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What newsrooms should learn from Kodak

Submitted by yelvington on January 7, 2012 - 10:41am

So Kodak, the company that invented amateur photography in the 19th century and invented digital photography in the 20th, is on the ropes. There are obvious lessons for newspapers and newsrooms. Here are a few of them.

Your business isn't what you think it is. Kodak at its peak looked like a photography company, but it was really a giant chemical manufacturing company. Digital tech rendered the entire chemical photography business irrelevant. By comparison, newspapers looked like news and information companies, but they were really expensive commercial advertisement printing and delivery systems. If you have borrowed heavily to build and maintain capital-intensive processes that are suddenly rendered irrelevant, you're in deep trouble no matter how smart you are and no matter what you do. Printing isn't yet irrelevant, but it's trending that way. This is not to the time to invest in a new three-around compact press line.

Brands decay. When I started in photography, Kodak was the trusted source. (Sound familiar, newspaper people?) We might flirt with funky European Agfa and exotic Asian Fuji, but when it was time to get serious, it was Kodak Tri-X and Kodak paper and Kodak Dektol. In a digital world, Kodak's brand means little. And if you think your newspaper's brand is a huge asset, you probably need to get out and talk to some young people now and then.

Early to market doesn't mean you win. When some of you kids were still in diapers and I was still in Minneapolis, we set up an early Kodak digital camera (I think it might have been a DC40) on a tripod at the State Fair. People queued up around the building to get their pictures taken and published online. Kodak was an early mover. So were newspapers, which had online products before the Web existed. Look how that turned out.

Disruption doesn't happen just once. On the digital side, Kodak initially pivoted quite well, creating the "Easyshare" concept and reconquering digital photography from the Japanese tech companies. By the middle of the last decade, Kodak was the market leader. But suddenly smartphone cameras have autofocus lenses, 8-megapixel sensors and HDTV video capability. Result: the low-end market is toast, and Kodak isn't taken seriously in the high end, where Canon and Nikon reign. Newspapers have seen a similar thing happen with classified advertising, which in the late 1990s was an online cash cow. Real estate agents and car dealers now run their own publishing operations.

All of this may seem like a downer, but it doesn't need to be. If you clear out the assumptions, what's left may be easier to understand. Businesses still need convey offers to consumers, and if anything, digital technology has chopped the audience up in to little pieces and distributed it all over the universe. Pulling audiences back together creates value. Make that your goal, and don't let up for a second.

Comments

The failure there is not in the "free" price, which ultimately is set by the market and not by the publisher, but rather in the limited vision of "paper online." Newspaper circulation and readership was declining for decades before the Internet came along to disrupt the business model.

Newsrooms on the whole failed to grasp the concepts of timeliness, actionable utility and interactivity that are the building blocks of Web success.

Example: The Washington Post had a paid-content online service in 1994-95, but we were well into the 21st century before the newsroom created a "continuous news desk" ... and that's just news, one little sliver of the circle of possibilities.

Utility? Sure, a lot of newspapers built directories, but in most cases they were treated as advertising, not content, minimized and marginalized. It took Yelp's single-minded obsession with the challenge to get it remotely right.

And interactivity? We know what happened. Newspapers begrudgingly allowed comments on news stories, and Facebook stole the audience.

> "If you clear out the assumptions...." Big "if." HUGE "if." And for many media companies, an almost impossible "if." At the National Geographic Society (my particular area of interest), the old assumption is that the Society, at heart, is really about great cheetah pictures. The new plan is to sell those cheetah pictures to a global market, esp China. With that plan in mind, the Society has been re-organized, including the sale of the National Geographic Channel to News Corp. To suddenly say: "Oh, wait... we're not really about cheetah pictures, we're about [insert new business strategy here]" is to admit what is practically inadmissible: "We were wrong." You may say that ignoring the truth won't make it go away. But management's bet is simple; No one can predict the future, and if we guessed wrong, then the serious meltdown will happen *after* we've moved on. Thanks for your post, Steve. best, Alan Mairson Society Matters #journalism

