Let’s face it. Reporting on local politics and events can be tedious work. But that doesn’t mean the presentation of it should be tedious, too. But it is, and that’s yet another reason why the digital efforts of newspapers have no market traction. Instead of thinking about discrete audiences and how best to serve them, too many editors and journalists consider themselves above considerations of product and of marketing. It is an odd shortcoming for people working in a consumer products business. Because of it, the digital presentation of local news is self-serious, bland and uninteresting, even uncaring. Telling a good story need not compromise the essential truth. But first you need to hire people who “think different.” Product people. Genuine story-tellers with the chops to engage with their customers. 

Last week was an interesting week. On Tuesday I attended a Google executive retreat. For two days I sat around the Ritz-Carlton in Half-Moon Bay like Little Lord Fauntleroy, waited on hand and foot, my every need catered to. During a break on the first day, one of the support crew asked if she could show me where to plug in my laptop for my presentation. “I don’t have a presentation,” I told her. “You don’t have a presentation?” she gasped, her eyes widening with horror at the prospect of a two-hour slot on the agenda without Powerpoint. “No,” said I. “All I’ve got is one little observation.”

More about that later.

On Thursday I landed at Dulles to do an old friend a favor. He has assembled a small group of people – mostly colleagues from his newspaper days – to help him develop a new kind of digital platform for local news. Yes, another one who can’t let go. The meeting was held in a Holiday Inn Express. I no longer felt like Little Lord Fauntleroy. Looked to me like the average age of those assembled was somewhere in the 50s. I marveled that not one person in the room could tell me with any precision who the audience was for the new product. It appeared to be intended for someone labelled “the local consumer.” But that was the end of the market qualification.

I found this frustrating, because I’ve written about the primacy of marketing before, right here for example: https://blastofwinter.com/2016/05/18/why-is-marketing-so-important-in-media/

But I sucked it up. You would have been proud of me. I politely argued that local was a very weak differentiator, always has been, even when newspapers were the only game in town. And today local news is of even less perceived value in the mind of consumers, given all the other options just one click away. So if you want to anchor a digital business on local news, I said, you had better make it important to me and interesting for me. You had better pull me in. And bring me back for more.

Then I tried to persuade them to at least insert the word “millennial” between “local” and “consumer.” No joy. It was the same old newspaper story, they wanted to be all things to all people, the monopoly mentality, building a product from the newsroom out instead of the market in.

It struck me that I was the only one in the room using the words “product,” “audience,” and “market.” I was back in the familiar dissonant place I always find myself in when talking to newspaper people, talking Swahili and receiving nothing in return but stupefied, uncomprehending stares. It occurred to me that even smart, well-educated people often struggle to learn from experience. That’s a dangerous shortcoming when you’re jabbing at the Reaper with a pointy stick.

I bet you know someone who’s been at the office for 20 years and claims to have 20 years of priceless experience, when they really have but one year repeated 20 times. Right?

So, on the plane back up to Maine I got to thinking. Why is there nothing new coming out of newspapers? Why are they still not learning? Why are they so disconnected from the art and science of product development? I mean, they’re in the consumer products business after all. Why do their digital products have the personality of say, a washing machine, or a bottle of milk? Why, even with their digital offerings, do they persist in offering the same kind of traditional print news product – same content mix, same self-serious voice, same ponderous style,  same editorial piety, same cycle, same wire feeds, same everything – while their audience continues to vote with its feet and go elsewhere in the digital universe for news? Are they not listening?

If you’re not growing, you’re dying. Basic biology.

Newspaper digital audiences are their print readers. Or former print readers. It’s a self-fulfilling prophecy. That’s who they “write” for. So even in the digital world, newspapers are not penetrating any new markets. They’re talking to the same old crowd. And it’s getting smaller.

It’s weird, because digital affords so many great new opportunities to offer news in a different and innovative way. (I almost used the word “compelling” there, I caught myself just in time. When allied with the word “content,” it’s become a cliché). There’s an art to telling a story, even a local news story, and rendering such a story in a vivid, captivating way need not compromise the truth. Or cost much more than it costs already.

