Wednesday, February 24, 2010

Someone Must Pay

Earl Wilkinson of the International Newsmedia Marketing Association, his blog published in the New Jersey Press Association's newsletter, InPrint:

"What would happen if our local newspaper went out of business? ... My pat answer is that hypothetically, bloggers and nonprofit Web sites would rise up and take over the role of the local newspaper. Eventually, amateurs would become professionals, a Web site would emerge as the leader, a business model would revolve around their audience, and the ecosystem would return to equilibrium....

"How did E&P really die?" Of course, it's been resurrected, but still. "Like newspapers, its classifieds shifted to free online sources. Like newspapers, there was an overreliance on a certain advertising category.... Like newspapers, it gave away far too much for free on its Website. Like newspapers, its coverage became too broad for its resources.

"The E&P story should serve as a sober warning for newspapers on several levels:

"First, influence is great, but it rarely pays the bills.

"Second, to create value for content there must be the perception of scarcity. Don't give it away.

"Third, don't try to build audience by being all things to all people...."

Doug Page writes in February's News & Tech:

"The Internet forces yet another dismal economic model on newspaper Web sites: perfect competition.

"In this scenario, many players produce the same product -- as consumers see it -- which, because of this abundance, lowers the price and, more importantly, gives Internet users an incredible advantage: the substitution effect.

"And keep this in mind: The substitute need not be perfect.

"'The comparative advantage that newspapers have is professional reporting,' said Bruce Bueno de Mesquita, a New York University game theory specialist. 'They have the ability to take information, digest it and inform better than an amateur can.

'But that doesn't mean anyone will pay for it.'...

"The smartest Internet strategy may come from a publisher whose embrace of the Internet is more like a weak squeeze.

"Former USA Today Publisher Cathie Black, now leading Hearst Magazines, maintains only skeletal Web sites for her titles.

"As the New York Times quoted her last year, Ms. Black wants this: 'I want 1.6 million women to go to the newsstand and every month to buy Cosmo....'

"If you listen to what Black is saying, you'll know what's really important: The print edition is the only thing that cannot be substituted; the only thing that makes any newspaper unique; and the only thing that assures an advertiser that their message is displayed."

Of course, any new-media theorist will simply dismiss all this as: "They're so stupid!" But it's really up to the owners of newspapers. Most journalists don't think in terms of workable business models; indeed, a workable business model often seems to be the enemy of journalism, in the same way that doctors don't really want to run businesses, which is why their offices are so often an operational mess. So publishers and chairmen have to take the lead.

They can act boldly for print, as Walter Hussman in Little Rock has done; or they can act boldly for online, as in Ann Arbor; or they can say: "Well, I don't know, if I do something, there might be a downside." Since most newspaper publishers and prospective publishers who came out of the 1990s and early 2000s got their jobs for keeping profits churning while avoiding any substantive risk, I suspect Earl's projection of the future -- current big media swept away, replaced by new big media -- will happen, much more than a future in which the independent citizen-entrepreneur-journalist model prevails. Permanent revolution didn't work for Mao, so why should it work in the news business?

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