Bucket economics for newspapers: classifieds, the long tail, and going back to the future


It's fair to say that publishers are deeply annoyed about the idea of the long tail. God help us, they think, if this is the future of newspapers and news media, we will never be able to pay for good journalism.

According to Wikipedia — and hey, the definition is appropriately dense and intellectual sounding and it's been referenced, so I'm going to go with it — the long tail is the idea that the future of dynamic business is by “selling a large number of unique items in small quantities, in addition to selling fewer popular items in large quantities.”

The idea was popularised by Chris Anderson in the October 2004 edition of Wired magazine, so it's not exactly new. He then extended the concept in the book, The Long Tail: Why the Future of Business Is Selling Less of More. INMA has referred to it many times in their yearly Outlook reports. It's not just something that explains retail; it's a business strategy that newspapers can and should be learning from.

But even after nearly six years, news media publishers still sit awkwardly with it. The INMA World Congress in New York in April was evidence of that as speaker after speaker talked about the iPad and how it could be the next big thing to save newspapers.

But here's the thing. No one “next big thing” will ever come along again and save newspapers. Not now, not for the foreseeable future. Because the future of newspapers is not going to come from a tidal wave that replaces the water level left when classifieds played the theme from Dambusters and exited the building.

The long tail is a lot more work than that, folks — and maybe that's why we hate the idea.

We need to have every single bucket we can have out there to catch the drips and drops, the bits of money, the dribs and drabs. It's harder work.

Our buckets these days may need to be digital — a host of applications, websites, mobiles — radios and screens, backed with newspapers, books and magazines to suck up every last drop of income generated from media consumption. And that's going to mean more cooperative, flexible, entrepreneurial vision and flow across the departments.

It means the command and control methods of management and the silos we love to structure our companies around absolutely have to go because they are too slow and inflexible and expensive to make money in this new environment. Insist on these kinds of structures, and you'll be obliged to cut the journalism to the bone. Yep, in this brave new business world, a siloed company is an indulgence few of us can afford.

Newspapers that say they can't be good at collecting up the small stuff have forgotten about the origins of classifieds — those pesky small ads that voted en masse and got us into this trouble in the first place. Maybe that's because ever since we've run them, they've been major categories and big bickies.

Take yourself back in time, though, and imagine yourself starting a newspaper from scratch. Could you imagine going after ads worth what? $30, $50, $150 each when there were big number spaces out there to be had? Are you going to create an infrastructure that supports the small sales or the big ones first? I was founder and publisher of The Balmain & Rozelle Village Voice, a monthly newspaper started in 1994 with just six classifieds. When the newspaper was sold 10 years later, the category was worth nearly A$100,000 a year.

Maybe our forefathers knew something more than we did because, and I'm using the Sydney Morning Herald as an example here, back in 1831 when the first edition rolled off the presses, its front page was filled not with news, but with line ads (or maybe it was the printing technology, but my point is that it was multiples of many small things, not single large clients). And they were using hot presses, so imagine how expensive that was as an investment!

So here's the surprise that long tail naysayers in newspapers may not have considered. Creating an infrastructure to affordably catch lots of small drops is something we as an industry have a history of succeeding at.

It is time to stop mourning and raging at the absence of classified ads as a mass category, missing their bulk and impact that allows our management to be sloppy and our business strategies lazy. It's time to remember our successful business heritage of being “drip catchers” and get as many buckets out as we can amongst multiple platforms.

The Wikipedia entry says although Anderson made the idea popular again, Long Tail has, in fact, been around since 1946 and used in the insurance industry for decades.

If we go back to the future and remember our expertise at making money from lots of smaller transactions, the future of quality journalism will be assured.

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