Posts about newsbiz

One newsroom, two newsrooms, or none?

There is a debate in the land of newspapering: Should print and online operate separately or together? Jay Rosen argues today that in the recent kerfuffle at The Washington Post, he sees benefit in separation. And you’d think I’d agree, since I set up separate operations when I was at Advance.net. But I don’t think I do, not anymore.

The commonly held wisdom — or rationalization — among those of us who took separate routes is that we needed to create autonomous operations so that the online staff could do what was appropriate for this new medium (like enabling interactivity) and so that the online brand and bottom line would not be shortchanged in ad deals as merely value added. And I think that was true.

But it is also true today that if newspapers themselves do not change radically to embrace the future, they will become things of the past. So I have argued that newspapers have a choice: Either totally upend newsroom culture and get people to face the strategic imperative of gathering and sharing news in new ways across all platforms … or move most of the staff to online — where the audience is now and revenue growth, if not equivalent revenue, will be — and leave the dinosaurs behind. But if you take the former course, if you take the challenge of exploding the newsroom, then you probably have to give those people control for all the products and hold them accountable for audience growth and satisfaction and for keeping up with all their new competitors, small and smaller. And if they can’t do it, then you get new people who can. Quoth Yelvington once more: “It’s time to change your people, or change your people.”

Jay argues persuasively that in l’affaire Froomkin, the ability of online monarch Jim Brady to make appropriate decisions for the dot-com apart from newsroom king Len Downie is productive:

They’re not equals (780 in one newsroom vs. 65 in the other; fewer than one million subscribers vs. eight million users), but Washington and Arlington have their own spheres. Over the newspaper and reporting beats Len Downie is king. Over the website Jim Brady is sovereign. Over the user’s experience no one has total control. There’s tension because there’s supposed to be tension. It makes for a more dynamic site.

Well, but it also makes for blinders aside the eyes of the newsroom princes. That is why Post political editor John Harris thought he could be so haughty as to publicly scold his online colleagues for not following his rules and for embarrassing him with his White House, even snaring the — what shall I say, unsuspecting? — ombudsman in his crusade.

No, Harris and company do not need to confront the online people. They need to confront the future. They need to confront the fact that more readers read the online product. They need to confront the fact that the economics of news are changing, whether they approve or not.

I once had an argument with an editor of People who wanted a redesign to do what technology at the time — and logic — could not do. He kept stomping his foot: If I want it, it must be so. Make it so! I kept explaining why it could not happen. Round and round it went until finally I snapped, “Jim, damnit, I’m not your enemy, reality is.”

The people in the Post print newsroom acted as if the online newsroom were their enemy. No. Reality is.

: So are The New York Times and USA Today right to combine newsrooms? Only if they blow up the newsrooms in the process and force every journalist at every desk to reinvent not only the product but also the process of news — and reinvent themselves as they do it. An organization chart is not the answer. An attitudectomy is.

When I visited with The Guardian’s management, I found an impressive cultural change already underway: The print folks and online folks together worried that they were behind,that the digital age was well underway and they were still trying to hop on. They didn’t try to alter reality. They wanted to get ahead of it.

That cultural change is what matters, not whether there are one or two newsrooms.

In fact, I’ll argue that there should be no newsroom. Now you may have thought that the reference to no newsrooms in the headline above was another smart-assed prediction of the fall of papers. Not at all. Instead, it’s a suggestion: Just as you should stop thinking of your product as paper, as a thing, so should you stop thinking of your operation as a room.

The old saw in designing space for a business is that you should give the sales department as little space as possible — or no space at all — because, after all, aren’t the sales people supposed to be out there, selling?

So shouldn’t the same be true for newsrooms: Give the reporters no space, have them live out of their laptops, so they are out there reporting? Now go the next step: What if some and soon much of the news doesn’t come from reporters — allowing the reporters to concentrate on what they do best, on their real value, reporting — but from the people we used to call readers? And what if the people help edit too (see: Digg)? What if there is no newsroom? Or rather, what if the newsroom is the community and the community is the newsroom.

OK, I just went to far. It’s what I do now: I push the point to make a point. At a recent breakfast with pr execs, a sage news exec — guess who — defended me at such a moment, saying it’s now my role to push the imperative and it’s still their job to get their jobs done. I was grateful for the defense, particularly from him.

But I also went to lunch last week with a print editor/friend I now like to call Fred Flintstone who challenged me back and said, ok, after resisting the Gospel according to Jetson, he was now ready to sign up and build a new future. But how? How, exactly? It’s fine to talk theory but what’s the reality?

He was right to push back and since I now spend so much time in this space with abstractions that will make fine book chapter titles but not blueprints — but since I also have faced the specific practical challenges of merging newsroom views if not newsrooms — then I need to get more practical: Mouth, meet money.

