Posts about jrc

The storyteller strikes back

When I dared question the article’s monopoly as the atomic and only acceptable form of news, I honestly did not imagine the reaction I would get. I thought I was observing a trend and an opportunity. I have tried to provoke plenty of times. But here I truly did not think I was saying anything provocative. But clearly, I plucked a nerve. I’ve been asking myself why I evoked such a strong emotional response, online and off. At Jeff Pulver’s 140 Conference in New York this week, I endeavored to answer that.

In a performance that well demonstrates that I should not quit my day job and hope for a career on Broadway, I tried to take on the voice — in a purposefully simplistic, over-the-top way — of the storytellers who objected to what I was observing. Here’s what I think they were saying: “You can’t have a narrative without the narrator, a story without the storyteller. I am the storyteller. I decide what the story is. I decide what goes in it and doesn’t. I decide where it begins and where it ends.” That’s part of the issue: control. But it’s more than that: “If you don’t need as many articles — if there are other ways to impart information — do you still need me, the storyteller?” That, I think, could be at the heart of their fear and reaction.

Once again, I’m not getting rid of the story, not replacing it or the storyteller. I’m arguing that articles are precious, more precious than ever, and need to add value or we can’t afford to waste our time on them. I’m saying that the journalist takes on new roles and more tasks. But, yes, if as a journalist you see yourself only as a storyteller, a maker of articles, your horizon just got closer.

At 140, I told the room and the cameras that I see something else happening. I referred once again to the Gutenberg Parenthesis, coined by the University of Southern Denmark to describe how the change in our media affects our cognition of our world.

When people say they like newspapers and books they aren’t just talking about the physical form of them: the feel and smell, the portability and tangibility. They are talking about the finiteness of them. Articles and books have beginnings and ends; they have boundaries and limits; they are packaged neatly in boxes with bows on top; they are a product of scarcity. Abundance is unsettling. That is precisely why the internet is disruptive not only to business and government but to culture and cognition. Threatening the dominion of the article is to threaten our very worldview.

You see, I am trying to understand the visceral reaction to what I said. It took me by surprise.

I asked the folks at 140 not to kill the article but to question assumptions about it.

I may live to regret embedding my talk (I haven’t had the courage to watch it yet), but here it is:

Then I got to introduce my friend John Paton, who is challenging assumptions about the form and business of journalism:

Hard economic lessons for news

I’m working on a talk that I hope will become the canonical link to my essential message about the business rules and realities of news. I continue to be astonished at the economic naiveté I hear in discussions of the business of news. (Look at this comment thread and and this one.) Here is my answer, the basis of a talk — to be delivered in tweets, in the model of John Paton — and a lesson for my classes. Work in progress. Thoughts so far; please join in….

RULES FOR BUSINESS MODELS

* Tradition is not a business model. The past is no longer a reliable guide to future success.

* “Should” is not a business model. You can say that people “should” pay for your product but they will only if they find value in it.

* “I want to” is not a business model. My entrepreneurial students often start with what they want to do. I tell them, no one — except possibly their mothers — gives a damn what they *want* to do.

* Virtue is not a business model. Just because you do good does not mean you deserve to be paid for it.

* Business models are not made of entitlements and emotions. They are made of hard economics. Money has no heart.

* Begging is not a business model. It’s lazy to think that foundations and contributions can solve news’ problems. There isn’t enough money there. (Foundation friend to provide figures here.)

* There is no free lunch. Government money comes with strings.

* No one cares what you spent. Arguing that news costs a lot is irrelevant to the market.

* The only thing that matters to the market is value. What is your service worth to the public?

* Value is determined by need. What problem do you solve?

* Disruption is the law of the jungle and the internet. If someone can do what you do cheaper, better, faster, they will.

* Disrupt thyself. So find your weak underbelly before someone else discovers it. Or find someone else’s.

* The bottom line matters more than the top line. Plan for profitability over revenue, sustainability over size.

REALITY CHECKS FOR NEWSPAPERS

* Circulation will continue to decline. There can be no doubt.

* Cutting costs will reduce product quality and value, which will further reduce circulation, which will further reduce ad revenue. A vicious, unstoppable cycle.

* Low-cost competitors and abundance will continue to reduce the price of advertising.

* Local retail will continue to consolidate, further reducing ad revenue. Blame Amazon.

* Classified categories—real estate, auto, jobs, merchandise—will continue to become more self-sufficient. They will need market mediators less and less.

* There’s a cliff coming: the end of a critical-mass of circulation needed to maintain inserts. That will have a big impact on newspapers’ P&Ls and will take away a primary justification for still printing and distributing paper.

* Some readers are not worth saving. One newspaper killed its stock tables, saved $1 million, and lost 12 subs. That means it had been paying $83k/year to maintain those readers. In creating business plans, the net future value of readers should be calculated and maximized.

* Once fixed costs are sliced to the bone, they will rise again. Cutting alone does not a business strategy make.

* “The newspaper model is broken and can’t be fixed.” Says John Paton.

DIGITAL RULES

* Scaling local sales is the key challenge. Google will pick low-hanging fruit from the 6 million businesses that have claimed their Places pages. Facebook’s fruit will be businesses that use its free Deals. Each will use distant sales. Groupon and Patch will attack the challenge with the brute force of local sales staff.

* There will always be new competitors. For content, attention, advertising, and advertising sales.

* You no longer control the market. You are a member of an ecosystem. Play well with others.

* Abundance will drive down prices in digital even more than in print. That’s the lesson Google tries to teach media (and government).

