The Times better change

The other day, when I noted that the hedge fund breathing down the necks of the NY Times Company board and management had acquired as much stock as the Sulzberger family, I said that strategic change in the company is inevitable and I asked you what you’d do with the business. Here are some of my answers:

* I fear it’s too late to sell the Boston Globe (which just announced more buyouts). Bet they’re kicking themselves now. Jack Welch was interested in taking it off their hands in 2006, when it was valued at $500-600 million — down from the $1.1 billion the Times Company paid for it in 1993; the Times just wrote-down the value of the Globe and a sister company by more than $800 million. Whoopsie daisy. I doubt they can sell the thing today.

So I would make the most radical restructuring of a newspaper anywhere in the world and use that as a laboratory for the Times itself and for other newspapers (see how new Tribune Company boss Sam Zell is using his smaller papers as “petri dishes“). I’d follow Dave Morgan’s advice and cut the newspaper company into four: production, distribution, advertising, and content. I’d sell the first two (getting rid of huge amounts of staff and shutdown obligation) and free up the advertising company to sell any local media, starting with a collaborative, distributed hyperlocal network the Globe must start to complete with the local papers that ring the city and strangle the Globe (papers the previous owners should have bought but didn’t). This sales effort has to work in radically different ways, setting up high-volume automated systems that members of the network itself can sell into. The old structure of well-lunched sales people who didn’t really sell but just handled lists of inherited clients won’t work anymore; Google is about to eat their lunch locally.

The content arm, meanwhile, needs to get rid of anything that does not focus on local news. More radical, it needs to start to aggressively drive readers from print to online, leapfrogging to the future that publishers dread, past paper. The Globe should become a testbed for reverse syndication, handing readers over to the Times for national and international coverage and perhaps also for national business and sports and even entertainment (and getting a revenue share for the new traffic the Globe sends Times’ way). The paper should take a hard look at whether to make sports a separate product and whether that should be in print or digital (a decision driven in great measure by ad sales). The print product should be ruthlessly local and anything else in it should be well-supported by advertising. Such a denuded but focused product may need to be free.

The Globe should then define itself first and foremost as a digital company and, more important, as a community company, a relationship network. It should become a platform for local news, information, and action and for new local sites and companies. That’s what comes after being a content company. This means that the staff must change radically as roles evolve from producing content to organizing, enabling, and educating collaborative and distributed networks.

The Globe that emerges should be of a radically different size but I fully believe that if the Times Company showed the balls to be the first to completely and radically reinvent a newspaper, its value would increase.

* As for the New York Times itself, I’d cut bait and turn it into a national newspaper — international in their dreams. The Times is not now and has not been for sometime a New York paper. So I’d either spin off or kill metro coverage. It could become a new local online collaborative journalistic network in the mold of the new Globe. Or it could die and I firmly believe a new and more nimble local network can emerge and take up the slack left. With that spinoff goes the Times production and distribution arms, in the Morgan model.

The New York Times itself should focus on what it does best and wants most to do: national and international coverage for a national audience. Either the Times will succeed at being the premiere American national news brand or . . . well, there is no “or.” That is the Times’ only choice; it is the box into which it has boxed itself.

What form does that take? It clearly should be more online than print — soon or immediatley exclusively online. It must focus on great reporting. It should be open to all media. It should become the host of opinion and discussion about all issues — which will be tough for them. The Times will have hearty competition from both the Washington Post and the Wall Street Journal but it should bravely leap ahead and recognize that Dow Jones management is scared of change (thus their mewling and successful efforts to convince Rupert Murdoch not to take down the pay wall . . . for now). It will also have competition from international news brands coming to America: the Guardian, the BBC, and possibly others.

I think the Times should explore the reverse syndication model I propose above and have the ambition to be the source of national and international reporting for every metro and local news site in America. If those sites send them enough traffic that generates enough revenue, the Times could expand its news coverage. By sharing revenue with those sites, it would beat the other competition in the old syndication business: wire services. But they’d better watch out: Reuters could be right behind them.

