Gateways in the Chinese wall

In business, a Chinese wall is an information barrier that separates one part of the company from another. In newspapers, there's a Chinese wall between the journalism part (the newsroom) and the business part (advertising), and usually also the opinion part (the editorial page). Outsiders generally don't understand this, but left hand really doesn't know what the right hand is up to, and what's more, often don't want to know.

I was thinking about that the other night when listening to a live stream of a conference at CUNY in which Journal Register chief John Paton said every one of his #jrc newspapers will cover its newsroom costs this year with digital revenues.

How many journalists know their newsroom's budget? How many know their company's digital revenues? This information isn't passed around openly (and no, I'm not going to reveal any Morris numbers; I'll leave that to Derek May).

But ignorance of this information leaves journalists to guess, and often guess wildly wrong, then build towers of assumptions on these bad foundations. Ever wonder where dumb, self-defeating ideas come from? Now you know.

The oldest, deepest, most basic human emotion is fear. The worst fear is fear of the unknown. So in these uncertain and turbulent days of change for newspaper companies, we shouldn't be surprised that many working journalists, lacking any signals to the contrary, despair for the future of their profession.

Run this equation: N = newsroom budget / digital revenues * 100 N = digital revenues/newsroom budget * 100. Paton planted a flag at 100. Where is your N?

(Don't over-think this. Don't argue that print production costs shouldn't be counted. Just do the calculation. It's a barometer. It can predict fair skies and storms pretty well.)

I've seen papers perform from the 20s to 200. If you're in the middle, you should at least get a glimmer of hope that there is a sustainable future for local journalism in a digital world. In the worst economy in our lifetimes, you're covering your newsroom costs!

If you can do 100 and somebody else is doing 200, do 200. If you can do 200, why not 400? Print is declining. Pick up the slack. What needs to happen to get you there?

There are a lot of derivative indicators like these that can, and should, be discussed in the newsroom.

If you have an unhealthy score, there are two ways to go about improving it: cut costs or increase revenues. Does a newsroom play a role in increasing revenues?

Don't jump to "no." Because, as I said, even the Great Wall has gateways. Newsrooms need to collaborate in appropriate ways with the rest of the company to gather the kind of audiences that advertisers need to address.

Repeatedly I've seen newsrooms create projects and special sections of substantial scale without a thought as to whether there should even be a business plan.

And I've see ad teams create special sections without any real thought as to why a user would want to go there, then complain that the site needs a redesign to "drive more traffic" to the poorly designed new product -- as if users could be driven like cattle. (Note: Users are like cats. You can't make them do a thing.)

I knew an editor once who wouldn't allow the real estate section to be featured on the "content portion" of the homepage -- as if there were no reader/user value in the real estate listings. It is no abandonment of principle to feature the real estate section on the weekend. It's a service. If you're in a newsroom, your loyalty should be to the reader/user -- not the Chinese wall.

You have to work together on these things. I have learned that while ad salespeople may be an avaricious bunch of back-patting expense-account lunchers (and I mean that in the nicest way), they also care about what they sell. Engage them early. Work with them, not against them. Make them fall in love with your product before it's time to sell it. And help make their product something the users will love.


Shouldn't N = digital revenue/newsroom budget * 100?

Thanks, Tim. I read over that three times and still messed the math.

Excellent piece, Steve. As journalist-turned-business guy Randall Rothenberg said in Columbia's excellent Business of Digital Journalism study earlier this year, "Here’s the problem: Journalists just don’t understand their business.” Exactly. The church-state wall between newsrooms and the business side, while there for admirable reasons, unfortunately has left both sides in the dark about how the media business really works. Journalists would do well to find those gateways in the wall, understand more about their company's business—and be positive forces for change, before it's too late.

Just a simple question. I know you didn't make up the term, but it strikes me that it's worth asking what this has to do with China at all. That said, I like your point's use of the fact that the Great Wall is not even a single wall at all.

So true: ``outsiders don't generally understand''...and how silly even the most passionate folks in the profession (journalists, advertising folks, pressmen, digital folks etc). look when outsiders with great ideas for furthering the cause of journalism share them and our response is, ``huh?''

Great points, Steve. These are indeed discussions that are long overdue in our newsrooms, not to mention newspaper board rooms. The past couple of years have seen too many companies focus on solving this equation (often inadvertently) by reducing the denominator. Newsroom changes and cost cutting are necessary even if they are painful. What is so frustrating is the expense reductions have often been made solely to pay off past excesses in leveraged newspapers and to temporarily inflate margins in others. As an industry, newsroom cuts have not been managed to improve our journalism and reinvested in a transition to a sustainable digital future. I work primarily on the 'other' side of the wall, but as you note I can still be passionate and committed to our role in the community and our journalism. In fact, I know doing those things well (if at all) depends primarily on my ability to dramatically increase the numerator. To do that I urgently need the talent, creativity and passion of our newsroom engaged in helping build great digital products.

John Paton will make digital pay for the newsroom by slaughtering newsrooms. Big innovation.

right on, steve. before, during and after we launched, a social journalism health site at the lawrence journal-world in kansas, representative from marketing, advertising, tech team, newsroom (reporter and editor), social media rep, and digital media strategies director and assistant director all met together at least once a week. at some point, i envisioned us working shoulder-to-shoulder in the same physical space. all of us knew how the site was doing in terms of page views, uniques, revenues, marketing projects, reporting projects, organizations signed up for group pages (kind of like FB pages). we shared information - the ad rep heard about a story that the reporter planned to pursue; the reporter ran into a business that didn't know about wellcommons and passed on the info to the ad rep; we all worked together on marketing, and attended community events together. we also met with reps from our health community before, during and after; they were part of a community advisory group of about 25 - 30 people. no walls, all of us swimming in the same pond -- it's the only way to go.

Re: "Repeatedly I've seen newsrooms create projects and special sections of substantial scale without a thought as to whether there should even be a business plan. And I've see ad teams create special sections without any real thought as to why a user would want to go there..." Absolutely, Steve - this is a problem that continues to plague newspapers. Here's a test even simpler than that cool equation: If you work in a newsroom where it's considered OK to say "We write news. It's their job to go out and sell ads around it," then you're headed for bankruptcy. Let's be honest - newsrooms have two functions: mission-driven news coverage (defined as stuff that's important to cover, whether anyone actually reads it, though hopefully they do), and everything else - what we might call discretionary coverage. I suggest only the top editor should get to decide how much precious resource goes to mission-driven coverage. Everything else needs a business plan developed at a strategic level. You want a food section? Great - build a business plan that shows it as a profit center. If a food section won't directly draw advertising, will it draw readership that supports subscriptions? Build that into the plan. Research is great, and guessing is OK, but you don't get to launch a food section without a business plan that everyone buys into, including the part that says the food section dies if it doesn't meet its stated goals. Too often, newsrooms consider all content decisions to be sacrosanct, and theirs to make alone. Some decisions fit that definition, but most are not. And ad departments build sections without solid insights about reader interest and behavior. Only the publisher can stop this dynamic and require better decisionmaking and accountability on all sides.

Good stuff, thanks for the thoughts. Regarding walls, Chinese or otherwise, I'm guessing the term came into use because the Great Wall is likely the world's best known. (Evermoreso after the fall of the Berlin.)

The Great Wall of China

... from space. 

(I shot this photo on a visit to China seven or eight years ago.)