Posts about newspapers

News(paper)

Friend Michael Rosenblum forwarded word that the Star-Ledger in New Jersey was just nominated for seven local Emmys for its video work. Bravo for my old friends there and for Rosenblum, who trained them .

I remember when my old colleague Jim Willse, then editor of the Ledger, told me he wanted to get the paper into video and I begged him not to do what other papers had done: turn out pale copies and unintentional parodies of local TV news, something that deserves no emulation. I introduced him to Rosenblum, who came in an politely toured the TV studio the paper had just built and then said, “This is bullshit.” Nobody wants to see fake TV, he said. The newsroom is the story; it’s where the action is. So he had them set up cameras in the newsroom and he trained staffers to make video stories with a small camera and a Mac. I’ve watched my own students learn the Rosenblum Method and come out empowered, like the Ledger’s old paper people. Yes, anyone can make TV.

If I had it to do over again, I’d do one thing differently: bring in ad people to train them so they would understand the power of making TV and would sell it to advertisers and make video for them: so they, too, would think video.

Media’s evolving spheres of discovery

Here’s another in an occasional series of posts to that try to examine, explain, and illustrate the new structure of media. This one looks at how we discover content now.

Back in the day, a decade (to 50 decades) ago, we discovered media — news, information, or service — through brands: We went and bought the newspaper or magazine or turned on a channel on its schedule. That behavior and expectation was brought to the internet: Brands built sites and expected us to come to them.

Now there are other spheres of discovery — new spheres that are shifting in importance, effectiveness, and share. I believe they will overlap more and more to provide better — that is, more relevant, timely, and authoritative — means of discovery. These evolving spheres also change the relationships of creators and customers and the fundamental economics of media.

Start with brands. They decide what we want or should want and they succeed or fail based on that judgment. (They also succeeded because they controlled distribution and access.) They create the content and bear the risk. They depend on critical mass and economies of scale. One-way, one-size-fits-all, fleeting — these are the characteristics of branded media. Brands are disrupted by the spheres that follow, which disaggregate and disintermediate them, challenge their authority, compete on much lower cost bases (thanks to automation and collaboration), and provide better targeting and relevance (thanks to new means of gathering and analyzing data).

Next came search. Fundamental to search’s impact is that it shifted media from supply side to demand side: We, the people formerly known as the audience, initiate the sequence of a media transaction. In branded media, creators, editors, and producers decided what they’d give us and then we bought or didn’t. In search, we begin with our needs and curiosities. That theme of a reversed sequence carries through to other spheres. Search also provided the means to intuit intent and improve relevance, which is what feeds its higher value. Once a large universe of content became available to us all, value shifted from creator to curator. Content wasn’t scarce; organization was. The definition of scale was also upended: small could now succeed — highly specialized media can find its highly targeted public — but big became bigger than ever (see: Google). Search also commodified brands; it didn’t matter so much where we found an answer so long as we could search for it.

AlgorithmsGoogle News or Daylife (where I’m a partner) — also meet the organizational challenge of abundant content and they tackle the challenge of timeliness. For search to infer content’s relevance, it must gather data from our use — that was Google’s key insight — but that won’t work for news, whose value is perishable. So algorithmic aggregators use other signals — source, content analysis, timing, location, association — to cluster and present coverage in a nest of relevance. These algorithms enable content to coalesce into stories and topics that search will find because it gains depth and attracts links and clicks. Algorithmic aggregators exposed a key conflict in old v. new media worldviews: The old-media view is that aggregators extract value from content by displaying it; the new-media view is that they add value by creating audiences and causing links — this is the essence of the misunderstanding of the link economy.

Thanks to new tools — Twitter, Facebook, Buzz — human linksare exploding as a means of discovery, which gives lie to the old-media complaints of Rupert Murdoch et al that aggregators are stealing their content. When your own readers recommend and link to your content, is that stealing? Do you want to turn those people away and call them worthless? Facebook, according to Hitwise, is the fourth largest referrer of audience to media. Bit.ly alone causes two billion clicks a month, double Google News’ impact. Soon Buzz will be causing many links (teaching Google what’s hot and relevant, which is a key reason to start the service). And, of course, bloggers have shown the way as curators. Thanks to our newer, easier tools that enable links, humans are becoming a huge force in content discovery, reducing search’s and algorithms’ share and dominance.