The Times should create and sell quality collaborative networks and expand the brand around its value: reporting. It should invest heavily in digital innovation and learn well from work that is going on elsewhere, especially London. And it has to become the product of collaboration with networks and independent professionals and its audience. I agree with Fred Wilson here: “I’d make the NY Times all about their audience. Let the people who read the paper have a much larger role in the content that gets published, both online and offline. The best thing about the NY Times is their readers. The only way they can fix their problems is by leveraging them as the other half of their newsroom.”

* Some — including the hedge fund pressuring the company — would sell About.com but I’d hold onto it. (Disclosure: I consulted there for about a year and a half.) About is the one bright-spot in the Times P&L. It has brought understanding of online, SEO, and new means of content creation into the company and had an influence on the paper. It is, for now, the company’s only real digital asset. The reason to sell it, I think, would be to recognize profits and to set up the company’s balance sheet to go private if it chooses. But I think that’d be a strategic cop-out.

* I agree with Fred Wilson that I’d sell other assets. They are a distraction and management has enough on its hands. This includes the Herald-Tribune, which I’d probably fold into the Times operation and brand.

* Yes, and I’d sell the building.

At the end, the company can concentrate on rebuilding and extending its core asset, the Times’ reputation, and build a new relationship with its public.

  • Walter Abbott

    Jeff,

    You describe a fascinating and radical prescription for saving The New York Times. My prediction? They’ll never do such a thing.

    For over two years, I’ve intensely followed and studied the huge transforming shift in information sharing that is taking place. I’ve particularly focused on the advertising aspect, since from that flows the lifeblood (money) which keeps any business afloat.

    The other day in “The Times will change” I opined that its all about advertising dollars and that print cannot compete with electrons in the efficient delivery of advertising. It is that simple.

    As I have stated before, I’ve been a news junkie all my life. Your blog is a must read for me every day, because you’re one of the few newsies trained in the Old School who has figured out what’s taking place. And your commentary reflects that.

    What you propose for The NY Times is hugely radical and cannot be accomplished without a complete turnover of personnel. Those now employed at the Times will never accede to such a huge culture shock, least of all “Pinch” Sulzberger. The ghosts of his family would arise and haunt him continually. Two hundred years of newspaper culture would have to obliterated to make your proposal happen.

    True, The NY Times ‘brand’ still has some residual value, but that’s rapidly eroding with each well-publicized faux pas (Jayson Blair, MoveOn ad, Duke Lacrosse reporting, etc.) they commit.

    Throughout U. S. business history, we have many times witnessed entire industries and their companies go away because they could not or would not change their culture to adapt to progress. This is particularly true of industries which once held a monopoly position. We will continue to see that happen – history does repeat itself.

    It will happen to The New York Times and many other large metropolitan newspapers. The newspaper industry, as we have known it for the past two hundred years will soon be gone. And there’s nothing anyone can do about it.

  • http://annbrocklehurstjournalism.blogspot.com AnnB

    I’ve always found your continued insistence that Aboutcom is the “one bright-spot in the Times P&L” to contradict one of your other main arguments, namely that there is no longer a content scarcity and that profit margins for content must inevitably drop.

    What About.com does is easily replicable so how can it be that in this age of “digital dimes for dollars,” that it is, in fact, more profitable than the Times’ other properties? Something just doesn’t make sense.

    About.com’s not doing anything particularly unique in content and a lot of its content is, in fact, quite mediocre. As for SEO, well, a lot of people, including Jason Calacanis, think that apart from a few basic points – such as use the right keywords in the right places – that SEO is largely BS.

    So, what exactly is About.com’s secret to profitability?