Look at Vox. Look at Axios. No, really, look at them. See how they strike a personal tone? See how their voice is so informal? See how they make you feel like we’re all in this together? They’re not doing anything newspapers couldn’t have done. Jeez, look at Quartz, the six-year-old digital business news site. It sold last month for $75 million to $110 million – the actual number depends on how well they meet certain goals over the next 12 months. That’s lot of money for a site with revenues of only about $30 million last year and a lame record of profitability. But a newspaper making $30 million in revenues with an operating profit of 5% would be lucky to sell for $5 million now, given current multiples on operating profit. So how the hell did newspapers let Quartz take the business franchise away, and all that financial value away with it?

The other weird thing is that while it’s risky, creating and developing new digital products is not a high capital endeavor. I know, I know, a dollar is a dollar, but comparatively speaking, it isn’t expensive. Putting unfettered creative minds to work, that’s the issue, not how much it all costs. Digital companies are weirdly advantaged because they’re not normal – most of the costs they incur are “below the line,” in Research and Development, and Sales and Marketing and in General and Administrative. Basically, the only marginal costs for the ads they sell are credit card fees. So if it’s not a question of cost and not a question of inherent content competence, then what is it?

Is it that newspapers have been beaten down for so long, their people humbled, their prospects dimmed, every last shekel extracted and diverted to the ghouls from Alden Global Capital or the bottomless pockets of shareholders, private and public? Is that why the franchise was surrendered? Well, sure. That kind of environment will kill an inventive spirit. Unfortunately it will also result in a lot of whining. Lately there has been a spate of articles about the end of journalism, the death of local news, the onset of towns-as-news-deserts, what all this means for a divided America, it’s endless. And unbearingly earnest. I genuinely believe that there is nothing on God’s green earth quite so tedious and depressing as a newspaper journalist bunging on about the criticality of local news – while refusing to change how she goes about it in the first place.

You see, there’s something else going on here, too.

No one I know wakes up thinking ‘I’m going to make decisions today and the first bad decision will be that I will repeat yesterday’s mistake.” Yet we all do that. We all get trapped in our own cultural container, unable to see the world in a different way, afraid to challenge the iron-clad grip of the status quo. Smart people included, like the people around me at the Holiday Inn Express last week. And if you ask me, that right there, that’s the problem with newspapers and their attempts to build new competitive digital properties.

Solving the problem of cultural stasis has of course been the wellspring of the management consulting industry for years and years. (It’s what we do here, as a matter of fact). Same as the book publishing industry. But for all the opinionation and all the ridiculous magic bullet solutions there is really only one thing that matters in the end, and that is the tolerance of any organization to hire people who think differently, to hire and sustain the kind of people who can’t easily fit into the square corporate box.

Take a moment to look at this. It’s the famous “think different” ad from Apple – this version is narrated by Steve Jobs:

 https://www.youtube.com/watch?v=GEPhLqwKo6g

Such people make those around them uncomfortable. They’re disruptive. Dismissive. They’re not assholes, they’re just being themselves. And many employers – especially those who are less secure about themselves, you know, the ones who talk the loudest and with the most certainty – have a hard time working with people who want to change the way things are done. So they dismiss them. Or obscure them in layers of management. Or better yet, they don’t hire them at all.

And so they dilute what their organization is capable of.

That’s why the Internet is only partly responsible for what happened to newspapers. I mean, newspapers have had 25 years of second chances since the digital revolution began and have never taken one of them. No, most of what has happened to newspapers was self-inflicted.

Not one leader over those 25 years was willing to risk today’s profit margin for tomorrow’s strategy. Well okay, apart from Brumback at Tribune (Cars.com, CareerBuilder) and Kennedy at Cox (Autotrader). But even they were not prepared to let a newspaper outsider run their new digital news businesses. It’s as if they assumed that only a newspaper editor could be entrusted with the task. It has proved to be a fatal assumption.

Addiction to profitability froze the response. Owners, banks, shareholders had come to treat newspapers as cash machines and couldn’t let go. Oh, they talked a good game about the righteous role their companies played, but they knew full what business they were in. Newspapers were in the advertising business. And back before the Internet blew down the walls around their market monopolies, it was a very profitable business indeed. So why mess with it? Why take a risk? Why ding the profit line? And why hire people who will rock the boat, people who “think different?”

These “leaders” were not all bad people, mendacious people, or even stupid people. But they were greedy people, and incentivized to do exactly the wrong thing when faced with the biggest question of their careers. Maybe if they’d read Charlie Munger’s “Theory of Inversion,” where you ask yourself “what may go wrong in this business?” and then work your way back to the present day…maybe then, maybe, it would all be different: Invert. Always Invert.

