Back to that model thing

One size may no longer fit our need for news.

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Let’s talk turkey.

Back to finding sustainable news models. If the presidential election is any sign, we’d better pick up the pace. If we can help solve the newspaper business model problem, we’ll solve about half (if not more) of the world’s other problems, too.

Here’s the thing: One model won’t do. Not anymore. News is becoming a layered thing, and the businesses within each layer face different opportunities and challenges than those above or below. Your humble host can see a need for at least six models.

Model 1, national newspaper: The prima donna of large chains, this species of news producer can cheaply build a nationwide circulation base online because it has cross-country appeal — it’s producing original news about big issues that interest readers from Alaska to Maine.

It can compete for national advertisers. It’s supported by profits gleaned from smaller dailies in the parent chain. It might anchor a chain-owned wire service that’s fed by and to the smaller dailies and is also resold to other content providers.

It can be a destination website to which online viewers turn, or, through business deals, become a utility, available anywhere a viewer/reader is looking for national news (e.g., buy a subscription to your local daily and get a free subscription to the national paper). Or it can try to be both, a destination and a utility.

But, national papers compete on their beat, and, given the aggregating effect of the internet, how many of them can survive? How many versions of a given national event will the market bear?

Model 2, small chain: A smaller, regional newspaper chain without national aspirations, perhaps a portfolio of weeklies with an anchor daily, can also exploit economies of scale and can offer advertisers a regional buy. The papers may be able to repackage and share content (especially if the weeklies publish on different days of the week), but coverage and circulation overlaps and adjacencies also can pose severe branding and management challenges. Should there be one shared regional website, or one for each publication or both, and what about Facebook? Circulatory cannibalization, brand confusion, and online content duplication can all occur.

Model 3, solo daily: The standalone daily newspaper, the traditional monopoly model, still exists but faces (as we all know) new challenges. This business can be nimble, but has little opportunity to employ economies of scale, has a limited circulation area and is reliant upon that area’s economic viability.

Model 4, online only: Like it says. Online. Only.

Model 5, online lead, print follow: We borrowed this idea from one of this blog’s followers (see, Dan, I WAS listening!). The model is this: produce a daily online news report, then develop the best of the stories for a weekly print edition.

Model 6, weeklies: The name of this blog is Save My Daily, but it may be that, in the end, our country winds up with a whole bunch of weeklies, one daily in each state capital, and one or two national papers. If that’s where we’re headed, it behooves us to consider the model for a healthy weekly.

Look, we’re just chewing this turkey down. There’s a lot to digest. If you have ideas or thoughts to share over the table, please comment. Thanks.

Grounding our now in then

Who owns your local newspaper? Why should you care?

This morning, I was preparing a diatribe of a post.

It was sparked by news in the local daily about the efforts of one newspaper chain (Gannett) to buy another (Tribune Publishing).

Although Tribune resisted Gannett’s initial offer, the concluding quote of the story predicted eventual success for Gannett because the deal offered such a great return on the investment Tribune’s largest shareholder had made in that company just three months ago. Surely that shareholder, as well as Tribune’s other shareholders, would reach for the money and sell.

And so I began to write this post: Buy. Sell. Make money. Who is minding the long-term effect of such transactions on the communities served (a questionable verb) by the newspapers so traded?

Taking a break from my breathless drafting to search for a fact or two, I stumbled on a treasure, a three-part series from the American Journalism Review archives on the state of the American newspaper.

The articles, written by Mary Walton and published in May 1999, glued me to my screen from the first sentence to the last. Walton did a marvelously thorough job, presenting both broad picture and detail in a masterful fashion. Yes, her piece was written 17 years ago, but many of the players remain active on the giant monopoly board of American journalism.

Whatever I could have written for you pales in comparison — read on, and enjoy, Walton’s articles: “The Selling of Small-Town America.”

Too much of a good thing, II

Keeping the online report local might protect the local daily.

Where were we?

Oh yes. The aggravating effects of online aggregation. Continuing with yesterday’s topic and a source already quoted, according to Jim Rutenberg’s April 17 article in The New York Times, Jim VandeHei believes that survival “depends on giving readers what they really want, how they want it, when they want it, and on not spending too much money producing what they don’t want.”

As a newspaper’s ad revenue declines, subscription revenue must increase. Online viewers have a world of content to choose from and are notoriously resistant to paying for any of it.

Thus, the advice. Give them what they want, how they want it, when they want it — convince them to become a subscriber.