    According to the NYT’s 2006 annual report it has some 500 sites and $80 million in revenues or $160,000 per site. It pays its guides a minimum of $750 per month or $9000 per year. Let’s say $12,000 max. That leaves $148,000 to pay for a few employees and a minimal infrastructure. Something just doesn’t add up.

    I’m wondering if a lot of its profits aren’t due to pages like this which are pure ads http://dogs.about.com/z/js/o.htm?k=dogs%20scottie&d=Dogs%20Scottie&r=http%3A//dogs.about.com/od/newdog/New_Dog_or_Puppy.htm

    Owning lots of pages like this is what has made the domain companies’ and ad arbitragers’ long-tail fortunes. What I’d really like to know is how many of these pure-ad pages About.com has as opposed to its content sites. And, are its revenues and profits coming form the pure ad pages as opposed to the content pages?

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

    Jeff, Well, that’s a start. The Times also needs to more freely admit that it’s a liberal newspaper, and be less shy about rooting for liberal positions within its articles. That is their community and, after all, the Times believes these positions are “the truth” anyway. The dilemma they and their readers face, however, is that neither understands political ideology well enough to recognize and admit that they are indeed liberals (Steve Boriss, The Future of News)

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  • http://www.localbroadcast.tv Drew Robertson

    As far as editorial bias. If the NYT wants to transform itself into a global news property, it has to appeal to a global audience. Think for a sec. What would sell more impressions in London? WSJ.com following the FoxNews line or NYT.com? To appeal to readers in Asia, LatAm and Europe, NYT will have to give them a straight-up take on the news and a non-Americacentric view. Global audiences would certainly prefer the current liberal tilt of the paper. For sure they don’t want to read articles like the one today about Obama’s “difficult path as he courts Jewish voters”. That kind of AIPAC-friendly pap is poison.

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

    Drew, I agree that the Times has to pick an audience, whether American liberal or global leftist. As far as there being a “straight-up take,” there is really no such thing — the selection of stories/angles alone, what they think is worth calling attention to, inevitably reflects bias. The best they might be able to do with their liberal/left bias is be fair to the arguments of the other side, and keep their readers under the misimpression that they are simply presenting the correct way to look at things rather than a liberal/leftist perspective. But, this will continue to piss-off those who are not center-left, especially if Old Media continues to follow their lead.

  • http://blog.daylife.com/ Matthew

    I moved from Boston to Utah – primarily to ski. I say this to set up my analogy.

    1. Post-war (WWII) nascent ski industry begins to flourish; it’s somewhat elitist at first.
    2. The marketing of family skiing takes the elitism out and broadens the market.
    3. Uh oh! What’s this snowboarding “fad”?
    4. Skiers vs. Snowboarders: A great New vs. Old arbitrary war
    5. Snowboarding brings new tricks, gear, and Q rating to the slopes
    6. Skiers incorporate the new tricks, gear, etc.
    7. Snowboarding and skiing, from an industry perspective, become one and the same (with the improvement of the entire industry).
    8. Skiing = print/analog; Snowboarding = online/digital

    Media seems to be stuck somewhere between 5 and 6 right now, depending on where one is looking.

    The analogy is not perfect because of the role of advertising revenue in the media portion, but I think it’s a decent abstraction. What do you think?

  • http://www.pressthink.org Jay Rosen

    I like it, Matt. Especially having recently taken up skiing and seeing how the two markets work together.

    Jeff’s sweeping vision makes a lot of sense to me. I also agree with Fred Wilson. The biggest asset the Times has right now is its high-knowledge readers, the user base itself.

    But standing in the way of realizing any of this is a false conclusion too many people at the Times have: because they made it to the New York Times, they are the gold standard in news and information, and what maintains that standard maintains the Times.