Or if they didn’t like what Charlie has to say, maybe they could have read of the fight Jeff Bezos wages every single day against the dreadful, creeping forces of cultural entropy that bedevil any successful enterprise: Jeff Bezos says you should ask these 3 questions before every new hire

Which brings me rather clumsily to the other end of the business spectrum, to today’s newspaper company leaders. In the second quarter McClatchy revenues were down 9.2% compared to 2017. The company recorded a loss of over $20 million. But undaunted, CEO Craig Forman reported progress on the company’s “digital transformation.” You have to hand it to the guy.

Similarly, Mike Reed, the CEO of the New Media Investment group that runs GateHouse, said recently that “content is our number-one priority.”

I have a simple test to ascertain if Forman and Reed are simply blowing smoke like all the others before them, (anyone remember John Paton?) or if they’re really serious. I want to see not just the money they divert into the development of digital products but the kind of people they hire to build them as well – because newspaper people alone, god bless them, can’t and won’t ever get it done for them. Sadly, as if to prove that point, many of them have been forced out anyway. Those remaining have forgotten how to tell a story, take perverse pride in their innumeracy and when they regard the discipline of marketing they get the same look on their face as Trump does when he happens upon a briefing book on his bedside table.

Without new people, the pain at McClatchy is never going away. And the question about GateHouse, now owner of 146 daily newspapers, is a straightforward one: Is the company just a roll-up designed to more efficiently extract cash, or a roll-up designed to multiply earnings through a product re-invention advantaged by market scale? If they’re not overhauling their people and breaking new product ground, then the answer to the question is pretty obvious, don’t you think?

Re-invention? Transformation? Huh, words like that bring me back to the Google retreat. When it came time for me to speak, I told the group about my visit to the Googolplex the previous day, to check in with a couple of guys from a start-up I had helped that Google subsequently acquired. We met for breakfast in one of the many cafes there. 7:30am. I looked around. The joint was empty, hardly anybody else there. “What time do people start here usually?” I asked. “When the buses get in from San Francisco.” “I guess everyone works late.” “No,” they said. “They’re clock-watchers. Out at 5. Drives us crazy. We’re start-up people.”

Then, after painting that picture, I offered my observation to the group. “Twenty-five years ago, like a few others, I saw the writing on the wall for daily newspapers. At the time they constituted the largest advertising medium in the world. Here in the United States in 1995 their advertising revenues totaled $36 billion. They took in more that 30% of all the money spent on advertising in the U.S. that year – broadcast and cable television combined took in just 25%. When we tried to warn them about the Internet, we were laughed out of the room. The prospect of extinction seemed absurd. Well, if my experience with newspapers is worth anything, seems to me you here at Google are in danger of becoming the victim of your own success too. Maybe, despite today’s astonishing revenue growth and market share, you could actually be on your way to becoming the next Yahoo!”

That got them going. In the end, I had to get the red-eye to Dulles. And I’m much too old for that bullshit.

Posted by Peter M. Winter

Peter is a traditional media veteran and a digital media pioneer. He is an active angel investor and occasional consultant. He advises established companies on cultural regeneration and also consults to digital start-ups, helping them incorporate management process without sacrificing speed. He holds five technology patents. Peter is an award-winning public speaker and writer. His new book "Cowboys and Cannibals," will be published in 2018 - it is the ultimate insider account of the battle to find a digital future for newspapers when the Internet came to town. He blogs on media and leadership at blastofwinter.com and publishes his unconventional ideas about management on his LinkedIn page: https://www.linkedin.com/in/peter-winter-92b69033/ His collection of short stories can be found at medium.com/peter-winters-life-of-fiction

2 Comments

  1. Marilyn Marslin August 13, 2018 at 4:25 pm

    Good to have you back Pete -It’s been a while since you last posted. Marchionne would have been an interesting newspaper CEO, don’t you think? An interesting point on Google guys falling victim to their vanity.. I remember your 6 a.m. toast and marmite story with Murdoch! Keep up the good work! M

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    1. Thanks. Lately I’ve been focused more on magazine writing and building the other blog, Life of Fiction, over on Medium, so BlastofWinter has suffered. There’s only so much a man can do! (Even a man with an MA Hons).

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