Saving Newspapers: Put Humpty Dumpty Back Together

By Leena Rao

At last week’s hush, hush meeting of newspaper execs on how to monetize content and save a dying industry, the American Press Institute presented a white paper that offers a step by step plan of how newspapers should move forward with paid content. Nieman Journalism Lab posted a downloadable copy of the report, which has some interesting recommendations. Poynter also provided a comprehensive review of the report.

The report suggests several models to implement paid content, including micropayments, subscriptions and hybrid models. Google (GOOG) is compared to an atom bomb that “blew up the content business into millions of atomized pieces,” leaving news organizations with the mess of putting things back together. Comparing newspapers to “Humpty Dumpty”, the paper paints a “poor-me” tale of how news orgs are scrambling to put all the pieces back together to “restore their integrity.” And of course, news enterprises are also forced to suffer a second related atom bomb: hyper-linking. The report says: “The culture of hyper-linking and hyper-syndication that fuels the interactive Web has become an atom bomb for the old news business model.” So the remedy for putting the pieces back together according to the API: charge for content, stick it to Google, and renegotiate subscription models with Amazon for the Kindle (which it implies is unfairly making more money from content than newspapers). Apparently, nobody at the API has actually read Humpty Dumpty, otherwise they would know that you can never put the pieces back together again.

The API recommends a five pronged business plan, divided by “doctrines,” to charge users for content:

1. True Value Doctrine: Newspapers should create value by beginning to charge for it.
2. Fair Value Doctrine: In order to maintain the value of content, newspapers should aggressively enforce copyrights and right to profit from published content.
3. Fair Share Doctrine: News orgs should start to negotiate with the technology industry for higher prices for content that is aggregated, redistributed, broken up, and linked to.
4. Digital Deliverance Doctrine: Newspapers should invest in technology and digital platforms that could “provide content-based e-commerce, data sharing and other revenue-generating solutions” at “premium prices.”
5. Consumer Centric Doctrine: Newspaper need to refocus their content from advertisers to readers/consumers.

The section of the paper that addresses Google is part sad, part funny and part delusional. Google, the “atom bomb,” is also a “frenemy” to newspapers, citing Google’s CEO, Eric Schmidt, and VP of products and user experience, Marissa Mayer, as the top frenemies at Google. The paper concedes that Google provides 25 to 35 percent of the traffic to news web sites but says that Google is taking a disproportionate share of profits from content creators. Reading between the lines, the paper suggests that Google’s profits are being stolen from newspaper’s profits. In order to seek compensation from Google, the API suggests that news organizations should put legal, political, business and technological pressure on Google, and other “powerful players” in the digital space including MSFT, Yahoo, AOL, and Facebook.

That’s right. Part of the plan is for newspapers, which are technologically challenged, to put “technological pressure” on the technology giants. That plan is even less likely to succeed than the Humpty Dumpty one.

It’s understandable that newspaper organizations are trying to figure out the best way to move forward in the industry, and I think that this report does outline their options for monetization (if that is the remedy) fairly well. Although, many don’t necessarily agree with this. But the passive aggressive finger pointing at Amazon (AMZN), Google and others seems to be a bit off. As author Michael Connelly wisely says in an interview, “Google doesn’t kill newspapers. People kill newspapers.”

(Photo credit: Flickr/Atarkus)

Original post

Comments

[jbofen:]

why NOT point the finger at Google, etc., - it's using copyrighted information that costs OTHERS to produce, and doesn't share in the profit from using that information. Doesn't something sound a bit off? Laws need changing here, the sooner the better.

Jun 04 04:16 PM

[jbofen:]

correction: should read: Google doesn't " share the profits"


On Jun 04 04:16 PM jbofen wrote:

> why NOT point the finger at Google, etc., - it's using copyrighted
> information that costs OTHERS to produce, and doesn't share in the
> profit from using that information. Doesn't something sound a
> bit off? Laws need changing here, the sooner the better.

Jun 04 06:54 PM

[FullMetalPh...:]

What's true for the group is also true for the individual. It's simple: overspecialize, and you breed in weakness. It's slow death.
-(Major Motoko Kusanagi) Ghost In The Shell

Humpty Dumpty not only fell down but was turned into an omelet and was served up.
Newspapers have been living in fantasy since the 90's. Numbers were declining before then. By 2001 Newspaper invested heavily in the internet or I should say the bubble. As far as Google goes the Genie has left the bottle. To be blunt Google and Yahoo are not the issue here. Newspapers retro economic model and news distribution model is the problem. I hate to say it but a pay per story model will not work because there are so many other sources. Even if you put a gag on AP. You still have Reuters, CNN, FOX and many more willing to fill those shoes.
Newspapers need to think differently. They need to realize they are not in the printing business but in the information business. Gather and delivering information. They need to lose the the Deadline mentality and think of a constant flow of information. They need to look at partnerships such as Amazon and Apple for news distribution. If they do not adapt then they will join the dinosaur as a marker in history.