Methinks it’s time to consider different perspectives.

Let’s start with one of our imagined dailies from yesterday’s post, the Herald, about to cover a campaign stop by Bernie Sanders at the state capital.

Presume the Herald presides over a rural corner of the state and is a member of The Associated Press.

The Herald editors decide they’ll use the AP’s campaign-stop story as a sidebar. For their main piece, they’ll send a reporter and a photographer to the event with a busload of local Bernie supporters.

(The supporters are quite happy to invite the journalists along, knowing Bernie will get excellent coverage in the local paper as a result.)

In the print edition and on the Herald’s website, the story about the supporters’ day trip runs with the sidebar from the AP.

(I am presuming that, as an AP member, the Herald would have the right to publish whatever AP stories it publishes in print on the web as well. Not sure that’s true. If you know one way or the other, please comment.)

In print and online, the Herald has produced what its subscribers expect.

But — and here’s an idea — perhaps the newspaper should refine its approach for platforms designed for the mobile web — Google’s Accelerated Mobile Pages, Apple News and Facebook’s Instant Articles.

When the Herald pushes its news feed to them, the paper could withhold all wire copy and wire photos. The effect would be to make the Herald stories totally local and therefore totally different than everything else being served on those platforms.

One would hope that, as the Herald maintains a local focus, producing news uniquely pertinent to its local readership, it would maintain its subscriber base.

Now, let’s consider the perspective of a newspaper or online-only news organization with national aspirations — The New York Times, Politico, etc. We’ll call them “the majors.”

The majors have a much tougher row to hoe. They need to convince a world of potential subscribers that they are the best source of national news. And, unlike the Herald, the majors face serious competition from each other, for none have a naturally local angle.

Of course, each of them is going to try to produce the best story of the Sanders event. Of course, the stories will be similar. Of course, the internet will aggregate them, creating a confusing clutter of similar pieces.

And — and this is the real problem — not all of the majors will enforce a paywall. Some of them will let readers peruse the Sanders story for free. The free stories will likely be most often read, which will improve their standing on search results pages. Right?

(If I’m wrong, please comment.)

I’ve got no ideas here. First of all, the AP has to cover the national story for its members. That’s why it exists — to cover events its members can’t afford to cover. I reckon the same could be true for the national newspaper chains that have formed their own wire services. They have to be there, on behalf of the dailies that are owned by the chain and can’t be there. Right?

Add in other news organizations without a geographically local focus and what do you get? As VandeHei decries, “50 competing but nearly identical stories about a presidential candidate’s last speech.” Competition, aggregated online.

It’s bad for everyone, but how can one expect a major to refrain from covering a national event, to let the other guy cover it and glean whatever associated pennies fall out of the internet ether? I’m afraid the market is going to rule here, and it will be ruthless.

No, I don’t have any ideas, unless — consider a jury trial of national interest. The court will only allow one member of the press to attend. The majors (and they know how to do this) form a pool; one reporter goes in and his/her story is given to all.

Could this model be applied to national stories, with a twist? Would the majors agree to take turns? You take Bernie; I’ll take Hillary; we’ll share stories? Only one version of each gets published?

Crazy idea. Nah.

Too much of a good thing

Who needs 50 versions of the same story?

Aggregation is an aggravating fact of online life.

Imagine three traditional dailies in the state of Indiana: the Herald, the Messenger and the Town Crier. In addition to their print publications, each publishes online via its website.

Imagine that presidential candidate Bernie Sanders visits the state capital, Indianapolis.

All three papers send reporters to Indianapolis. Also attending are members of the presidential campaign traveling press corps, including reporters from The Associated Press and major newspaper chains.

The next day, consumers of the print editions of the Herald, the Messenger and the Town Crier read their paper’s version of the story. It might run with a sidebar written by the AP or another wire service, but basically, one version of the event is presented.

Online, though, all of the versions of the story — those written by all of the local reporters and those written by the national press — turn up on the results page when a reader searches for “Sanders” or “Indianapolis.”

And thus we have, I think, the phenomenon that was bemoaned during a breakfast conversation described by Jim Rutenberg in an article in The New York Times on April 17.

Rutenberg described his conversation with Jim VandeHei, a co-founder of Politico, and Mike Allen, a Politico journalist. VandeHei was describing what their new venture would NOT do.