    Here’s John Markoff–their technology reporter, based in San Francisco, steeped in the digital world, the one guy who might have distance on his professional culture, in a “i”ve seen it all” interview with Online Journalism Review in 2003. Not 1993, 2003:

    Q: Well, you’ve touched on a really central concern of a lot of people — over the last 10 years, if not longer — particularly among journalists who, I guess you could say, are more traditional, who look ahead and see all these pitfalls that are coming — of people who suddenly start creating content who don’t have the same standards as, well, The New York Times. Do you see that as an issue or are we beyond that now?

    JM: Well, I’m of two minds. I certainly can see that scenario, where all these new technologies may only be good enough to destroy all the old standards but not create something better to replace them with. I think that’s certainly one scenario. The other possibility right now — it sometimes seems we have a world full of bloggers and that blogging is the future of journalism, or at least that’s what the bloggers argue, and to my mind, it’s not clear yet whether blogging is anything more than CB radio.

    And, you know, give it five or 10 years and see if any institutions emerge out of it. It’s possible that in the end there may be some small subset of people who find a livelihood out of it and that the rest of the people will find that, you know, keeping their diaries online is not the most useful thing to with their time.

    When I tell that to people ? they get very angry with me. … I also like to tell them, when they (ask) when I’m going to start a blog, and then, ‘Oh, I already have a blog, it’s http://www.nytimes.com, don’t you read it?’

    Q: (Laughing) High-end blog, maybe?

    JM: Yeah, that’s right.

    That’s what they’re up against. “Seen it all” people in a “holy shit!” world.

  • http://www.buzzmachine.com Jeff Jarvis

    Well, Markoff is blogging now. OK, he’s hardly daily. But I spent time with him at Davos and he’s much bloggier now. Old dogs do learn new tricks. I call that progress.

  • http://bloggasm.com Simon Owens

    I disagree with your reverse syndication idea, that driving web traffic to a web page should result in shared revenue. I’m sure some of the bigger blogs could drive a lot more traffic to the NY Times than most newspapers. Should the Times start handing out money to them too?

    To take it even further, I think it would be controversial in the same way that Pay-per-post is controversial. Are you linking to this NY Times article because you think it’s a good resource or to get money out of the link? If both the Washington Post and the NY Times wrote an article on the same subject, would you refrain from linking to the Washington Post story just because the NY Times will give you money?

    Plus link traffic is so fickle. There have been studies done, for instance, that show that people who follow Digg links rarely click or pay much attention to ads on the sites they visit. There have been tons of media blogs that have said that pageviews aren’t really worth very much, so I wonder how much extra revenue a short burst of traffic could really bring in.

  • http://bloggasm.com Simon Owens

    Oh, and another point that should be mentioned. We’ve heard stories of sites being punished by Google when the sites have sold links to boost pagerank — their page rank is usually either downgraded or they’re taken out of the google index completely.

    If Google got wind of the NY Times setting up some link/ad share system with other websites, would it go in and manually alter the NY Times page rank?

  • JennyD

    I don’t get Aboutdotcom. I never use their links, and them as some weak aggregator of poor content. What am I missing?

    As for skiing/snow boarding, I usually ski Alta–where snowboarders aren’t permitted. Then again, it you’re a snowboarder, Snowbird is the place to be. Something for everyone…

  • http://www.pressthink.org Jay Rosen

    Well, Markoff is blogging now. OK, he’s hardly daily. But I spent time with him at Davos and he’s much bloggier now. Old dogs do learn new tricks. I call that progress.

    Not me, Jeff. I’m sure you had fun hanging out at Davos. But your post is about vision. Toward blogging, at least, Markoff had none when it counted. That he’s up for it now is meaningless. He was someone the Times depended on to show the way, not bring up the rear. His digital literacy was higher than just about anyone’s at the newspaper then, and there he is laughing about how his blog is http://www.nytimes,com, and maybe this invention will be the next CB radio.

    When Markoff writes about how wrong (and snippy) he was in 2003, that will be progress.