Jun 04 07:35 PM

[masf:]

Maybe the laws that need the most changing are the deregulation approaches that allowed so much media concentration in so few hands. I think the audience for hard copy papers is still out there. Here's a possible parallel from my old rock band days. In the eighties, it looked as if video would kill live music. It was creepy how the clubs put in video equipment, and people sitting right in front of the stage would look up to watch me on the screen instead of the stage in front of them. But a few years later. a lot of that expensive equipment was removed. People still go see shows - and still remark that after looking at a screen all day at work, they want to read the printed page.

Jun 04 10:13 PM

[Bobby Rifle:]

Yeah. And Amazon wants to take 70% of the revenue from newspaper stories on Kindle AND have the right to distribute those stories to any other digital platform. Yep, that's a partnership all right.

As far as AP goes, newspapers pay a shit ton of money to the wire service. So much so that at least a few are balking at the fee and giving their 2-year opt-out notification.

That might not be all bad, because then maybe they'll use the money for local staffing (yeah, right. Not with the managerial beancounters who ran them into the ground by piling up debt for acquisitions while cutting local content). Then they can provide the info that CNN/Reuters/Fox don't provide, which is news about the communities these papers exist in. Go hyperlocal.

Of course, that's a problem for advertisers who don't recognize that all sections of the media are fracturing into niche markets. That's a process that's been going on for 30 years now (see the difference in audience shows for primetime televisions shows between 1980 and now). Advertisers think they can still get a mass media audience, and haven't figured out that you're going to have to go to places where you may only get a thousand pairs of eyes. And that's even before you're challenged by DVRs that allow people to fast-forward through your ads, or ad-blocking software on people's computers.


On Jun 04 07:35 PM FullMetalPhotographer wrote:

> What's true for the group is also true for the individual. It's simple:
> overspecialize, and you breed in weakness. It's slow death.
> -(Major Motoko Kusanagi) Ghost In The Shell
>
> Humpty Dumpty not only fell down but was turned into an omelet and
> was served up.
> Newspapers have been living in fantasy since the 90's. Numbers were
> declining before then. By 2001 Newspaper invested heavily in the
> internet or I should say the bubble. As far as Google goes the Genie
> has left the bottle. To be blunt Google and Yahoo are not the issue
> here. Newspapers retro economic model and news distribution model
> is the problem. I hate to say it but a pay per story model will not
> work because there are so many other sources. Even if you put a gag
> on AP. You still have Reuters, CNN, FOX and many more willing to
> fill those shoes.
> Newspapers need to think differently. They need to realize they are
> not in the printing business but in the information business. Gather
> and delivering information. They need to lose the the Deadline mentality
> and think of a constant flow of information. They need to look at
> partnerships such as Amazon and Apple for news distribution. If they
> do not adapt then they will join the dinosaur as a marker in history.

Jun 05 05:20 AM

[FullMetalPh...:]

I worked in the newspaper industry for over 15 years. 3 of those years was a webmaster for eight papers. I can say from working at Pulitzer then Lee that they had a very poor grasp of the internet and what it meant to the News. This issue started at the top and went down.
The thing to remember here is the internet was not the source of the newspaper industry problems it just exacerbated it. The issues Newspapers really started when they went from family owned to publicly own.
The major issues hitting papers now is not the internet but the credit crunch. The greatest hope for newspapers is the net. It can also be suicide if they decide to continue fighting it.

Jun 05 12:27 PM

[Richard Wak...:]

A long time ago, in the 70's, I was taught by the newspaper elders that the local newspaper is the community marketplace for news, ideas, opinions and marketing. That is why newspapers have value to readers. Enter the internet -- perhaps starting with sites like the Drudgereport and search engines. The "marketplace" concept began to break down. Readership was now in play!

The fundamental problem for newspapers now, and has been for many years, is loss of readership. You can track declining readership into declining circulation. Inevitably, the shrinking franchise shrinks advertising revenue.