“It starts with Mr. VandeHei’s admittedly provocative proposition that ‘journalists are killing journalism.’ They’re doing this, he says, by ‘stubbornly clinging to the old ways.’ That’s defined as producing 50 competing but nearly identical stories about a presidential candidate’s latest speech, or 700-word updates on the transportation budget negotiations.”For News Outlets Squeezed From the Middle, It’s Bend or Bust

I’d encourage you to read Rutenberg’s article long and nuanced article top to bottom. This post, though, just focuses on a fragment of the article, that bit about “50 competing but nearly identical stories.”

Herd journalism has always existed. One example: When the Challenger space shuttle blew up after launching on January 28, 1986, hordes of journalists descended on Concord, N.H., the home of Christa McAuliffe, the “teacher in space” who was on the shuttle.

The Associated Press’s hub bureau for Northern New England was in Concord, which also was (and remains) the home of an award-winning daily, the Concord Monitor. The AP would be sending out stories and photos from Concord to its members around the world.

But the fact that the story was covered didn’t matter. It was a national story, and the nation’s newspapers wanted their version of the story for their readers.

Though fewer newspapers today can afford long-distance remote coverage, it still occurs, certainly at the in-state level.

But today, all of the stories are published online as well as in print. Thus, due to the aggregating effect of search engines, online readers are faced with many versions of the same story.

It’s confusing for the readers and seems inefficient of the news-gatherers, and it leads to the questionable new field of designing headlines to win click-throughs, regardless of whether or not the headline is truly representative of the story.

What’s a newspaper to do? What should journalists and the industry, collectively, do?

I promised to keep posts short. We’ll noodle through some ideas to address this issue in part 2 of this post, to come.

Do we need a new kind of owner?

Moving from shareholder capitalism to stakeholder capitalism

Let’s talk about forms of ownership.

Back in the day, newspapers were privately owned. The newspaper business model was working well.

“When newspaper companies began going public in the late 1960s, the books were opened, and Wall Street was delighted with what it saw,” wrote Philip Meyer in a 1995 article,  “Learning to Love Lower Profits.” “Before technology began to create alternate toll routes,” Meyer pointed out, “a monopoly newspaper in a medium-size market could command a margin of 20 to 40 percent.”

Wall Street wanted in. Private owners began selling to publicly held newspaper companies.* Each time that happened, responsibility for the local daily shifted, from an owner who likely lived in — and cared about — the community the newspaper served, to a fragmented and largely anonymous population of shareholders and a management team that was, and remains, legally responsible for one thing: maximizing shareholder value.

In this era of falling ad revenue, many managers have chosen to maximize shareholder value by cutting costs, including newsroom jobs. (To read about a particularly egregious case, see the July 2015 NiemanLab article  “Newsonomics: Do Newspaper Companies Have a Strategy Beyond Milking Papers for Profit?”)

Not all managers behave that way, to be sure. In Berkshire Hathaway’s 2012 letter to its shareholders, Warren Buffett defended the recent purchase of 28 dailies (see p. 16). Referring to his partner, Charlie Munger, Buffett wrote, “Charlie and I believe that papers delivering comprehensive and reliable information to tightly bound communities and having a sensible Internet strategy will remain viable for a long time.” Buffett made it clear that he doesn’t believe cutting the news staff or reducing the frequency of publication are paths to financial success.

But alas, Buffett and his partner appear to be in the minority.

Is it time for a new form of ownership? Many states are creating one called a benefit corporation. In essence, it gives managers the cover they need to do the right thing — to manage for public benefits beyond shareholder value.

The idea is to move from the shareholder capitalism of the past to the stakeholder capitalism of the future, with the stakeholders including the shareholders, but society, too. It seems like a natural fit for the newspaper business model, and it’s being tried in a big market.

In January, the company that controls The Philadelphia Inquirer, the Philadelphia Daily News and Philly.com was converted to a public benefit corporation. “Given the purpose of pursuing publicly beneficial goals, such so-called B corporations are protected from demands by shareholders that they maximize profits,” philly.com noted.

* 3/23/2016 Addendum — Here’s a sample of how explosive the growth of a public media company could be: Gannett Co, Inc., grew from 28 papers in 1967 (when it went public) to 85 dailies, 35 non-dailies, 16 radio stations, 6 TV stations, the largest outdoor advertising firm in North America, Louis Harris & Associates (an opinion research firm), Gateway Films, and a one-half interest in MacNeil-Lehrer Productions by the end of 1984. [From a paper I wrote for an MBA course in 1985. I used the company’s annual reports as my source.]