So I hope to start writing a series of posts with explicit suggestions for news organizations. Take them for what they’re worth. Oh, I’ll argue that there are actually lots of practical suggestions amidst the 9,009 posts that precede this one (yow, that guy can blather!). But I can see how the forest can get lost for the kudzu. So I’ll write some posts that are at least more direct. Starting shortly with suggestions about how to merge those newsrooms… but first, how to scare them….

The emperors’ new underwear

When I said I wanted to see more transparency in newspapers, I didn’t mean that they should be sharing their family squabbles…. though I am glad they are, for it’s just so entertaining.

I’m already over the Froomkin kerfluffle but I’m amazed at the newsroom sniping that’s coming out in public. See Brad DeLong’s incredible phone interview with Washington Post political editor John Harris:

Q: So you knew [Ruffini] had been a Republican operative in 2004, and didn’t tell that to Jay Rosen?

A: [Ramble of which I caught only scattered phrases] But assuming you aren’t posting this at least immediately… A good relationship between the print Washington Post and WPNI… Happy to answer privately… Really don’t want to be quoted on the record… If you want to call me an idiot without my response, that’s fine…

A: No I want your response.

A; [stream continues] But I shouldn’t respond… I’ve promised people I won’t respond… We need to cool this down… It’s a really a very narrow issue: are there people confused about Froomkin’s role…

This is followed by the editor first going off the record and then refusing comment. Journalists should be the last people to do either.

: Now go to Ken Auletta’s New Yorker story about tsuris at the New York Times with some deft slipping of shivs between the shoulder blades of executive editors: Keller v. Raines v. Lelyveld. Most entertaining.

: Some are positioning l’affaire Froomkin as political: See Kos. Others are gamely trying to laugh it off as a turf war over a home page. See Aschenblog. Some see it as resistance to change: See Yelvington — “It’s time to change your people, or change your people.” I see it as that and as a war of journalistic worldviews about alleged objectivity vs. transparency.

But a wise editor I know said it better in an email: “The elbows are getting very very sharp right now.” And the reason is that the business is shrinking and the print guys and online guys — forced together in newsroom meetings and mergers — are like dogs growling and snapping over that last scrap of meat. When the going gets tough the tough get snarky.

Newspapers as charities, utilities, infrastructure

In the panic over the possible sale of Knight Ridder’s papers, some are grasping for new business models that aren’t business models at all: They are suggesting that newspapers should be taken over by charities or — this is new to me — even viewed as public infrastructure. I understand the nervousness and the need to seek alternatives — especially in the face of news that the dreaded Carlyle Group may be a buyer. Welcome to The Philadelphia Daily Fair & Balanced.

The Daily News’ Attytood blog has been lighting candles, crossing fingers, and blogging incantations in hopes that the local Pew Charitable Trust might take over the paper, following the example of the Poynter Institute’s benevolent ownership of the St. Petersburg Times. White Knights, indeed.

If that happened, it would be a fine thing for Philadelphia. But it is by no means the solution for the problems of newspapers today. Indeed, I think it is a dangerous dream, for it continues to separate newspapers from their publics, their markets, their real masters.

: Now see Editor & Publisher, which gives us what I think is a naive view of how to save papers: Turn them into charities, with legislation to give tax breaks, even.

Joe Mathewson, who, amazingly, teaches business journalism, dismisses those of us who argue that the marketplace matters.

But does “healthy” have to mean “profitable”?

Let’s dream for a moment about newspapering freed from the profit motive. Purists may argue that newspapers, like any other enterprise, should have to earn their way in the marketplace, and if they fail the market test, so be it.

But in fact newspapers, as important to the civic health of our society as public transportation, have a claim on public allegiance that goes beyond financial measure.

Newspapers as infrastructure? That’s a new one to me. We’ve seen them portrayed as everything up to religion. But newspapers as roads and buses? Sorry. I don’t buy it. News comes in many forms, in many media, and there is no law of nature or principle of democracy that says a paper is public infrastructure that should have public support. In fact, I’ll argue that is another dangerous dream, for it potentially puts journalism and free speech at the mercy of government support and thus government control, which should be the last thing we’d ever want.

Mathewson wants legislation to make it happen:

There are two tax-favored models before us: public broadcasting and real estate investment trusts. Some rather simple tax legislation would be required, available solely to newspapers, not to broadcasters or to companies that own both — which incidentally would free these papers to cover the federal government without fear of jeopardizing their corporations’ interests at the Federal Communications Commission. Such special legislation wouldn’t be novel, for Congress long ago recognized the importance of healthy newspapers when it authorized joint operating agreements as an exception to the antitrust laws.

A newspaper company, like a public broadcaster, could be organized as a not-for-profit, tax-exempt corporation. It could still sell papers and advertising, it could still develop new Internet revenues, it would still pay market wages and salaries (or maybe better), it could re-invest in improving its own staff and facilities and operations, it just couldn’t make a profit. And it wouldn’t pay taxes or dividends….