* The question about pay walls is whether they are the *best* way to make the *most* money. It’s not a religious matter. It’s a practical question of whether circulation revenue will net more than equivalent advertising, whether one can afford to give up audience and growth, what the costs are to support pay.

OPPORTUNITIES

* Scaling local sales is the key opportunity. I think the answer will lie in productizing services for local merchants (across all these platforms — not just selling them space in a media site but also helping them with Google Place pages and Foursquare and Facebook deals and Twitter specials) and establishing new, independent, entrepreneurial sales forces. The key challenge then will be holding down the cost of sale and production.

* There is huge growth potential in increasing engagement. Facebook gets roughly 30 times the engagement of newspaper sites, Huffington Post’s engagement is also a multiple of newspapers’. If we are truly community services, then we must rethink our relationship with the public, becoming more a platform for our communities, and that will multiply engagement and, with it, audience, traffic, and data. We have not begun to extend and exploit the full potential of the value news organizations can have in relationships with their communities: more people, more value, more engagement equals more value to extract.

* There are still efficiences to be found in infrastructure. If the presses and the distribution and sales arms of papers are not in and of themselves profit centers, they should be jettisoned and their tasks outsourced. If other tasks — including editorial tasks — can be consolidated, they should be.

* Journalists should do only that which adds maximum value. That’s not telling the public what it already knows. It’s not exercising ego. It’s not production. It is reporting, vetting, curating, explaining, organizing, teaching…. Do what you do best and link to the rest.

* There is growth to be found in networks. The more members there are in the ecosystem, the more content there is to link to (without having to go to the cost of creating it), the more opportunities there are for free promotion (links in), the more opportunities there are in aggregated and joint sales. See our work on new business models for news in the local ecosystem at CUNY.

* There are efficiencies to be found in collaboration. Working with the community and with other members of the ecosystem enables a news organization to specialize and increase value and to do more with less.

* There are other revenue streams worth exploring. Local bloggers are making considerable shares of their revenue in events. Newspapers are going into the real estate business and are also selling merchandise.

* We have not begun to explore new definitions of news.

: Note: I rearranged a few of the rules and combined two into one for better organization.

: Was mit Medien translates these rules into German. And translated again.

Independence day for newspapers

Today Journal Register, a newspaper company, declared its freedom from old publishing methods and old journalistic methods. The company’s 18 dailies published today, July 4, using nothing but free, web-based tools. And they involved their communities in their journalism in new ways. They call this the Ben Franklin Project.


Here’s their VP of content, Jon Cooper, reporting on the work of the project in each paper (my emphasis):

The difference between how these stories are usually written and how they were written for today is the process. In many cases the stories reported as part of the BFP began with the audience. The people who are usually last in line were moved to the front of the process. Rather than just being able to read the finished product, the audience – through town hall meetings, social networking sites, direct requests via email and in person and more – was asked to help determine what the editorial staffs should cover.

This took the in-company collaboration to where it needs to be – collaboration between the audience and our organizations. To truly serve the communities in which we live and work we must be part of those communities. We must be connected to those communities. We must listen to those communities. And, we must be help accountable by those communities.

And here’s their CEO, John Paton praising his staff for their accomplishment:

On this Independence Day, you have declared that our Company’s future will be freed from expensive and restrictive proprietary publishing systems but more importantly that our Company will be freed from the old way of thinking about how we do business. You have ensured we will become a Company with a future and one that will continue in its mission to serve our communities with compelling local journalism.

And while the tools you have found and adapted are an achievement, it is our new approach to journalism which is the true revolution here. The Ben Franklin Project is the beginning of a new era of an open and transparent newsgathering process. Our publications harnessed the power of their audiences to tell stories of importance to their communities. Those stories ranged from childhood obesity to property taxes.

This is all the more remarkable because Journal Register is an oft-bankrupt, long-neglected, poor waif of a newspaper group that is suddenly seeing new life under the leadership of Paton, who is bringing his precepts and success from Spanish-language publisher ImpreMedia — digital first, print last — to this company. I’m advising him (along with my friends Jay Rosen, Betsy Morgan, and Jim Willse).

It was only a few months ago that John and I sat in my office at CUNY and he told me about the laughably deplorable state of technology in the company he’d just taken over. He said they still have VDTs. If you came into the news business after about 1980, you’ve probably never heard the term and assume it’s something cured with a shot. Video display terminals hooked into old mainframe publishing systems were how we published starting in the ’70s (I’ll date myself badly and say that I started on them at the Chicago Tribune in 1974). They were replaced in the ’80s and ’90s by PCs. But JRC still had them. That’s how bad it was.

Paton told me he was looking at having to spend $25 million just to get the company’s technology up to date. Hold on. We took to the white board and brainstormed how one could publish a paper today using Google Docs, Flickr, and WordPress. Paton, as is his habit, took my bull(shit) by the horns and ran with it. His staff found other, better free tools to do everything (even advertising). He printed one test edition of a paper to prove it could be done. Then he decreed that all his dailies would do this on one day, on July 4. More important, he used this as a means to get the staffs to think differently about their relationships with their communities, to act differently in how they made journalism. And they did it. Theyr’e not dealing in some theoretical future of news talked about by consultants and professors. [cough] They are building it.

A friend of mine who’s met Paton [that's Mark Potts] asks why it took the newspaper industry 15 years to get a Paton, a leader with the guts to see a new future for the business rather than merely trying to protect the past. I don’t know but I tell news executives around the world to watch what’s happening at humble JRC. There’s a future there.