Now we need to better understand the quality of those links and linkers. Clay Shirky craves algorithmic authority. Azeem Azhar is one of many entrepreneurs trying to systematize the annointing of more authoritative tweeters (read: linkers) at Viewsflow. On the latest This Week in Google, Google’s Matt Cutts talked about efforts to find more signals of quality so it can send us not to the crops of lowest-cost content farms but instead to original work. (The good news is that quality will out.) In the link economy, sending traffic to original work becomes an ethical imperative as links are the means to support that work. But it’s an old-media mistake — a leftover of the brand era — to think that authority can or should be one-for-all or that it’s the creator who establishes authority. Authority will vary by context and need as well as opinion (one man’s New York Times is another’s Fox News). Branded media was one-size-fits-all as was search and algorithmic aggregation. Now discovery will become personalized based on context (who you are, where you are, what you’re doing, what you’ve done, what you like…) as well as timing, taste, and quality.

That personalization will disarm the dark art of search-engine optimization — because it will be hard to game everyone’s search results and will already disrupt even the farms and make critical mass harder to reach (and not soon enough for some tastes). But I remind people not to miss a key insight that underpins the most prominent factory farm, Demand Media: predictive creation. That is, Demand listens to us — via search queries — and to the market — via ad demand — and enables the public to assign its writers (assuring its success, reducing its risk). Return to the point above about the reversed sequence of the media transaction: now creation does not start with the creator but with the consumer (pardon my use of the term; it fits in this context). Isn’t that the way it should be (and not just in content but for most any product or service)?

There’s another dimension I didn’t include in my silly little diagram: being distributed instead of merely discoverable (serving the fabled young woman who said, “if the news is that important, it will find me“). We can no longer expect our consumers/readers/users to come to us and wait for us; we must anticipate their needs by listening to their signals and go to them.

That reversal of the distribution pipe will force content creators to break out of the silos I’ve described above and mix the best of all these methods. Brand can still matter; it will be a signal of authority (or the lack of it) once content is discovered. Search will still matter but it will be sensitive to many signals and demands, from each of us and from the market. Algorithms will also use these signals to target and add relevance to content, helping us to prioritize our hyperpersonal news streams. We will discover more and more content through people we trust. We will wish that someone would create content to answer a question or cover an event and if content creators are listening and if enough of us want it, they will seize the opportunity (this is how the Demand model can come to news). They will even anticipate our needs — that’s why the airline gives me the weather in Florida on my boarding pass when I fly there.

Note in that example that media doesn’t come just from media anymore. Retailers, airlines, government, doctors, teachers, communities — any and all of us — will all be media, understanding the needs of a public and using all these tools to answer them without having to go through the old media brands to create content or reach an audience. That’s the lesson of blogs. And that may be the most profound change of all: the complete and utter disaggregation and disintermediation of media, turning everything about it upside-down: content starts with the consumer instead of the creator; authority is established by the public instead of the brand; the audience is the distributor.

So imagine a content ecosystem where users — who already do most of the information sharing themselves — decide where and how value can be added, explicitly or through our usage data. Imagine that these creations come to us through recommendations from peers we trust, prioritized by formulae (human-aided algorithms and algorithmically aided humans), or through search. Imagine that the creation isn’t a static piece of content but instead that nest of relevance with updates powered by collaboration and links. News and media start to look very different.

What does this mean for the economics of media? We don’t know yet; that’s why we must create new models and enterprises to figure it out. I tell my students that the marginal cost of the sharing of information and the creation of content is now zero; the internet makes it possible for that to happen on its own. So there is no value in doing what others have already done (even the value of one more page about fixing a toilet — no matter how clever its SEO — is diminishing); commodification is death. They should take advantage of the great efficiency the internet enables through platforms, specialization, and collaboration. They should then ask where they add unique value as journalists — finding or even anticipating needs and answering them by reporting, correcting, explaining, curating, organizing, training. That will be true for anyone in media.

