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Over the last several weeks I have watched the reporting and discussion about the crisis facing the newspaper industry in the US.  There has been some good reasoned reporting and analysis.  In my opinion, Clay Shirky’s post on the newspaper industry represents one of the best.

In much of the writing there is an undercurrent of surprise at the suddenness of the decline.  But, I think if you ask people close to some of these companies, you will find that what’s happened has been talked about for years.  Even the speed at which the product might unravel was acknowledged, if not acted upon by the people who made decisions.

I think we knew that classified advertising was eventually going to be gone and that we had  increased our investment in news and circulation on the back of profits from a classified business that quickly had little use for the circulation investment.  I still remember when it became clear that CareerBuilder could do almost as well in a non-affiliate newspaper market with its own telesales teams as in a local newspaper affiliated market.

I think we knew that we were trying to sell consumers newspapers that were mostly packaging and wire service to keep margins and circulation up and ultimately speeding the decline of the circulation we were trying to maintain.

I think we knew we needed focused surgery, but couldn’t take a knife to the areas that needed to be amputated in order to save the core.

If you are a newspaper today and trying to focus, one area you need to examine is the impact the internet has had on how we gather and create value for different types of content.

  • Reviews:  The internet has made word of mouth its own form of reporting that increasingly drives user purchase behavior and advertiser dollars.  Yelp and Zvents and the handful of social review sites have made reviews a marketing game of most friends and most reviews.
  • Opinion: Low-cost frequent punditry has made everyone the head of their own editorial page.
  • Reporting: Getting all the facts and just the facts of a particular occurrence.  Breaking a story and getting it mostly right.  The internet has changed the news cycle and the degree of precision that is required to break a story.  Newspapermen may not approve, but the audience does.
  • Investigative reporting:  I haven’t seen this model yet online.  It is a complex process.  In many ways it is like creating a movie or a video game.  The more value in the story – the deeper the investigation, the more roles and people who are required to make it happen.  There are people trying to make this work – ProPublica and a few others.   This will eventually get figured out, probably by someone who doesn’t have an immediate profit motive.  NPR, the BBC, perhaps a university project like Global Voices.

I am not even going to comment on the comics and all of the other things that we wasted so much time in the past discussing  TV Grid in the paper or not, comics in the paper, horoscopes, … They all exist online in better formats.  Be dispassionate about it.  If it doesn’t contribute to what you want to focus on, don’t waste time discussing it.  Just let it go.

So, what does that mean if you are trying to focus.  Some of it will be driven by scale.

If you are in a small market, you may want to have investigative pieces and a weekend features section, … But given the size of the market, you will probably need to focus on creating a community that gets the story in and creates a reliable volume of reviews for things happening in town.  You may employ a couple of stringers to make sure this happens regularly, but that may be all the market will support in terms of revenue or engagement.  Remember that not every citizen cares about every issue enough to run out to report on it or even read them when they are reported on.

If you are a large brand or national paper, you may have the revenue depth to compete to in all categories of content, though having a clear idea of which category represents the core of your brand and drives your most loyal consumers will be critical.  So, if you are the Washington Post are you investigation, news and reporting from the American capital?  And everything else is secondary color.  If  you are the New York Times, what are you?  Reporting from the style capital of America are you features driven?   Are you international news and reporting a la the BBC?  The challenge for them all is how to focus, you can’t continue to chip away at the news operation without a guidebook for what you want it to look like when you are done.

If you are major regional paper like the Chicago Tribune or the Boston Globe, which way do you go?  If the national papers are staking out positions in large-scale content activities and if the barrier to compete in the local reporting and reviews space is pretty low.  What do you do?  Look for economies in the technology platform, move quicker and faster than the new entrants to develop new online features?  Invest in quality of reporting and reviews? Maybe the answer is you have to break yourself up.  Be small and aggregate up to your region?  Is there enough revenue in the market to maintain a group of reporters to report on the city?

The other exercise that newspapers need to do is a clear understanding of revenue at risk?  Category by category of newspaper advertising needs to be examined to identify is there a dominant online advertising model for those advertisers – e.g. online job listing; what percent of the advertising is held by the newspaper, is the newspaper advertising share relatively stable?  Why?  Is there some braking inertia in the category?  Look at department stores. These stores still don’t have a good online ad unit to drive online audience to take an offline behavior.  Newspapers are often built-in to merchant coop arrangements guaranteeing some newspaper advertising presence.  So, if a good ROI driven online ad unit emerges and the marketers change the coop rules, then poof.  2 years, 3 years max.

Sorry, just some rambling on a Sunday afternoon.  I should spend a little more time trying to organize some of this.  There may actually be a unique thought mixed in here or there.

We knew then what would happen.  We probably know now what we need to do.  It is just very painful, but it is doable.  If the newspapers that are left are honest about what they see in the future and the implications for decisions in the present, then they need to get on with it. Articulate the future, give the employees that are going to be effected a heads-up and get on with it.

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