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Newspaper Industry And Online Business Models: Jeff Jarvis On Why Newspapers Are Doomed To Fail. Quickly
The crack in the newspaper industry egg is very deep. The prospect that newspapers are doomed to fail is not anymore an hypothesis. The scarcity-based, top-down, mass-distribution business model adopted so far by the newspaper industry has no hope to survive or extend its agony in the new digital content distribution marketplace.
Photo credit: Bruce Parrott
Pioneering independent journalist Jeff Jarvis, addresses, in an hypothetical keynote to the Newspaper Association of America, newspaper executives and their heavy responsibilities in determining the sad state of affairs in which the newspaper industry now lays.
Their key strategic mistakes having been:
- Failure to re-organize itself and adapt to changes in the media economy.
- Reliance on inefficient advertising platforms for too long a time.
- The blaming of search engines and news aggregators for "stealing" content and providing nothing in return.
- Having missed to reach and engage young generations, losing future audience.
But there's more.
The speech the NAA should hear
by Jeff Jarvis
Introduction
The Newspaper Association of America is meeting in San Diego this week and they're preaching up at their own choir loft with angry, self-righteous fire and brimstone about their plight.
Today, Google CEO Eric Schmidt will address them, but he'll be polite because that's the way he is and because there'll be a few hundred aging but armed publishers with blunderbusses aimed at his heart. They need to hear a new message, a blunt message from the outside. Here's the speech I think they should hear:
You blew it.
Anticipate Changes
You've had 20 years since the start of the web, 15 years since the creation of the commercial browser and craigslist, a decade since the birth of blogs and Google to understand the changes in the media economy and the new behaviors of the next generation of - as you call them, Mr. Murdoch - net natives.
You've had all that time to reinvent your products, services, and organizations for this new world, to take advantage of new opportunities and efficiencies, to retrain not only your staff but your readers and advertisers, to use the power of your megaphones while you still had it to build what would come next. But you didn't.
You blew it. And now you're angry.
A New Business Reality
Well, gentlemen - and that's pretty much all I see before me: angry, old, white men - you have no right to anger. Instead, you are the proper objects of anger.
The public should be angry with you for the poor stewardship you have exercised over the press and its service to society. Your journalists are angry at you for losing their jobs. Your pressmen and drivers and classified-ad takers are angry at you for the same reason (and at the journalists for paying attention only to their own plight). Your advertisers were angry at you for using your monopolistic power to overcharge them and for providing inefficient platforms and bad service for so long. But they're not angry anymore because they left you for better advertising vehicles and better prices in a competitive marketplace.
But you're the ones who are acting angry.
Yesterday, you delivered a foot-stomping little hissy fit over Google and aggregators. How dare they link to you and not pay you? Oh, I so want Eric Schmidt to tell you today that you're getting your wish and that Google will no longer link to you.
Beware what you wish for. You'd lose a third of your traffic overnight. If other aggregators (I work with one) and bloggers (I am one) and Facebook all decided to follow suit, you'd lose half your traffic. On most of your sites, only 20 percent of the audience in a day ever sees your homepage and its careful packaging; 4 of 5 readers instead come in through search and links.
In the link economy - instead of the outmoded content economy in which you operate - Google and aggregators and bloggers are bringing value to you; they should be charging you for the value they bring. You should rise up today and give Mr. Schmidt a big thank you for not charging you. But you won't, because you've refused to understand this new business reality.
You blew it.
Losing Future Generations
Your Google snits don't even address your far more profound problem: the vast majority of your potential audience who never come to your sites, the young people who will never read your newspapers.
You all remember the quote from a college student in The New York Times a year ago, the one that has kept you up at night. Let's say it together: "If the news is that important, it will find me." What are you doing to take your news to her? You still expect her to come to you - to your website or to the newsstand - just because of the magnetic pull of your old brand. But she won't, and you know it.
You lost an entire generation. You lost the future of news.
You blew it.
Desperate Moves
You had a generation to reinvent the business but you did too little. I by all means include myself in that indictment because I spent my career in our industry: Guilty. I didn't raise loud enough alarms (it felt as if they were too loud already) or accomplish enough change (not nearly enough). I blew it, too. But no last-minute hail-Mary passes will make up for our failings.
Having not taken advantage of the last two decades to reinvent the news business, you're not going to manage a rescue in two months, before the creditors come calling. That was your worst hail Mary: stoking up on debt and hoping to milk these cows for years to come. Mad cash-cow disease, that's what too many of you had.
Your other desperate moves: suddenly fantasizing that you can fix everything by going behind a wall (to tell with Google and its billions of readers!) and charging us because you think we "should" pay. Since when is a business plan built on "should?" I haven't seen a sensible P&L justifying this dream from any of you. If you have one, please stand up show us now... I thought so.
Other desperation moves: fantasies of white knights from foundations buying you and letting you stay just the way you are. government subsidies (do we even have to discuss the danger?)... switching to not-for-profit, as if that suddenly takes away the need to sustain the business still... misguided, self-righteousness thinking that Google or cable companies owe you money, as if you have a God-given right to the revenue and customers you lost... No, none of this will save newspapers and in your subconscious, at least, you know it. You know the truth.
You blew it.
Possible Solutions?
So what can you do? Two years, even a year ago, I would have said that you had time to build the networks and frameworks and platforms that would support the ecosystem of news that will come next.
- I would have said you could retrain your staff to take on new responsibilities: organizing and supporting that ecosystem, curating the best, training people to be the best.
- I would have advised you to offer your staff members the opportunity to join that ecosystem, setting them up in business.
- I would have told you to take advantage of the efficiencies the Web allows (do what you do best, link to the rest, I used to say).
- I would have argued that we need to invent new forms of marketing help for an entire new population of businesses-formerly-known-as-advertisers.
I did say that. But the financial crisis only accelerated your fall. It didn't cause the fall, it accelerated it. So now, for many of you, there isn't time. It's simply too late.
The best thing some of you can do is get out of the way and make room for the next generation of net natives who understand this new economy and society and care about news and will reinvent it, building what comes after you from the ground up. There's huge opportunity there, for them.
You blew it.
LATER: When Eric Schmidt did take the podium at NAA, as reported by PaidContent's Staci Kramer, he expressed some nicely ironic befuddlement at the AP going after them when Google has "a multimillion-dollar deal with the Associated Press not only to distribute their content but also to host it on our servers." Then he did chasten the publishers:
But Schmidt came down harder on concerns about intellectual property and fair use: "From our perspective, we look at this pretty thoroughly and there is always a tension around fair use... I would encourage everybody, think in terms of what your reader wants. These are ultimately consumer businesses and if you piss off enough of them, you will not have any more."
RIght, pissing off customers is not a business model. Not anymore.
Originally written by Jeff Jarvis for BuzzMachine and first published on April 7th, 2009 as "The speech the NAA should hear".
About the author
Jeff Jarvis blogs about media and news at Buzzmachine. He is associate professor and director of the interactive journalism program at the City University of New York's new Graduate School of Journalism. He is consulting editor and a partner at Daylife, a news startup. He writes a new media column for The Guardian and is host of its Media Talk USA podcast. He also consults for media companies.
Photo credits:
Anticipate Changes - Helder Almeida
A New Business Reality - Editorial
Losing Future Generations - Picsfive
Desperate Moves - Herbert Kratky
Possible Solutions? - Nikolai Sorokin
Reference: BuzzMachine [ Read more ]
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