And how is money made? We don’t know that yet, either, of course. At Friday’s PaidContent event on [cough] paid content, Forrester’s James McQuivey argued that we’ve never paid for content. He said we do pay for access, but I think it’s hard to make money in access long-term because somebody can provide it cheaper, faster, better. Can we still deliver audiences to advertisers? I hope so, but Bob Garfield warns that as merchants and manufacturers build their own direct relationships with customers — as they become media — there’ll be less to spend on media. I think the value is in the relationships, which is the question I asked of the well-media-trained New York Times executives at Friday’s event: In how many ways can you find value in a deep relationship with your public (selling goods and services, acting as a platform, selling education, selling events….); the implication of my question is that putting up a toll booth turns away those relationships and can reduce that value. But then, that’s just my theory. Everything is.

The one thing I know with some confidence is that we have to build to a new reality and this is a simple way to begin to express some of that change.

Helping news be news

Google News has just open-sourced its code to create what it calls Living Stories. What this really is, I think, is Google’s attempt to take editors to school on content presentation in our new world.

The article, I’ve argued, is outmoded as the building block of news. The new atomic unit(s) of journalism needs to reflect the transition of news from a product to a process. It needs to gather updates and corrections on a story. It needs to put that story in context and history. It needs to link to other versions of the story from other sources. Going past what Google’s Living Stories format does, it needs to open the door to collaboration. It can do so much more: showing the provenance of the news and linking to original sources, gathering comment and perspective, soliciting questions….

Daylife (where, disclosure, I’m a partner) its own vision of the future of the story, called Smart Stories, that will do more neat things; I’ll let them tell you about it. Daylife also sees that news needn’t exist in isolated, short-lived, repetitive units of presentation invented for the age of print. News should reside in a nest of relevance, which not only improves the presentation, it gives you more options on how you want to delve into the story and follow it and eventually contribute to it. It makes news more personal.

Both companies are doing something important for the benefit of journalists: making them look at what they create in a new way. This is just one possibility, just one step. We also need to think about making news embeddable and distributed. We need to insinuate news into your stream (“if the news is that important, it will find me“) and make it collaborative and enable you to triangulate from different viewpoints and footnote our work and….

The way for Google to serve the interests of news is not to make deals to mollify the mewling Associated Press or cater to pipe dreams of charging. The way that Google and other technology visionaries can help is by reshaping the form of news to show the people who do it how they can do it now. The open-sourcing of Living Stories is a welcome start.

Next to the gallows: Newspaper coupons

The best reason that some newspapers have to stay in print — at least a few days a week — is to distribute coupons and circulars (free-standing inserts, or FSIs, in the jargon). But as newspaper circulation declines below critical mass and as digital means of delivery of coupons and bargains catch on, the FSI line of business is the next to fall over the cliff for papers.

Rick Edmonds at Poynter writes about an NAA study that says the coupon business for newspapers is under siege. Meanwhile, Coupons.com brags that the growth of digital coupons is surging; printouts of deals at Coupons.com alone equaled $858 million last year. This comes as coupon use in America is growing overall for the first time in 17 years; we redeemed 3.3 billion last year, a 27% jump over 2008. Sunday coupons still account for the lion’s share of the business, but online is growing fast.

Newspapers defined themselves and their barrier to entry by their production — we already know what is happening to paper — and distribution — now we see what is to become of that.

It’s not just coupons that are affected. When I visited the very smart people at Best Buy a few months ago, I came to see that their circular is media as well; it provides value to manufacturers and consumers. Large retailers, like manufacturers, need effective distribution and as newspapers shrink, they will need to look at alternatives.

Is that the Postal Service? Well, they, too, are losing a fortune (more on that soon). Most of what the Post Office delivers today is advertising and I certainly don’t want to subsidize that with my stamps or taxes, so I’d expect advertising postal rates to rise, which will also put pressure on coupon and circular advertisers, motivating them even more to find ways to make digital work.

The problem with digital coupons and circulars has been portability: the extra and inconvenient step of printing out supresses use. But now enter the smart phone and the long-fabled day of the smart, mobile coupon may actually arrive. If I can check into a flight with a scan of my iPhone shouldn’t I be able to buy toilet paper with it? The value of that redemption is greater for the advertiser because (a) it may cost them nothing — no need to use media as a middleman if I receive deals directly and (b) the advertiser will know a lot more about me; that data itself is terribly valuable and (c) this allows the advertiser to target with far greater relevance, which (d) is better for us customers.