> "If you clear out the assumptions...." Big "if." HUGE "if." And for many media companies, an almost impossible "if." At the National Geographic Society (my particular area of interest), the old assumption is that the Society, at heart, is really about great cheetah pictures. The new plan is to sell those cheetah pictures to a global market, esp China. With that plan in mind, the Society has been re-organized, including selling the majority stake of the National Geographic Channel to News Corp. To suddenly say: "Oh, wait... we're not really about cheetah pictures, we're about [insert new business strategy here]" is to admit what is practically inadmissible: We were wrong. You may say that ignoring the truth won't make it go away. But management's bet is simple; No one can predict the future, and if we guessed wrong, then the serious meltdown will happen *after* we've moved on. Which means they'll stay the course. Thanks for your post, Steve. best, Alan Mairson Society Matters #journalism

For decades newspapers were the place to go to get facts and straight reporting. Now so many papers have become left and right-leaning in their reporting of the news. Two different newspapers make an event seem like two different stories. Facts are masked by attitude and I no longer trust newspapers to get a story straight than when I read Fox News and MSNBC and read their varied slants on news.

The true disruptive aspect of the internet is that it allows the user to access information without a middleman. If you do not provide something of value to your audience, you will lose them as they get the info they need from someone or something else. Publishers that previously thought of themselves as the arbiters of content and stewards of their industry had their foundations washed out from underneath them as their audiences abandoned them for search engines and vertical-interest websites.

100% correct but this assumes a level playing field. Have you ever gone to Walmart and asked for Kodak film? I have for as long as there have been Walmarts. 'Associates' escorted me around refrigerator size displays of Fuji film in search of Kodak. They played hide and seek trying to find it. Eventually they had to call the office to see where Kodak products were kept. Finally they found a few rolls hidden in a cabinet. They were stored as if they were dirty magazines. Kodak refused to play the Japaneese/Walmart game of being squeezed into providing products for 1% markup and providing kickbacks for product placement. It's time for Walmart to stop flying the American flag above it's stores.

Thanks for this post Steve, if only for the purely selfish reason that print journalism is the very first thing I thought of when I heard of Kodak's bankruptcy filing. Regarding the point by Denis and your response, I could not agree more that "[the] failure wasn't in free content." Aside from your well-made points, I would add that the cover price of a newspaper or the price of subscription never paid for a newsroom. The monetary value of subscription was always tied to the verified readership numbers which were then leveraged to sell advertising, always the most important source of a print publication's income. Which brings me to another analogy with Kodak. A wary observer would have seen that sites like Monster and Craig's List demanded a response to job listings and classified ads, respectively (just two examples - there are many others). But newspapers continued, almost universally, to ignore such disruption for a decade or more, and so lost the opportunity to build viable competing models - or in at least in some way come up with an innovative response. They did not, and newspaper news sites (or newspapers themselves) are now far down on the list of places people turn to when trying to sell a car or get a job. @aaranged

Great analogy and good read. But your statement "Kodak isn't taken seriously in the high end, where Canon and Nikon reign" is not accurate. Kodak provide(d) the sensors for the most expensive 35mm camera system currently on the market - the Leica M9, still considered amongst the best performers (well, at low ISOs anyway). Kodak also provide CCD sensors for all sorts of very demanding technical applications. So while they may have missed the boat on taking advantage of market trends, it certainly wasn't because they didn't or couldn't produce the a high end digital camera components.

Long story short, I am just looking for information/data. I don't care where it comes from. Each website is easily accessible. A click, or enter address, press enter. I have had numerous times (in various states, actually) where I would enter a store, and someone would be handing out free newspapers. I always tell them, "No thanks, I just use the Internet". I always get a negative reaction. Why don't they say, "Thats awesome, here is a card with our web address - we'd love to have you visit?" Because they STILL don't realize that no one gives a flying rats butt about print. Ok, some do - otherwise sales would be zero. :) It is dropping fast, though. Not sure how well this comment fits in, but it is what I thought of when I read this story. I enjoy this blog.