  • http://blog.syracuse.com/newstracker Brian Cubbison

    For all the talk of innovation, from the top by Zell and Singleton, from the bottom by the fast-growing wiredjournalists.com, and from outside visionaries, what we see are the cuts. Where are the innovations? The cuts are outpacing the innovations in a big way. The San Jose Mercury News had to put its Rethinking the Newspaper project on hold to deal with the cuts. Now employees are told to wait by the phone next Friday morning, and if they don’t get a call by 10 a.m., it’s OK to come to work. Newsday is cutting 120 employees, some of whom left the day of the announcement while others will stay for a month.

    I’m not saying that the cuts aren’t needed. The brinksmanship by some newsrooms doesn’t serve the journalism either. I’m just curious about how this innovation will work. How far along are the innovations? Will there be some before the next round of cuts? Are Zell and Singleton cutting away, just to make it to the next quarter, while wondering why the newsroom hasn’t come up with any innovations yet? Am I reading that right? The industry needs a revolutionary idea on a bigger scale than USA Today was, but even the owners who talk of innovation are operating as if they won’t make it to the end of the month.

  • http://blog.daylife.com/ Matthew

    @Jenny. You cannot deny that even Sacred ‘Alta is for Skiers’ has been influenced by the snowboarding culture; they even have rails now — but that’s neither here nor there because it’s the terrain at Alta that would seriously inhibit the utility of snowboarders at the hill (High Traverse, Ballroom Traverse, Catherine’s Area run-out, all the run-outs to Supreme base, getting to High Notch, etc). Compare that to, e.g., Deer Valley. Why does Deer Valley not allow snowboarders? For the same reason they won’t allow a “buddy” pass to be used by someone skiing in blue jeans: an arbitrary resistance to change; an ardent adherence to Stein Eriksen; to keep a culture in stasis; to cater to a niche audience, etc.

    It boils down to if an old platform can be *bettered* by a novel platform, then why not adapt or at least experiment?

    @Jay: “The biggest asset the Times has right now is its high-knowledge readers, the user base itself.”
    I couldn’t agree more. Now take that user base and harness it. Put it to use. In an earlier post Jeff talk about content strategists vs. editors and the difference/non-difference thereof. If there is any difference, it’s that an editor is not alone anymore, it’s the editor taking the users’ voices and presenting them in a striking manner. The editor is nor the sole proprietor of content any longer.

  • http://www.pressthink.org Jay Rosen

    Now take that user base and harness it.

    I’m told that Bill Keller just talked of that in a speech this weekend in L.A. (Friend of mine was there,) So that is a good sign.

    I also think it’s harder than it looks, harder to take the advice than to formulate it. And “harness” is probably the wrong way to look at this, although I understand how easily a metaphor like that slips in.

    When the Ft. Myers (Florida) News-Press got wind of possible corruption in a local sewer authority, they said to readers: Help us Investigate. Those are three pretty powerful words. And they worked.

    But at the New York Times…. when they investigate, there is nothing–no word–until there is something: bam, front page investigation. See Risen on warrantless wiretapping. This is a major cultural barrier. Tapping the user base makes sense. But from the perspective of Times newsroom culture it makes no sense. Why alert competitors (and targets) to what we are working on?

  • http://www.tyndallreport.com Andrew Tyndall

    Jarvis —

    Can you explain what the important differences are — business differences not content differences — between Reverse Syndication and the relationship local broadcast affiliates have with their network in television?

    Thanks — Tyndall

  • http://blog.daylife.com/ Matthew

    But at the New York Times…This is a major cultural barrier. Tapping the user base makes sense. But from the perspective of Times newsroom culture it makes no sense. Why alert competitors (and targets) to what we are working on?

    These are great points, also echoed b Jarvis in his initial post here (because they made it to the New York Times, they are the gold standard in news and information, and what maintains that standard maintains the Times) and my comments last night, glossed over many (all?) of the difficult problems underlying, well, all of this. Also, thanks for cutting me slack on the harness metaphor, sounds like you understood my point as I meant it.