I think there’s a short-term opportunity here for someone to craigslist (as a verb) the newspaper distribution business, creating the means to deliver in key markets with greater reach and better Zip code targeting, drastically undercutting both newspapers and the Postal Service. As coupons do move to mobile and digital, this business will go away, too, but it won’t have much in the way of shut-down cost so there’s a way to disrupt the last dying ember of an industry and get some nice cash flow. If I were a coupon company — and News Corp. is — I’d do it myself.

The point: expect the coupon and FSI business to head over a cliff and with it, another important revenue stream for print papers, giving them more reason to abandon print.

ONE MORE THING: I’ve told this first part of this story before: When I was Sunday editor of the NY Daily News and we came back from a strike, we didn’t have coupons because Murdoch was feuding with our new owner, Robert Maxwell. When they did return, our circ went up 100k. Those people were buying coupons more than the paper.

Now the second part: I later proposed to a publisher starting a coupon magazine that would be sold at supermarket checkout. Yes, I said sold. I wasn’t going to charge readers for content. I was going to charge them for advertising. Didn’t happen, sadly. Still think it was a good idea.

John Paton on newspapers’ future

Two newspaper companies hired new chiefs last week. The Star Tribune hired Michael Klingensmith, my former colleague at Entertainment Weekly, and Journal Register hired John Paton, now head of Spanish-language publisher impreMedia and a newspaperman with roots in Canada. The latter didn’t get the attention it deserved.

Paton has executed a strategic vision at impreMedia, turning it into company that truly puts digital first, hiving off functions that don’t add value and cutting costs to make the company sustainable (that’s the half of the budget that gets too little attention these days), and beginning to build a new relationship — including a commercial relationship — with the emerging ecosystem of news.

Klingensmith, on the other hand, is a big-media executive. I was disappointed that the Star Tribune did not take the opportunity of bankruptcy — or of this hire — to redefine itself. That’s painfully evident in Minnesota Public Radio’s interview with Klingensmith, in which he talks about print and portals. (Sherman: Stop messing with the wayback machine; it’s not 1999 anymore.)

Paton’s work is largely unsung because the product is in Spanish. That, I think, is why his announcement didn’t get as much attention. So I decided to interview Paton via email about his plans for Journal Register. (Disclosure: In our discussions about the future of news, Paton has become a friend and an advisor for the CUNY J-school and my entrepreneurial class.)

JARVIS: What did you do at Impremedia to make it a sustainable news company in the Hispanic market?

PATON: The first thing we did was to decide that in our company, a print company, when it came to products we would be digital and brands first and print last. It was our radical way of focusing everyone on the future. By recognizing our competitors and our future were digital everything we built and did had to follow that decision.

More than two-thirds of any newspaper company’s expenses are in support of the core business of content, marketing and sales. Our digital competitors don’t have that two-thirds cost structure, so we attacked. it. We outsourced all printing, distribution and pre-press ad make up and page make up. We plowed a big part of the savings into expanding our digital resources – web, online video, mobile platform and widgets. We standardized I.T. We then outsourced the back end of all our digital support. Then we started cross-training journalists into one-person multi-media journalists – an ongoing process.

The second decsion was we would let the outside world in. We would share our content for free and we would play with anyone who wanted to play with us – mainstream media or bloggers. That led to our relationships with ESPN, AOL, MySpace, etc. And our launching of the Community E-Journalism Labs in Los Angeles and New York where we said we want to work with entrepreneurial journalists and help them make a living. We have opened up discussions with companies like SeeClickFix and Outside.In to augment our resources and let us re-allocate ours.

The third decision was that we would put in place a very strict protocol that follows the new news ecology of news creation and consumption. Every story of merit is first sent out as a mobile alert, then it goes to the web. After that our publications, editors and journalists use social media to push audience to the web. This process is repeated and enhanced all day with the addition of video and audio. The last step is the printed product. We are currently working to change that product to be a very different product which has to reflect how much of that story has developed and been consumed.

The result was in less than two years we went from 9 products on two platforms (print and crappy publications sites full of shovelware) to nearly 100 products on 7 platforms – with about 45% less costs.

