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Why newspapers are likely to die as we know them
By Steve Outing on Nov 11, 2008 in Business models
The headline of this item was also the subject line of an e-mail I received today from Frank Pecarich, a retired management consultant who has been watching the newspaper industry lately with incredulity. In advance of this Thursday’s private summit of 50 newspaper company CEOs at the American Press Institute, I share Pecarich’s observation as something for that group to think about:
“As a retired management consultant, there is something terribly wrong with the management and executive decision making model for most newspapers. The correction process (action research model) calls for an appropriate management system response to an accurate critique of the management system or process. In the management literature as well as in my experience, it is clear that those organizations who fail to ‘correct course’ after receiving clear indications from the market to correct themselves, ultimately fail. This is happening almost daily as newspapers are cutting staff and in so doing, totally curbing their capability to produce a quality product and thereby even have a chance to survive. The result is an ever deepening and ever tightening death spiral.”
Pecarich also shared this diagram:
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What do you think? I find it hard to argue with Pecarich’s appraisal of the situation. But is there still time for newspaper industry leaders to make necessary course corrections? Is the industry just waiting for the “catastrophic event” that will force an abrupt transformation to stave off extinction?
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On Nov 11, 2008, Brian Hayashi
said:
Thanks for sharing, Steve.
It’s been my experience that newspaper executives became used to dealing with emerging competitors that were easy to understand (i.e., radio, tv, alternative newspapers, etc.). In each case, they came to believe that each new competitor would inevitably gain share, but would also increase the size of the media consumption pie.
Strong recurring cash flow obscured what was really happening and hid poor management decisions.
It wasn’t until Craigslist came onto the scene — and later on, citizen journalism — that managers had an inkling that this threat was going to be different. Imagine Gulliver brought down, not by a single foe, but through the collective actions of millions of activities by individual bloggers and businesses alike.
The daily newspaper occasion – where one could count on finding at least five to seven interesting things in the newspaper sections of one’s own choosing – has been replaced by the ubiquitous Internet, and all of its attendant blogs, marketers, and activities.
I believe there is value in the newspaper newsroom that doesn’t exist anywhere else. I believe there is value in the circulation base of the typical daily newspaper. I believe there is value in the newspaper’s unique DNA — all of the different information products that are brought together and delivered to the doorstep, every day — and the local sales staff that knows how to sell that portfolio of services to local advertisers.
There is clearly a closing window of opportunity to leverage that newsroom into the vague new world of citizen journalism.
On Nov 11, 2008, Tom Regan
said:
Steve, you and I have been doing this for a long time. I’ve heard people ask this question again and again: Is there still time for newspapers to “get it”? I’ve finally decided the answer is no, they will not get it. Period. It ain’t gonna happen.
The only way newspapers will survive will be the Metro model. Give it away for free.
Cheers
Tom
On Nov 12, 2008, Lisa Thompson
said:
I quit the newspaper biz in 1993 because I could see the handwriting on the wall. Or should I say the ink running out? The papers that have survived have transformed themselves into successful Web sites or, like the local Tampa Tribune, combined forces with TV staff. Newspaper execs do not get it, Tom, that is true. The Internet is free and subscriptions don’t pay for the papers, advertising does. They should be free if they hope to survive.
What I sometimes wonder is, if the Web vanished tomorrow, what would we rely upon for permanent records of history? Newspapers, of course. Without these valuable pieces of paper, I could not reconstruct history to write my project, a biography of a woman who had five different kinds of cancer.
Newspapers still serve an important purpose, allowing more in-depth reporting. It’s too bad that the commercial side took over and destroyed that.