But if the owner is an otherwise-profitable company, a deductible gift might do more for the bottom line than a fire sale. Congress could encourage such donations by allowing the company to deduct the full value of the newspaper as a charitable contribution, creating a special exception to the current ceiling on corporate gift deductibility, which is 10% of taxable income.

Another possible transition from for-profit to not-for-profit might be a buyout and donation by civic-minded wealthy individuals or families, the same folks who give millions to build a new library or a new hospital wing…. Facilitating this, too, would require an amendment to the tax law, to waive for this purpose the 50-percent-of-adjusted-income ceiling for personal tax deductions — just as Congress did for 2005 contributions to Katrina relief, and all other 2005 charitable gifts.

Law enforcement might help in this. When Larry Ellison of Oracle was charged by the state of California with a securities-trading violation, he settled by agreeing to donate $100 million to charity. That would have been enough to buy a good-sized newspaper and donate it to a not-for-profit, maybe even endow it.

Mind you, these are still businesses with considerable margins, albeit margins that will be sure to shrink. And there are plenty of other means of providing news: online, radio, TV, magazines.

And I’ll fret again that newspapers are in the pickle they’re in because they have operated as isolated monopolies. Make them isolated charities or publicly supported utilities and you’ll have disasters.

: Note that the Carlyle Group is, at the same time, looking to buy a hunk of Dunkin Donuts. They’re just cash cows.

: Note also that Knight Ridder’s paper in Akron is running out of pencils. Maybe they should find a few and try selling them on streetcorners. New revenue streams.

Newspapers as mainframes

I believe that newspapers are and should be businesses, that market pressure is not only good but necessary, for newspapers are all about serving the public and if the public doesn’t want them, well, does that tell you something? The problem is that newspapers became monopolies, which made them fat, sassy, snotty, and lazy. See this very good post by a technologist turned VC who worked at the embattled Knight Ridder about newspapers as mainframes:

The short-form story in the modern history of computing is the deconstruction of the mainframe. Nothing in computing exists today that did not exist in some precursor form back in the original mainframes. The evolution of computing is the continuous unbundling of each of the components, cost reduction and miniaturization, and subsequent empowerment of the user at the point of delivery. Newspapers are Mainframes. The transformational power of the Internet lies in its incessant pressure to unbundle….

The business model of the newspaper is based on two principles – network effects and bundling.

The network effect is the classifieds business. The reason there is only one major newspaper per city, nearly everywhere, is that the classifieds business is a winner-take-all business. This made newspapers ‘natural monopolies.’ The net effect of the natural monopoly was that the competitive pressure for innovation disappeared. How many industries can you name where the product form, features, and delivery has not changed in 75 years? The marketing gene was largely bred out of the industry by becoming local monopolies. Monopolies fail catastrophically because of their inability to respond when the competitive landscape changes dramatically. This is the incumbent’s disadvantage. The very immunity to competition that made newspapers such great businesses also created resistance to market forces.

The bundling is the aggregation of all the varied content to attract and retain the audience. The core premise is you’ll read some content regularly, not necessarily all content….

But the Internet is that ruthless and incessant force for unbundling. Everything is a click away. Search costs are crushed.

Newspapers are Internet victims, but they are far from being the only industry under siege. Newspapers are especially impacted because two of the three main components of their cost structure are obsoleted. Advertising sales moves from traditional ‘push’ to advertiser self-service. All the physical assets of printing and delivery are obsoleted by the shared infrastructure of the Internet. If most of the cost structure goes to zero value, what’s left are news gathering and editing organizations and IT.

I like that: A newspaper is an IBM 360. A blog is an Apple 2. Go read the rest. Then see the post above about people trying to see newspapers as something other than businesses.

Journalism.biz

Rebecca MacKinnon says that journalism schools need to teach students to be more entrepreneurial. I agree that that’s why I added an entrepreneurial course that I will teach to the curriculum of CUNY’s Graduate School of Journalism (you won’t find it online; it’s new).

The idea is that students need to create a new journalistic product. These could be businesses the students start when they graduate (and because they may have the next Google in mind, this will be the one course I won’t webcast) or a product they could start in an existing media company (because they are all woefully short on R&D) or even a charitable endeavor (but even in this case, they need to show why people would give money to make it work).

Says Rebecca:

American journalism is in crisis. What a wonderful opportunity we now have to rethink the whole industry. The question is: Even if journalism schools do train the future’s journalists to innovate and think outside the box, will today’s news organizations be prepared or willing to take advantage of their fresh ideas?

I find it pleasantly ironic that while some in journalism wish it weren’t a business, others want to train journalists to be better at business. Count me in the second camp and see my other posts on the topic today.

Defending the money guys

Brian Horey, general partner of Aurelian Partners, does a good job defending Knight Ridder’s investors in emails to Dan Gillmor.