* * *

JARVIS: What are your plans for Journal Register? What will a paper there look like in 1-5 years? Will it look like a paper?

PATON: JRC needs to enter the modern news age in a much more focused and vibrant way. That means the re-allocation of resources to a digital first and print last focus.

In my opinion, JRC is too much like most of the newspaper industry – closed to their communities and input from the outside world. They need to understand the papers and their online counterparts are just a part of the news ecological system.

One of the first steps will be to establish community E-Journalism labs in our communities where we have dailies. There is no way to be hyperlocal without harnessing the power of entrepreneurial journalists and the labs help do that by making content and more importantly sales arrangements with those entrepreneurial journalists.

Second step will be to initiate and, in some cases, expand relationships with companies like Daylife, Outside.In, SeeClickFix, GrowthSpur – any company that lets JRC expand its resources in content, audience and sales while allowing it to re-allocate and focus on its core business. I am very excited about ideas like explainthis.org and others that look at community crowd-sourcing for assignments.

The third step is to tackle the two-thirds infrastructure cost bucket.

Down the road print will change. I suspect the physical size will change and the print content will be much less “he said yesterday” journalism. The focus will become very local with national and international news procured from the very best sources. With so much of the breaking news on the digital platforms, print will become longer-form journalism complimented with vibrant opinion pieces to spark and facilitate debate of issues of importance to the communities. The online forums will expand and continue that debate.

Print will also become a much more malleable term expanded to mean the tablet versions of the actual print product.

* * *

JARVIS: I’ve argued that the future of news is entrepreneurial. Here you are, trying to update an institution. GIven the cost structure and culture of traditional news companies — and their failure, all in all, to reimagine and remake themselves for the digital age — what makes you think that it’s better to spend your time reforming an old company than starting a new one?

PATON: That is a very valid question.

Essentially, I believe that despite the traditional cost structure, the legacy companies do have a running head start with deep relationships with readers and advertisers and their communities. They have solid, if challenged, revenue streams and they are profitable. There are no technological or web content developments closed to them and they can harness that profit to change.

At impreMedia we proved legacy media can be changed.

Finally, while now only one part of the news ecological system, legacy media is an important part. Continuing the core mission of local journalism going forward on multiplatforms, profitably, I beleive. is an important mission for this country.

* * *

JARVIS: OK, now focus on one ecosystem — say, New Haven’s. Besides JRC’s paper and site, the Register, the town has The New Haven Independent doing good and pioneering journalistic work online. There are independent bloggers. There are students covering the university. There’s an alternative paper. There are new sources of information, such as data from government. There’s Spanish-language media, a market you’re familiar with. There’s broadcast. So once you focus the Register and its resources on its greatest value, what is that value? What should your news organization add to the ecosystem? Is it more than reporting? Curation? Community organizing? Education? What else? And what does this mean for skills a Register journalist should have?

PATON: The New Haven Register has a long and deep commitment to journalism in New Haven. It can trace its history through predecessor companies and founders to the Connecticut Gazette co-founded in 1755 by Benjamin Franklin. Some of the first newspapers in the country were founded in and around New Haven. They have always changed to survive and can continue to do so. But now only as one part of of the news ecosystem.

The Register can bring something most new competitors cannot to the party – resources. It has more advertiser relationships, more revenue, more staff and more profit than any of its competitors. It can harness those resources to make the kind of business relationships with entrepreneurial journalists and companies that are doing fantastic work in that community. By doing so it expands that work and will let the Register focus its resources on other initiatives.

This approach lets the paper, as a news organization, engage again in investigative journalism and in-depth reporting of issues of importance to the community. It lets the company’s journalists spend time data mining important government information and developments that may not necessarily be highlighted.

Re-allocating the Register’s resources to create compelling original content is one benefit but the ability to curate content and add resources to put that info in context is also very exciting. Those efforts will stimulate debate in the community and the paper will become a much bigger forum for that because of those efforts.

Importantly, this approach will let the paper re-connect or perhaps connect for the first time with constituencies that either don’t engage with the paper or perhaps feel disenfranchised by the paper’s current coverage and platforms.

