The fruits of change

The lesson of the Thomson-Reuters merger is the value of change. Thomson was a newspaper company and in the ’90s started shifting, getting rid of papers and getting into data and finding great success and growth there. Reuters was a newspaper service company and it made the shift into not only data but also, thanks to the wisdom of its current chief Tom Glocer, into direct-to-consumer news. Both specialized highly, in financial data in their cases. Compare and contrast them with Knight Ridder, which doubled down on broad, generalized print products, and Tribune Company, which diversified from print, though not on a specialized track but in more generalized electronic media (TV and radio). Recognizing the value of specialized data as news and acting early — with strong headstarts, of course — was a successful strategy. Can existing newspaper companies start to think of themselves as data providers and enablers, but in different spheres (e.g., hyperlocal, listings)? Is there time?

  • Mark Rutledge

    “Can existing newspaper companies start to think of themselves as data providers and enablers, but in different spheres (e.g., hyperlocal, listings)?”

    Existing newspapers might have been a little slow on the uptake, but they are putting more resources into Web-focused, local-news reporting. The dust will settle, and existing newspapers will keep their ever-stronger advantage in providing in-depth, local news. Advertisers will recognize this and existing newspapers will remain profitable.
    If you don’t believe that, just imagine, for a moment, a world without local newspapers.
    You can’t.

  • http://deleted Tansley – addendum

    For Mark Rutledge: “…just imagine, for a moment, a world without local newspapers.
    “You can’t.”

    I beg to differ.

    Given what has been happening in the area where I live (Southern Oregon), imagining this area, at least, without local newspapers is suddenly extremely easy.

    Owing to the loss of timber compensation payments from the Fed, local county governments are being forced to make severe cuts in county services.

    We have lost our library systems in both Jackson and Josephine counties. Completely. Gone. Kaputzo. Ditto for county sheriff services in Josephine County, save for hizzoner the sheriff himself, and maybe one or two deputies, depending on how funds are allocated.
    A local levy measure to replace the lost federal timber funding for these institutions was just handily defeated by a populace already overburdened with property taxes. It’s hardly surprising that they weren’t willing to continue funding for these services out of their own pockets, particularly since we don’t have a state sales tax to add support.

    Reports in Josephine country indicate that applications for permits for carrying concealed firearms have more than doubled in the past month. Citizens are arming themselves once again in the face of this region becoming ‘the wild west’ once more. This is going to be good news to all the illicit pot growers in the region who were being busted on an almost weekly basis by a once-thriving sheriff’s office.

    Local advertising could easily be covered by simply putting out roadsigns again. Word-of-mouth used to work just fine for newcomers just arriving in town.

    Take away library facilities and rural law enforcement and the concept of not having local newspapers becomes a whole lot easier to envision. One can even imagine the return of the dime-novel…

  • http://www.thefutureofnews.com Steve Boriss

    Jeff, Agree. Reuters made a number of excellent business decisions. There’s also another subtext to the Reuters’ sale. It’s another milestone as we continue to leave a regrettable era in which Royal Families of news have exercised unearned and inordinate control over our “national conversation,” per my post today. Are the NY Times Sulzbergers, Dow Jones Bancrofts, and WaPost Grahams next to abdicate their thrones? (Steve Boriss, The Future of News)

  • http://www.planetabell.com John C Abell

    Thomson has undergone a great, prescient transformation I would agree. But Reuters has followed a more direct trajectory after losing its footing and for that company this deal is really more of the same: an attempt to regain the glory it conceded to the Bloombergs — and, yes, the Thomsons — of the world.

    Reuters was owned by a number of press associations until going public in ’84 and had/has a decent media (newspaper) business, but it was born as a data company which realized early on that leavening information with news created an offering that that was greater than the sum of its parts.

    The news agency bit, well known because it resides in our recent memory, was mainly to support the PA’s in Britain, Australia and New Zealand which controlled the company. Its newspaper business in the US was never robust. Direct-to-consumer, where I used to work, is miniscule on a revenue basis, and was aggressively pursued only in the past few years, under Chris Ahearn.

    Ironically, B2C might be an area that is vulnerable since it may not be a strategic imperative at Thomson, which is strictly B2B. Tom Glocer gives what might be a bit of a preview on this in today’s NYTimes where he says coverage of such things as “nonbusiness entertainment news” might be reconsidered.

    But as a Reuters alum I applaud this tie-up and do not share the fears of some that editorial integrity is at risk. News is necessary — especially for the high-stakes players Thomson-Reuters serves — and nobody is going to mess with that.

  • http://www.thefutureofpublishing.com Thaddeus McIlroy

    I think you’re breathing THEIR fumes, but here are a few more to sniff on from today’s Toronto Globe and Mail (http://www.reportonbusiness.com/servlet/story/RTGAM.20070516.wthomsonreuters0516/BNStory/Business/home).

    “David Thomson, chairman of Thomson Corp., which is owned 70 per cent by the founding family, said the arrangement provides opportunity on a grand scale with “no real overlap.”

    “The transaction is one about possibility,” he said. “Passion, courage and integrity are the keynotes of both these organizations. In so many ways, it is the most perfect alignment.”…

    …fears of job cutting were played down by Thomson Corp. chief executive officer Richard Harrington, who will step down after the merger, succeeded by Reuters CEO Tom Glocer.

    The combination is billed as producing cost savings of $500-million annually within three years, and while Mr. Harrington declined to provide details he said “a lot of those synergies are basically non-people synergies.”

    He disparaged “the old, old legend” of Thomson’s small Canadian newspapers in the 1950s and ’60s, which were managed so tightly that reporters had to turn in pencil stubs to get new pencils.”

    This transaction is about money, power, ego and market domination — the same old small town values that have made American business so great.

    Don’t believe everything you read; and don’t believe ANYTHING you read when it’s uttered by the self-interested parties that prove, again and again, to be utterly ruthless when working transactions at the scale.

    Barbarians in the newsroom!