I may be the last to comment on the American Press Institute's report, "Newspaper Economic Action Plan," which was produced in May and distributed in June at the not-so-secret NAA meeting in Chicago. But I was flipping through it this morning and was struck how thoroughly the report exposes its own fatal flaws, in a section titled "Assumptions:"
- Consumers perceive that content produced by news organizations is valuable to them.
- Consumers will actually make content purchases when they are confronted with many free options.
- Publishers can exert their influence in the marketplace through laws and public policy, both of which could change.
- Publishers will invest in emerging technologies that establish new work rules, new systems for organizing content and new designs for packaging editorial and commercial content.
- News organizations can make the leap from an advertising-centered to an audience-centered enterprise.
Consumers perceive that content produced by news organizations is valuable to them. This myth persists primarily in organizations that are dangerously out of touch with their markets. Public opinion of journalism, and of newspapers, has gone into a nosedive. Decades ago, people might trash-talk "the media" but generally would make an exception for their local paper. No more. Newspaper managers should know this, but many of them have fired their research people to save money, preferring to stumble through the fog without eyes and ears.
Consumers will actually make content purchases when they are confronted with many free options. Over the last 15 years, this assumption has been demonstrated to be false in digital paid-content experiments by newspapers all over the world. The numbers of consumers so inclined aren't great enough to sustain a business of significant scale. This idea persists primarily because so many newspaper people are deeply ignorant of what's been going on in their own companies, and because digital people generally lose power struggles with print people. Almost everyone I know who ran a paid-content online media experiment no longer works for the company where they tried it. Those companies are now largely ignorant of their own histories.
Publishers can exert their influence in the marketplace through laws and public policy, both of which could change. Newspapers have been trying without success to get rid of FCC's cross-ownership ban for decades. Newspapers, which are deeply despised by many politicians and sweeping sectors of their own customer bases, aren't going to persuade the government to outlaw Google.
Publishers will invest in emerging technologies that establish new work rules, new systems for organizing content and new designs for packaging editorial and commercial content. These would be the same newspapers that underinvested in the Internet for the last 15 years, while pouring cash into glitzy corporate headquarters, printing presses, and more newspaper acquisitions? The ones who now can't pay back the capital they've already borrowed?
News organizations can make the leap from an advertising-centered to an audience-centered enterprise. News organizations -- OK, let's be specific: newspapers -- are deeply addicted to high-volume revenue streams and huge profit margins that have enabled them to gobble up other newspapers and create huge, dangerously leveraged media chains. Such organizations require growth to survive and will fail in spectacular ways when asked to cope with shrinkage. And make no mistake, the scale of any news business that asks its readers to take primary responsibility for underwriting the costs of journalism will be tiny when compared with the fat times at the end of the last century.
Many of these weaknesses were discussed at length several years ago in the API's first NewspaperNext report, which recommended that newspapers clean up and maximize their poorly operated current lines of business (advertising) and then aggressively seek to create new kinds of businesses predicated on an analysis of poorly met consumer needs -- jobs that people are struggling to get done.
Such new businesses may in fact yield direct revenue from consumers, but they are not a paid content strategy. The N2 path is one of innovation -- starting small, starting at the low end, willing to make cheap mistakes and adjust quickly, and evolving new kinds of content and services.
Any path that attempts to reverse 15 years of social and technological change and force individuals to suddenly assume primary responsibility for financing the the old content and services is doomed from the start. There were many divergent needs that led people to consume the newspapers of the 1980s. Many of those needs are better met today by other solutions.
If there is a path forward for newspaper companies, it will be a new one they have yet to discover. Such discovery begins with listening to real people, not by wishful thinking in the boardroom. But as I said, many have fired their research people and now stumble through the fog without eyes and ears.