* * *

JARVIS: Now please answer the same question from the business perspective: What will the the Register’s commercial relationship be with the ecosystem and economy of New Haven? There are all those entities above plus craigslist and local merchants’ own sites. You’ve already talked about making sales arrangements with entrepreneurial journalists (I say: bravo). Will the Register still compete with those other enterprises? Can it be a platform for their success — and how? At impreMedia, you’ve told me, you hived off distribution, enabling former employees to set up new companies that now serve not only impreMedia’s properties but also Impremedia’s (former) competitors. Do you see something similar happening with local papers? What will the heart of the Register’s own business be? What’s not core?

PATON: No legacy media news company can move forward and become hyperlocal, as it must, unless it harnesses the power of entrepreneurial journalism. And the only way to harness the power of entrepreneurial journalists is to make them your partner and help them make a living. The E-Community Journalism labs will strike content and sales relationships with community members. We will faciliate cross-publishing with some, ditto sales. Sales training will be important. The motto will be that if they win we win too. The Register, as can any community daily, afford to lead the way in these developments. No business deal works if it is too one-sided.

I believe it is important we use the power of our traffic to strike ad relationships with local merchants. By creating vibrant search directories we help drive traffic to the merchants’ sites and stores. Hitching those directories to the power of Google is a win-win for everyone. There are so many ways we can help ensure a vibrant future for the communities we serve.

It is still too early for me to know what outsourcing initiatives will be undertaken but I can say that in my past experience this has resulted in employees being set up in independent, vibrant and profitable businesses and working with our competitors to lower costs and drive profits.

The newspaper industry has been scelortic in its ability to change. It now must find the willingness to do so and become much more flexible than it has ever been.

* * *

Jeff, I should add to my comments I just sent you that I am still stupified at the amount of fear in the newspaper industry. I believe that fear has got to the point that it cripples critical thinking and action. More of the same with less is just prolonging a sure death. Thinking about change and implementing it ensures survival as news organizations….

One more, one more thing: Newspapers need to become fearless again about making their mistakes in public. We used to be good at that. We lost that along the way. The web and is ever self-correcting actions make for a fearless place of ideas.The industry has to find the strength to execute, fail and execute again, again and again. And we have to stop talking and start doing. We should remember our Ben Franklin: “Well done is better than well said.”

The state of the art of news

My response to the Project for Excellence in Journalism’s study that found most original reporting in Baltimore still comes from major media:

No shit.

We need a study to determine this? Well, maybe we do. I think it is worthwhile to have a baseline to compare where news goes in years to come. When I argued the need for an audit of news today with a Google News creator, he wondered why today’s news should be the starting point. My response: Only because that is where the conversation is, as in: “What are we going to lose?” So fine, let’s measure the value of what exists today and look at the resources that go into producing it (including the waste on repetition and commodification). So fine.

But I think the study also brings some dangers.

First, predictably, it only fuels the defensive passion of old media nya-nyaing the news, witness the NY Times: “But the study offered support for the argument often made by the traditional media that, so far, most of what digital news outlets offer is repetition and commentary, not new information.”

Second, it defines news as news has been defined. We should be rethinking our definition of what is news — for many people, it’s not stories about juvenile justice, one of Pew’s subjects — and how it should be covered — not necessarily in articles — and how it is spread — that is the role of blogs and twitter — and not be stuck in old measurements.

Third, it sets up a strawman and then lights the match: Do blogs give us most of our news? No, they don’t. Well, then, they must be worthless, eh? We’ll be lost without big, old media, won’t we? Just what we need. (Though to the study’s immense credit, it also notes how much of local news is repetitive and does not include original reporting.) “This study does suggest that if newspapers were to disappear, what would be left to aggregate?” Tom Rosenstiel, director of the PEJ, told the AP. There’s the strawman: Without papers, we’ll be without news. No, we at CUNY believe the market will deliver it more efficiently and perhaps — perhaps — more effectively. It may not be news as those papers defined it.

We must keep mind that we are at the dawn, the very dawn of the new news ecosystem. There is no scalable business model in place — though, in our studies at the New Business Models for News Project at CUNY, we see them on the horizon and we see new companies starting to build it. When the Associated Press called me about this study on Friday, I said I knew of four dozen reporters in New Jersey who have left their jobs at newspapers and are dying to continue reporting in entrepreneurial startups and are waiting for the kind of help we envisioned in our project. Companies such as Impremedia and The New York Times are just beginning to consider their relationships with the ecosystem.