    Bringing this conversation back to some of Jeff’s specific proposals, e.g.,

    I’d…cut the newspaper company into four: production, distribution, advertising, and content. I’d sell the first two (getting rid of huge amounts of staff and shutdown obligation)…

    This again is more easily said than done, but the idea could be bountiful for many players involved. In its best mode the staff that is “cut” adapts to the distribution model and is integrated therewith. Yes, idealism is often sought and it also involves radical change; it is also not easily implemented for that same reason. But the main point remains “The Times better change.” Does everyone agree — even at the Times — that this is true? That’s the first step, the next step is figuring out the new model(s).

  • http://www.buzzmachine.com Jeff Jarvis

    Andrew,
    Great observation. I’d like to hear your thoughts on that.
    One key difference is that both parties advertise on the content acquired by the network and distributed by the station. Perhaps that’s a good next step in this reverse syndication model: I’m a Tribune reader and go to the Times for international coverage and there I find ads from both companies. We could overcomplicate this quickly — as New Century Network, the failed newspaper network consortium did — and declare a Tribune reader a Tribune reader when that person goes to the Times anytime. I don’t like that because it acts as if a reader can be owned and it’s overcomplicated. Another variation is that Times content can appear on Tribune pages with Times ads; that’s the distributed way to think. Let’s try one of everything. We have to try something.

  • http://annbrocklehurstjournalism.blogspot.com AnnB

    Jenny D, you are right about About.com. I don’t know anyone who checks it out regularly or, if they did a Google search, and had a choice between an About.com source and another authoritative looking source would click on About.com. It doesn’t, as far as I can see, have a particularly powerful or attractive brand.

    I think the source of its revenues and profits is that it was one of the first companies to understand the new business of internet advertising and it rode the Google wave successfully.

    Still working with those 2006 annual report figures of 500 content sites, I would bet that there are something like 150,000 to 200,000 pages of either pure ads like this –http://chineseculture.about.com/cs/chinesecoins/ — and the one I linked above.

    If each of those pages can bring in $1 a day in PPC advertising that’s $150-200K in revenues per day or $55-75 million per year so you’re starting to be in the ballpark of About.com’s annual revenues. Now, of course, there could be fewer pages earning more, or more pages earning less, but you can see how it’s a good long-tail business with likely only a small fraction of the revenues coming from the content-heavy pages.

    That’s why Joe Blow can’t replicate the About.com model and bring in $160,000 ($80 million/500) per year in ads with a great content site optimized to be search-engine friendly. It’s because Joe doesn’t have the whole huge spam/MFA network of X-thousand pages along with the content so he’s earning pennies.

    As of late, Google’s been cracking down on the spam pages because, even though it earns them short-term money with every click on a Google ad on those pages, those pages have the bad long term effect of devaluing the whole internet advertising business.

    While the About.com model continues to deliver cash for now, there are real questions about its sustainability, which is probably why some analysts think it should be sold to a sucker willing to buy it. The loopholes it exploited in the new world of internet advertising simply aren’t going to exist in the future.

    Ironically enough, NYT’s Bits blog reported on the money in similar businesses, but didn’t mention all those About.com pure-ad (MFA) pages.

    http://bits.blogs.nytimes.com/2007/06/27/more-than-just-squatting-on-domain-names/

  • Mike

    You’re right about outsourcing distribution and production. Get rid of it now while it’s still worth something. Zell will get that done at the LA Times, but his only problem is union pressmen who make $65K+ per year. His pressmen across town at CCN make less than half that. It will be interesting to see how he will handle that situation.

  • http://blog.syracuse.com/newstracker Brian Cubbison

    It’ll be interesting to see who would buy the least attractive part of the business.

  • Mike

    I think that Zell wants to print all the papers in SoCal including the West coast versions of NYT and WSJ. The Times has the capacity, but their labor costs are sky-high.

