in a coffee shop, hundreds. People also trust newspaper more. Online
ads are still viewed with suspicion by many older consumer. As many
internet ad companies still focus on sex ads and get rich quick scams.
A simple assumption seems not to take place in the head-offices of
major dailies. Decision-makers in businesses use newspaper ads
because many of them read newspapers. There is a familiarity. Also,
if they want to reach customers who are, in many cases, similar to
those decision-makers themselves then newspaper ads are a good idea.
Circulation numbers don't reflect this fact.
The insularity of newspapers are scary. As Warren Buffet pointed out,
prior to the internet, a major local daily acted as an information
tollbooth in a city. One would assume that all the economic rent they
collected in the fifty-years after WWII would give them the economic
muscle to be big players. Ten years ago, in 1997, when the internet
exploded, why weren't the news organizations swooping into Silicon
valley as angel-investors? Developing a new medium like the internet
takes a lot of R&D. Venture capital often don't pan out. But if they
had bought twenty-thirty companies and just one of them ended up
being ... well, even Yahoo, they could have leveraged the technology
with their existing strengths. The same way Google bought Writely and
combined it with their traditional business of search engine and text
ads. Google Office currently don't make any money for them, but it
increases their dominance in their search and text ads. It is also
good future hedging: when it is good enough, they can use it to take
a slice out of the enterprise office market from Microsoft.
Imagine how different the internet would be today if newspapers were
equally foresightful. Ebay that offered added service to have
classified ads running in the city of the customer's choice. Useful
if selling a house. Or how about that if you paid for a quarter page
ad for a new product, Extreme Mousetrap 5000, your local newspaper
will help you put up a search engine ad. So if somebody is googling
"pest control," your website will show up on the first page.
In fact, newspapers with decades of experience design, layout, and
usability should be offering website design and hosting services
right now. Why let little two-person run an industry. They already
have all the business connections. They the expertise to do good
design. Or, at least, to hire and contract out the work. They have
designers on staff who are able to make the judgement call. More
importantly, they have a really really good brand and the physical
bricks-and-mortar stuff to ensure that they can be held liable and
won't sudden go out of business. For SME's that rely on their website
for business, this is a massive consideration.
And the brand power of newspapers, I want to reiterate again, because
it really is important. The internet remains a very murky and
transcient place for most people. Verisign, one of the most important
companies, handles all registrations for .com. If you bought an URL
like www.yourname.com, Verisign gets a portion of the fees. But
unless you are very net-savvy you won't know about that. On the other
hand, Gannet is the publisher of USA Today. They are in every
newspaper stand in America. They go to homes, hotel rooms. In fact, I
can buy it in Canada. Now, if newspapers had a reputation of being
competent businesses and good manager of information and being able
to "get" the internet and if both of them offer a similarly-priced
web service -- credit-card processing, let say -- who will you go
with? The company that plops a newspaper to your door -- rain or
shine -- or a company you heard is important when you asked your IT
guy, but you don't even know where the head office is? B2B is all
about trust. People still trust newspaper and their brick-and-mortar.
There is an counter-argument to all this. Also from Warren Buffet:
Stick with what you know and don't go into businesses you don't. I
agree. Major news companies are in New York and Chicago, not
Sunnyvale. They are not plugged into the buzz. They don't know the
players.
I think I have several arguments to that. One is that developing a
new competency suck, but necessary. It will take a lot of time,
effort, and energy. They will lose a lot of money buying into the
wrong companies and developing partnerships that go nowhere. But it's
like tuition fees. More importantly, trying beats dying. American
textile were a sunset industry in the globalization era of the 80's.
Newspapers, as content-providers par excellence, should be thriving
in the information age. They just got to work on the areas they are
not so good at.
Two. Newspapers already run a mass medium. They deal with all the
things like production, advertising, and marketing. Jumping to the
internet should be like business extension. The way your bank also
offers insurance and mutual funds.
Third. A newspaper is essentially a research think-tank attached to a
distribution channel. Some of the brightest and most resourceful
people work at newsrooms. If you don't have the information to act in
an new industry, maybe your employees can help. After all, they are
hired to dig for information. Some are hired because they have good
ideas. Maybe you can get them to write a report instead of just
publishing them in a column. Google stays innovative, some repute,
because they pay their employees to do side projects, unrelated to
their actual job functions. Many are expected to have one. That is
how Gmail and Google News come into being. Newspaper don't have to do
the same, but this really isn't some new wacky Silicon Valley idea.
Retailers often have corporate buyers ask their sales associates what
new product stock. In Toyota, assembly-line workers are expected to
give suggestion to workflow. I have yet to hear of any media outlet
make it mandatory for employees give suggestions at work. Ideas that
do come, like convergence, are top-down. And convergence was a
disaster because it was implemented from the top-down.
I think I have said enough. This is a very angry post because I love
newspapers so much. As a kid, one of my happiest memories was going
through the Evening Telegram everyday at my aunt's restaurant.
Customers came in and shared the different section with me. An
interesting article would serve as a common point to have discussions
between me and persons I have very little in common with. The city
daily is also a vital organization to gather local information with
the same depth and rigour. Many may dislike it for its biases and
omissions. Many hope that citizen journalists will replace it. I
think it is important to note that they are not held to same rigour,
ethics, and scrutiny. How many bloggers keep notes of sources. How
many refrains from blogging something until they can better
substantiate a news item? How many can fired or sued for errors?
There are some. but not many. I keep a blog. I can say whatever I
want. I love blogging. I can give my opinions. Say untrue things
(like errors in this articles.) But if I were a journalist, I am held
accountable to my words.
Since the end of the first age of partisan news-rags, newspapers have
become a daily record of the history of our times. The unfortunate
distortions, silences, and favouritisms are a necessary fact that
history is written by the powerful.
For all those cheering on the demise of the newspaper economic model
and its stranglehold on the "truth," and their seemingly incompetence
to deal with the Information Age, keep storming that Bastille. Just
don't expect revolution to a new order. It can just as equally bring
a counter-revolution, greater oppression, and ruin.
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