We are also just beginning to see experimentation with the form of news, moving past the articles the study measures. News is becoming more of a process than a product; it is being disseminated in new ways thanks to search and social and algorithmic links. News is changing.

So I’m fine to look at the PEJ as a historical artifact, a touchpoint for future discussion. But, for God’s sake, don’t consider it a write-off of that future.

Bankruptcy squandered

Tweet: Here’s what I think bankrupt newspaper companies should be doing.

The AP lists the status of six newspaper companies that have declared bankruptcy: Tribune, Freedom, Philadelphia, Sun-Times, Journal Register, Star-Tribune, representing 66 daily newspapers among them.

Mostly they are using bankruptcy merely to restructure the debt they shouldn’t have gotten themselves into in the first place — the debt that nearly killed them. Often they are leaving in place vestiges of the legacy management that made those bad decisions and did not make the brave strategic moves the digital age demanded. Tragically, none of them has used the great if difficult opportunity bankruptcy gives them to reinvent their businesses and themselves, as I suggest here:

Bankruptcy enables a newspaper company to shed its past. It can get out of contracts and leases for paper, printing plants, delivery, trucks. It can also get out of labor contracts, reducing severance costs. That is terribly painful but I fear it is as inevitable as the end of the ITU (the typesetters’ union). It offers a one-time chance to rethink, reinvent, and rebuild the company for the future. Is it better to stretch out the pain and never get anywhere? And if tough decisions and actions are not made, the likelihood that the company will die and all will be lost only increases.

This is another reason I say that the future of news is entrepreneurial. Given the opportunity of market leadership and 15 years since the introduction of the commercial web and then, failing that given the opportunity of bankruptcy to change, the legacy institutions can’t bring themselves to do it for any of many reasons: It’s too expensive to change and cut back; it’s too painful to corporate valuation and ego built on size over profitability to reduce the scale of the company; it’s too difficult to shift the culture (especially after much of the best talent left with buyouts); the strategic vision just isn’t there. Whatever, the tale is too often told.

Even so, it’s not too late for the legacy institutions. Perhaps foolishly, I refuse to give up on them. If these companies took just one or two papers each among their 66 to experiment with new models, to radically rethink and resize them and to learn instead of demolishing their old institutions brick by brick, they and their still-dying industry would be much better off; they might find a new way.

I consulted on my former employer, Advance’s, project to do that in Ann Arbor, killing the Ann Arbor News and starting a new, blog-based, community-based company and service, AnnArbor.com; the industry should be watching and learning from it. That’s one model, but my no means the only one. Our work at CUNY in new business models for news (funded by the Knight Foundation) presents another vision, also not the only one.

Before it is too late, I’d like to see these companies — especially companies still in or going into bankruptcy — try more models:
* staying in print but splitting up the functions of the company and outsourcing everything possible;
* investing in a widely distributed network of independent local and interest sites with the company adding value with curation and sales;
* creating a pure ad network;
* creating a very high quality product and — yes — charging a lot for it;
* creating a series of special-interest niche services and, in some cases, publications;
* creating the still mostly free but higher value craigslist with more curation for quality and more services;
* experimenting with new services for local merchants — especially those too small to ever have afforded big, inefficient newspapers — including helping them succeed through Google, Yelp, et al;
* creating citizen sales forces to scale while serving those small merchants;
* what else?

A few days ago, I had a related email discussion with John Paton, head of Impremedia, which rolled up a number of publications to become the largest Spanish-language publisher in the U.S. In the process, the company has made the difficult decisions to shrink by outsourcing and finding efficiencies and focusing and has changed its culture to put digital first. The industry should be watching these efforts as well. John asked why legacy companies are these days so often counted out in the discussion of the future of news. I recounted my views, above, and added that entrepreneurs have an easier time building from the ground up than big institutions do trying to rebuild from the top down. But I ended saying this: How can the legacy companies stay in the game? By acting like entrepreneurs, by bravely facing the new realities and by making bold moves to utterly transform themselves. It’s by all means possible. But it’s hard. And it’s rare.

There’s still a minute before midnight to try.