  • http://www.pressthink.org Jay Rosen

    Jeff’s best idea is using the Globe to experiment radically, and then using the results to re-structure the Times. The problem: Arthur Sulzberger, Jr. would have to execute it. I have seen no signs that he is capable of such.

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  • http://blog.daylife.com/ Matthew

    @Brian: It’ll be interesting to see who would buy the least attractive part of the business.

    I agree this would be interesting. In one sense the least attractive part of the business could have the most to gain, and thus a market is certainly there and profitability is still there. Since we’re talking about production and distribution, we’re probably looking at several buyers in a variety of markets, but don’t let that pull you out of the discussion; Jeff’s idea here leaves content and advertising in its newspaper-media domain, with the caveat that the content & advertising does not always come from the papers. Hence the radicalism involved.

    @Jay: The problem: Arthur Sulzberger, Jr. would have to execute it. I have seen no signs that he is capable of such.

    I do not want to pretend to know anything substantive about Sulzberger other than he’s a Times Family Man so I am asking in earnest: in your view is there a way to execute the experiment, or specifically, are there other manners the Globe could become the petri dish of the Times, perhaps on a smaller scale than Jarvis presented?

  • Bill K.

    AnnB makes a good argument for selling About.com–let me look at it another way.

    Each topic is covered by *one* person. At least with the Wikipedia you have crowdsourcing to provide some balance. If the Wikipedia cannot be cited as an authoritative source, I would be more circumspect about anything posted on About.com.

    If you were considering selling About.com, now is the time to do it. It’s value is based on the traffic it generates, at least for the present. I don’t see their strategy for the future, how they plan to adapt as we move past Web 2.0, or compete against dedicated initiatives such as Google Health.

    The NY Times should stick to their knitting: news and feature reporting. The ideal strategy for presenting encyclopedia information, which is About.com’s domain, is still emerging. If you’re cynical enough to believe that profession of journalism is evaporating, I would imagine that you’d look for a new solution, not stick with an old model.

  • http://www.tyndallreport.com Andrew Tyndall

    Concerning the distinction between network affiliates and reverse syndication —

    It is hard to push the analogy too far because of two fundamental differences between business relationships in the era of broadcast mass media and the distributed, fragmented, user-driven, present day. Those two differences are, needless to say, that a broadcast network used to operate in a now-disappeared environment of scarcity and monopoly. Advertising inventories were finite; and affiliates delivered network content exclusively.

    That having been said, the relationship between the network and the affiliate can still be thought of as a crude form of reverse syndication — or reverse syndication can be thought of as a pale evocation of the affiliate structure.

    The affiliate sacrificed much of its ability to monetize its own audience by directing that audience to content that was controled by the network, knowing that the quality of that content was superior to what the affiliate itself could produce because of the network’s economies of scale. The network provided content of national and international scope; the affiliate supplemented it with local content, whose revenues it did not share with the network.

    The network, taking advantage of the eyeballs directed to it by its affiliates, offered one-stop-shopping to Madison Avenue, offering advertisers economies of scale that affiliates are unable to achieve alone. In return, the networks allowed the affiliates to retain a proportion of their advertising inventory for local sale, even as they took advantage of the larger audiences that the network’s superior content delivered.

    In recent years the broadcast networks themselves have been operated virtually as loss leaders, using all of their revenues to produce content, none for profit, and relying on their ownership of their own affiliates in the nation’s most lucrative markets for those profits. Thus the networks have, in effect, been subsidizing the operation of their non-owned-and-operated affiliates for the sake of building a national footprint that could allow them to make similar profits from that portion of the network represented by their own O-&-Os.

    We are now nearing the end of the broadcast network affiliate model, as viewers seeking national content online can go directly to the network without having to be directed there by the local affiliate. I do not visit Channel Four’s Website in order to see NBC News video; I can go directly to msnbc.com. Interestingly if one obtains a video from abcnews.com it uses cookies to append the ID of the local affiliate to its URL, so ABC, at least, is trying to preserve some Reverse Syndication bookkeeping as part of its online operation.