In the 90's the youth began to shun newspapers. Now, those non-reading youth are middle-aged -- and they did not change their readership patterns.

With the readership trends, one can only expect to see the traditional printed newspaper lose franchise.

Jun 05 10:03 PM

[Relayer10:]

Full Metal has it exactly right. I have worked at several dailies over the past 26 years. Lee included in that mix. Also MediaNEWS. Ogden too. The corporate mentality at each of them varies significantly. Lee favors accountant types at the top layers of the company, and many of the publishers at their properties are accounting types. Controllers at Lee have had a huge say at each property. Accounting types have a bias to tight cost control first, and limited vision as to content, or community integration. They know how to preserve money, but limited vision as to serving their community. MediaNEWS has a very aggressive approach to the business. They know that local news is the key, and allow publishers at local properties to build good papers. Their weakness is over aggressive growth, too fast, and spread the resources. Dean Singleton has vision, and never, ever, be opposite him in a fight. He will bet the entire company on his vision, and his opponent will absolutely lose. He may also spend way too much to win, and cripple both newspapers in the battle. His newspapers have at their core the right concept. Own local news, and own the market. Ogden has an incredibly adept concept. Essentially, they are a family owned company- just bigger than most. Be a great local citizen, focus completely on the local community. Don't over reach....be fantastic at local, local, local. Think small communities, serve them well, think long term. They tend to be centrally managed from corporate (Wheeling Wv.) The top leadership keeps close contact and ties with each property, but each paper retains the local flavor of each community...meaning if the community has a right tilt, so will that paper....same for left. The managing editor and publisher have a more equal sway with corporate. An excellent company that no one knows well- but will likely come out of this in much better shape that their more glitzy counterparts- because they don't leverage their company!

Lee spent heavily on internet service, but has no real vision....so they are now paying the price for it, and will likely flame out as soon as creditors finally give up and stop delaying the inevitable. MediaNEWS has a great leader in Singleton, and if anyone can find a way to monetize the web nationally I'd put my money on him. If he hasn't over leveraged already- not giving him time to figure it out. Ogden will focus their web locally, and will win that war one small town at a time. It won't be glitzy or flashy, but it will work...and I'll bet they find a way to transition as their communities require or demand it.

Jun 05 10:43 PM

[jbofen:]

readership reality - Here are some facts - did you realize that: More than 104 million adults read a print newspaper every day, more than 115 million on Sundays. That's more people than watch the SuperBowl (94 million), American Idol(23 million) or that typically watch the late local news (65 million). And, that: 61% of 18-24 yr. olds and 25-34 yr. olds read a newspaper in an average week and 65% of them read a newspaper or visited a newspaper website in the past week. And that: Average weekday newspaper readership declined a mere 1.8% between 2007 and 2008, and about 7 % since its peak in 2002. Compare that to the 10% decline seen in the prime Tv audience inn 2007 alone. Meanwhile, newspapers Web Audience has grown nearly 75% since 2004, to 73 million unique visitors a month.' Print and digital newspaper media remain strong and will emerge from the current environment an EVEN STRONGER multi-platformFORCE'. - from "The Reality About Newspapers"


On Jun 05 10:03 PM Richard Wakefield wrote:

> A long time ago, in the 70's, I was taught by the newspaper elders
> that the local newspaper is the community marketplace for news, ideas,
> opinions and marketing. That is why newspapers have value to readers.
> Enter the internet -- perhaps starting with sites like the Drudgereport
> and search engines. The "marketplace" concept began to break down.
> Readership was now in play!
>
> The fundamental problem for newspapers now, and has been for many
> years, is loss of readership. You can track declining readership
> into declining circulation. Inevitably, the shrinking franchise shrinks
> advertising revenue.
>
> In the 90's the youth began to shun newspapers. Now, those non-reading
> youth are middle-aged -- and they did not change their readership
> patterns.
>
> With the readership trends, one can only expect to see the traditional
> printed newspaper lose franchise.

Jun 07 12:42 PM

[jbofen:]

my comment appears above Richard Wakefield's June 5 post.

Jun 07 12:48 PM

[Relayer10:]

Jbofen's comment is almost verbatim from a promo ad campaign designed by the NAA...Newspaper Association of America. I ran the campaign in my newspapers too. The numbers in 2004-2006 were in decline, and the campaign was designed to provide a wake up call for the advertising world....as you can see, it worked really well...and newspaper publishers believed it...so they continued to gut their content....you see the result.

Jun 10 10:32 PM