The near future

Xark raised fair and unfair criticism of our work at the New Business Models for News Project. I’ll respond:

Xarc’s Dan Conover says that the models we presented look a lot like present models, only different. Fair and true. Our goal was to look at what news in a metro market would look like if the large daily paper died today. — not in the la-la land of the future of news and media I often write about here (more on that in a minute) — but today.

So we based our assumptions on known realities: on local bloggers who are making a living and how they are doing it today, on new news organizations that are springing up today, on the proportion of digital revenue being earned today.

If you’ve heard any of my presentations of the models, you have heard me lament that we chose to work in the lingua franca of the present: CPM-based display advertising and criminally low engagement numbers that are sinfully standard in the newspaper business. Neither is good enough. But we wanted to use a language and precedents that people in this space would understand. We then pushed development of new models for revenue and of networks that must be used to increase value.

Conover says that without an “exit strategy” a hyperlocal blog is not a business but merely a job. With respect, he is judging the entrepreneurial future of news through old, institutional glasses. Much of the work of very local journalism will be done by these new, single-proprietor businesses (and volunteers). If we took his perspective, then there would be little potential in the restaurant, drycleaning, plumbing, or dental industries because many of their practitioners have no exit strategy, only sustainable jobs. Welcome to the new, small-is-the-new-big world. This is precisely why we propose that critical mass will be reached not with old companies owning the market but with new companies operating together in networks. See: Glam, the largest women’s brand online. New model.

Conover is fair to say that the future – not today but tomorrow – won’t look much like the present, including the present we postulate in our models. I do indeed agree that the future could look wildly different. I have speculated about systems for sharing information that will reduce the marginal cost of news to zero with journalists adding value only where appropriate and where that value can be recouped. I have blathered on and on about hyperpersonal news streams replacing the article as the atomic unit of news. I have predicted a world with networked journalism, news made by Wave, and similar outlandishness. If I had tried to present all that as a vision for the news of today – the day a paper dies – I would have blown brains and been laughed out of Aspen and with good reason. But that was not the goal of the New Business Models for News Project. It was to get people to see a new today.

Believe me, Dan, if you want to have a future-shock derby with far out ideas for what news will look in the future but sooner than we think, then I’m happy to compete. But that wasn’t our job here.

And don’t blame the funder of our work for that. Connover is unfair to slap the Knight Foundation, which paid for the first phase of this work, saying: “In the short term, foundation money is likely to continue producing studies based on business models that reflect conventional wisdom about media.” The Knight Foundation did not tell us how to envision our models; that is an allegation without evidence.

It’s particularly unfair since the Knight Foundation – more than any other foundation – has been aggressively pushing inventors to imagine and create new visions and realities for news. The Knight Foundation generally does not favor institutions over entrepreneurs; quite the contrary. You’re free to judge my defense of Knight in light of the fact that they did fund this phase of my work. But I think Knight’s work defends itself.

So, yes, Dan, I do agree that the models were based on present realities. That was precisely what we set out to do: to envision an immediate future that will be credible in present terms. But I also take the challenge to envision more futures for news and – if you watched my presentations – you’d see some I hope to work on. I want to examine the workings of the link economy I talk about so much and prescribe how to exploit it. I want to examine new content exchange models. I want to examine entirely new forms of news and the exchange of information.

This Wednesday in my entrepreneurial journalism class at CUNY, my students will present to a jury 15 businesses, some of which begin to imagine fairly radical new visions of news. They hope to win some of the $50,000 in seed money we have from another foundation, McCormick. And then they hope to go build those businesses and make them sustainable the day after tomorrow. Thursday, that is.

: Later: In the comments, I added this:

I’m trying to be realistic in the near term. I say that the old institutions are not realistic in thinking they can maintain their old business models. I also say that the futureshockers – myself included – are not realistic when we talk about wild new models for news. I’ll repeat: think about TODAY. I mean that. The paper dies tomorrow. You have people eager to do journalism. You have some – but very little – investment. You have a proven amount of revenue and nothing more. What do you do? That’s the question we answered. But there is, of course, no one answer. What we want is discussion and ideas, not just bullets. What would be helpful is to see you and others, Dan included, flesh out your own visions for a sustainable future of journalism starting TODAY.