    Reverse Syndication, nowadays, would not have the obvious value that the link between networks and affiliates had in the last century. But even in its diluted form, it seems to me that your model — the distribution of expensive content from a central core and the direction of local audiences to the central core — has reminiscent echoes of the broadcast system.

  • http://www.gansevoortmedia.com Henry Scott

    Jeff:

    I started to read your piece prepared to moan about another New Media guy making another unrealistic recommendation about a business he doesn’t understand. But you know what? I think your suggestion is, as the Brits would say, spot on!

    It’s really all about The New York Times Company figuring out what it does best and getting rid of everything else. And yes, I think what it does best at its flagship newspaper is national and international news. And what it does best at the Boston Globe is local news. The IHT is an ego play that doesn’t make sense financially. The regional newspapers were an ill-conceived effort many years ago to diversity the company’s sources of revenue by investing in faster-growing markets, primarily in the South and West. Not much diversification really. And no synergies.

    Testing a separate Sports section also is a good idea. When I was at The Times way back when, we struggled with how to let people buy just the sections of the newspaper they wanted to read. That couldn’t be done then for two reasons 1) legacy production and distribution systems made it impossible to customize the newspaper for individual buyers, and 2) the business model required aggregating the largest number of readers possible for each edition to support ad rates, which is why sports is packaged with bridge, politics, entertainment, and recipes. A digital version of The Times eliminates those concerns.

    You also are right on about separating the production and distribution operations. Airlines no longer own their own airplanes — they lease them, freeing up valuable capital for other purposes. Newspapers should do the same with presses (and in fact, some are: check the San Francisco Chronicle). The Times essentially has outsourced distribution by handing if off to a company it largely owns — PCF — which also distributes other products.

    The only place where I disagree with you is your insistence on giving readers more of a voice in what the newspaper offers by way of content. I guess I’m an elitist, and I really don’t care what the majority of people want to read. I want my content selected and edited by super-smart people who save me time by not exposing me to pointless blather.

  • Timesman

    Now take that user base and harness it.

    Yes, Keller wants it to happen at the Times. But what, specifically, should journalists at the Times ask its users to do? Let’s hear some very concrete next steps. We’re listening.

  • http://www.pressthink.org Jay Rosen

    That’s going to make the believers in pointless blather hopping mad.

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  • http://www.buzzmachine.com Jeff Jarvis

    Timesman,

    See my response to your challenge above.

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  • http://www.innovationsinnewspapers.com Juan Giner

    Jeff,

    What about a free website from Monday to Friday and keep just printed editions for Saturday and Sunday?

    Juan Antonio

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  • http://www.buzzmachine.com Jeff Jarvis

    Juan,
    I like the idea of weekend-only printing (sunday-only in the U.S., where Saturday papers are the thinnest of the bunch). But wouldn’t the company then need to keep some production and distribution resources it otherwise wouldn’t need? Wonder what the P&L would look like on this.

  • http://www.innovationsinnewspapers.com Juan Giner

    Jeff,

    Outsource printing and distribution.

    These are not core business.

    In Madrid, 20 Minutos the leading Spanish newspaper has an on-off line integrated newsroom that during 75% of the working day is focused on the website, and in the evening produces the free print paper.

    In the same way, let’s keep the NYT newsroom working 75% of the time for the website on weekdays and produce on weekends the paid print editions.

    INNOVATION’s Carlo Campos, a former McKinsey consultant, has been for many years talking to me about this 75/25% model.

    If The New York Times follows his idea, believe me, a newspaper world revolution will follow too.

    What do you think Carlo?

    Juan Antonio

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  • Vernice Walck

    Mindblowing IDEA . These are the common and simple way and anyone can do it no need any kind of speciality.

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