Wednesday, June 18, 2008

The Revenue's Just Not There

OK, the head of USA Today said it, now Gary Pruitt of McClatchy said it:

"McClatchy will likely end up with online revenue around a couple hundred million dollars this year. But it will not equal print revenue in the foreseeable future."

As an anonymous poster on Gannett Blog noted today:

"News gathering is too expensive to be sustained in the low-rent world of the Internet. We can't produce a page of news as cheaply as a competing site fills its screen with user-generated content -- or stolen digests of what the newspaper world produced at great expense."

Fine. Can we stop having to believe now that the online fairy is going to make everything OK again at some unknown point down the road? Can we start really talking about how to save ourselves and what we do and believe in, for those of us who believe in it, and stop saying it's all about the conversation and trying to match the economic model of bloggers? More niche products, fewer but smarter pages (whether just for now or forever), higher cost to consumers, pay walls like Little Rock's, whether beneath the bombast of Lee Abrams' notes are ideas that could save the sort of journalism we need to do while producing the sort of products readers may want more than we do? Every idea gores someone's ox. Can we do this without running for cover every time someone says, "You're just trying to save your stupid 19th-century buggy whip business"?

We've believed for a decade that at some point in the future, we'd strike online gold and clean up there like we cleaned up in print. It's not going to happen. That doesn't mean, forget online. It means we need a strategy based on what we are, and not based on a complete metamorphosis into something else that in any event hasn't happened in the last decade anyway. In the end, our core competency is that we publish newspapers. Let the people who want to be something else be something else.


Doug said...

Our core competency is that we gather news and information efficiently, effectively and with as much veracity as we can muster -- and then that we distribute it in a way that maximizes the economic benefit to the organization and, we hope, the social benefit to the community.

Saying we publish newspapers is not that. Neither is saying we publish online. Both are "buggy-whip" strategies.

You publish where your audience is and with what they want to pay for. If that means posting it over the urinals in the men's rooms of the local bars or buying billboards with constantly rotating headlines, then so be it.

Problem is, too many places -- and damn too few journalists -- still don't know exactly where there audiences are, how they exactly use our product (info, NOT the paper), or where they are going (hint: it may not be online in more than a few cases).

Nah, schlepping up to the Internet bar as though it will drown all our sorrows isn't it, but neither is focusing on the "core competency" of publishing newspapers -- because that is NOT our core competency.

Davisull said...

One could say the core competency of a railroad and the core competency of an airline are the same thing. Both transport people and goods from one place to another in a way that meets a schedule, is (or should be!) economically effective for both sides, is safe, etc. How many times are we told that the railroads' problem was that they thought they were in the railroad business.

But the core competency of a railroad is to transport people and goods using rail equipment. That's how they do it. That's what they know how to do. An airline uses other means. It knows them better.

We gather news and information efficiently, effectively, truthfully -- and we distribute it for our profit and the good of society. Television news also does this, or at least says it does. As does all-news radio. As do printless sites such as New Haven Independent, and newsmagazines. And, as the common definition of "news and information" keeps loosening, so do other agencies, sites, and forms.

But we also are really good at doing so by running presses and trucks and selling ads by space and delivering the product to people's homes. Better than anyone else. We do that as well as TV presents half-hour news programs over the air. Our immediate problem is, of course, that we are not as good as a newer medium in presenting searchable ads -- as we call them, classified. Our longer-term problem is that fewer people seem to be interested in our product. Of course, TV and radio have the same problem. But the product is not "news." Anyone can produce news and news can be obtained in myriad ways. The product is the method by which we distribute and package and present it.

Other people may in fact be better than us at gathering news and information and distributing it electronically. Because they created that business, or because they have a different definition of news and information just as TV now does after starting in the same place we were, or because they start from scratch with a client base that wants that service and no other.

Or we might be equally good in both, although so far that is the exception. And I am speaking here not of the individual journalist, but of the news organization. But we are continually taken to task for not having created Google, etc. Well, why would we have? We were not in the online agglomeration and search business. We were in the newspaper business.

Yes, you publish where your audience is. But you also publish in a manner that you excel at. A railroad might cross-sell tickets with an airline, but a railroad doesn't really understand the airline business even though both businesses involve putting people and goods in containers and moving them across the country.

People keep saying the Internet is the future (as this debate from Chicago Reader: Nah, it's the present. Many of us may already be in a position where Internet operations will never be more than adjuncts, because the people who are mainly in the Internet business are going to define that, and with nine out of 10 dollars still coming from print, we are mainly in the print business.

We are trying to hold onto being universal providers of news, the common tongue. But that day is over. We can still be extremely good at what we do. But we will never be as successful at exploiting a new medium as a group created specifically to exploit that new medium. So we need to pay more attention to exploiting the old in new ways, and stop waiting for the new ship to magically carry us away from the old medium's problems.

So, yeah, we publish newspapers.

That said, your fourth graf, starting "Problem is," is also at the heart of the matter! And the fact is that they not only don't know how they use information, they also don't know how they use the paper.

Thanks for writing!

Doug said...

Indeed, that's always been the argument. But you know, Fedex and UPS run truck fleets as well as airlines as well as logistics operations. So we need to be careful conflating process with core competency.

Our core competency is information gathering. We happen to be skilled printers. But if we focus on that as our core competency, instead of just a skill, we risk doing what this industry already has gone a long way down the path of doing -- missing opportunities, failing to see massive change and adapting, etc. (I suspect that if, tomorrow, yaks suddenly became the preferred mode of transportation, you'd see a UPS logo on the sides of a whole herd of them, and it would quickly figure out how to adjust its business.)

The entire paradigm changes (gawd, now that I'm in academe I love that I get to write that stuff) next February.

When TV goes digital, so much digital space is going to open up (notwithstanding that Verizon bought most of it from the feds already) through digital sidebands on TV channels to "white space" devices that Google and others are pushing. That will completely change the R&D on those devices (now commonly called your cell phone). I suspect Moore's Law will again show up. You're already seeing it with the second-generation iPhone and cheaper entries from other makers, plus some high-end stuff from Nokia.

That thing on your belt or in your purse is going to be your computer. It will be mobile and, as a result, will be "always on." When I want to access information, I won't need the desktop or laptop. (Couple that with extremely high-speed connections through things like Verizon's FIOS when you do "dock," and things really change.) In such a situation, the paper might actually be a viable, but somewhat niche product, as a respite from the information onslaught.

Our problem is that we are in an interstitial era -- the predominant shape of technology has not come into view. We are, with desktops and laptops, still in a 1990s model of computing and telecommunications.

Any newsroom not preparing for that change when most of the world is mobile and always on is in trouble. Yet, that is not a core competency either. So, yeah, you're going to need the trucks for a while, and the presses. But you might need the yaks too.