The United States newspaper industry has been re-made so rapidly in the past 30 days that it is difficult to make sense of it all. It is a staggering amount of change crammed into a short period of time:
- Stalwarts announcing their departure from newspapers altogether (Media General, Freedom).
- White knights appearing out of nowhere (Warren Buffett).
- New players on the scene (Halifax Media, 2100 Trust).
- Print editions disappearing (Times-Picayune, Advance Alabama).
- Speculation rampant on ownership changes still to come.
- CEOs coming and going at a record pace.
What to make of it all? Is this the beginning of the end or the end of the beginning?
Let’s take a deep breath and try to connect the dots.
For the most part, the current class of U.S. newspaper owners operates newspapers to:
- Fund blank-check, hands-off journalism.
- And, simultaneously, extract maximum profitability from the market.
The American ownership class operates on a continuum of “how big is the check and how blind an eye for journalism?” and “how big is the profit?” Some like journalism more than profit. Others like profit more than journalism. It was an “umbrella” with which we all grew comfortable.
The perceived value of this model to all parties — shareholders, advertisers, readers, journalists — is that there is a deep, wide moat around the operation, which requires minimum innovation and maximum template management.
This model was dying for decades and collapsed in the recent U.S. recession, as key advertising categories left print for high- metrics media.
Thus, the premium now on innovation, people, and finding a new template — fast.
What is left are:
- Owners who are doing everything in their power to repair the old model or invent a new model before the economic waves cover them up.
- Owners who, evaluating the cost/benefit analysis of making those changes, are electing to divest and find more efficient ways to invest shareholder monies.
These are tough, tough judgment calls for owners who prefer benevolence and deference to the tough business of change.
What happened with The Times-Picayune in New Orleans and Advance Alabama reducing from seven-day print publishing to three-day print publishing, while emotionally draining, demonstrates the owner’s commitment to repairing the business model before it’s too late. Would it have made everyone feel better if Advance had waited a few years when economic conditions tightened and there were fewer options?
As for billionaire investor Warren Buffett being a “saviour” for newspapers in his sudden ownership of 88 titles, this requires sober assessment. The “Sage of Omaha” bought de-valued assets on the cheap. He saw a fantastic price for long-term assets. Don’t read much more into it than that. Having said that, I love that solid money is now behind a lot of newspapers, and I would love it if more of Buffett’s shared wisdom came with the package.
As the industry’s ownership base rapidly changes, the news industry is awash in hyperbole.
A recent article in The Atlantic described The Times-Picayune’s move to three-day printing as something that will “damage its journalistic foundation” and affect “residual goodwill at the same time.” Advance’s Internet strategy is not about journalism, but about “clicks.”
Let’s deconstruct that:
- Era of blank-check journalism is over: Companies re-committing to news publishing are prioritising what they do best and cutting away the rest, whether in print or digital. It begins with identifying their USPs and understanding what readers are consuming and (painfully) what they are not.
- Seven-day publishing “only” foundation: Apparently, nothing short of seven-day publishing of a print newspaper will resonate with a community — an absurdity. The U.S. market is staring in the face a business model of weekly print or even no print this decade. The criticism that may be more correct is whether the digital model that replaces it is sufficient in size and scope. The criticism that may be correct is whether sufficient “oxygen” (marketing, sales, research) exists behind the remaining enterprise.
- Abandoning journalism for the tyranny of the click: As for this being an abandonment of journalism at the expense of embracing what people consume, that is another silly connection. If journalism is about funding art that is not consumed, make no mistake that idea is dead or dying among private-sector publishers. Let’s agree that Britney Spears’ love life is not going to become the lead story no matter how many clicks, while simultaneously we need far fewer “Trekking Through Zimbabwe” stories. There is a happy medium, and our industry today continues to trek through Zimbabwe too much.
For the new ownership class that is emerging in the United States (as well as the old one hell-bent on ripping off the Band-Aid and embracing multi-media), there is no equivocating about standards of journalism, church and state, professional fiefdoms, opinion versus news, editorial versus commercial, and the like. I sense they want to cut through decades of cultural myopia in one big swoop. This is dizzying for the standard-bearers of the news industry.
Judging from the public comments, they want to smash through these debates that have held back the news industry for four decades:
- Be true to who you are: Under its new pro-business owner, U-T San Diego has an opinion reflected on editorial pages that is consistent with news choices on the news pages. Somehow, the world hasn’t stopped as a result of this unabashed development that is common elsewhere in the world.
- Be relevant to the audiences you serve: It’s time to stare down the high priests of the news industry who say nothing short of unmanaged, unaccountable journalism that never takes into consideration whether people are reading it is the modus operandi. Let’s take this moment of change and find ways to connect unique and valued journalism with unique and valued audiences.
What we are witnessing today is the exodus of publishers that owned newspapers for high profitability and the emergence of publishers that have different ownership motives. There are many reasons to own a newspaper; a 30% profit margin is not the only motivation. This has been true since the first daily newspaper was published 367 years ago.
What we have today is the slow-motion, excruciating transition of the newspaper industry to the “newsmedia industry.” There will be many New Orleans stories in the months and years ahead. We will learn lessons, good and bad, from those making the first steps today.
New ownership will create an American market of experimentation that has not been seen before on this scale. It is exciting ... and scary.
Stare through the hyperbole to understand the meaning behind these changes.