A few weeks ago I attended a publisher conference in Santa Fe. It was probably the best one I remember for the alt-weekly crew. It was a smaller gathering of publishers-only and the continuity strengthened the take-away value.
It took a little time to absorb what I observed among this group of earnest publishers grappling with a media and financial rug being pulled out from under them in recent years. I was surprised to hear the diversity of experiences and interpretations of the market disruptions occurring. I knew there were differences based upon market size and maturity of product. But what I observed in individual perspectives were differences based upon personal interpretations of the bigger picture and how people respond psychologically to major change.
It's been years since I've read news in print form. Sure I pick up publications from time to time to study what's going on, but it's more an analyst's view to see how the business is doing. I'm not in love with, nor do I have sentimental attachment to the medium. I realize what a huge difference that makes when assessing the current market situation and the dilemma facing publishers who own newspapers and magazines.
One of my favorite anecdotes portrays our unwillingness to close off options and open to other ones that might be our salvation. The Bushmen of the Kalahari have an ingenious way of capturing monkey prey for dinner. They rely on the monkey’s innate refusal to close off an option even when faced with imminent death. The Bushmen bore a hole in the trunk of a tree and place food deep inside the hole. The hole is just wide enough for the monkey to slip his hand through to grab the food. However, once he makes a fist to hold the food it doesn’t slip back out. That’s when the hunter approaches with his bow and arrow. The monkey makes for a good sitting target as he won’t let go of the food to flee the scene.
So, what options are publishers holding on to? That print will either rebound when the economy does, or it won't decline in 'my market' the way it is elsewhere. The corollary is that I don't have to do much to change my organization. Interestingly, a survey of homeowners just after the housing price bubble burst revealed that nearly 7 out of 10 homeowners believed that the depreciation of home values affected others, but not them.
What is it in our nature that makes us think we are somehow immune to major shifts? How do we apply our thinking to interpret data and circumstances that produces such powerful rationalizations?
I can think of two companies that held on like the monkey does, and how outside observers can so easily see the mistakes, but the insiders can't until it's too late.
Kodak had faced major market disruptions of new technology twice in its illustrious 150-year history. It rose to the challenge quickly and emerged stronger than ever both times. As early as 1981, Kodak had accurately analyzed the market and knew that digital photography was the future having developed the technology themselves. But, they rationalized that by "enhancing" traditional chemical and paper photography with digital they could remain competitive and maintain market share. It was that fatal in-between strategy that killed them. They couldn't accept that print photography was going to shrink to one-tenth its previous market size and that digital photography would rule the day. Keep in mind Kodak had enormous resources of capital and research facilities. It was lack of vision and acceptance of market realities that prevented them from acting on what they knew.
Swiss watch makers behaved similarly when semiconductors became readily available. It was commonly known in the watch industry that digital watches were more reliable, more accurate and could be produced more cheaply than traditional watches. The Swiss developed a quartz-powered watch. But, they had so much investment in traditional watch making that they decided to slowly introduce the quartz-powered watch over a long time and keep the price high as a luxury item. The Hattori Company in Japan, also traditional watch makers, viewed using quartz-powered watches differently and immediately established Seiko as the world's number one brand for standard watches. Swiss makers were nearly pushed out entirely.
Print periodicals, if they will exist at all in five years, will be much smaller in market share than they are now. We can debate how much smaller, but my bet is closer to what the print photography share shrunk to.
While it's hard to face this reality, waiting and hoping that something will change to reverse the trend is fruitless. Publishers need to right-size print operations immediately to free up resources for development of the new. The in-between strategy employed by Kodak and Swiss watch makers doesn't work. There are ways to right-size and extract a few years profit out of it before it dries up completely.
Let go of the food. You'll find it somewhere else. The world needs independent thought and journalism that cuts against the grain. It would be a shame to lose this voice, if even for a while. No doubt someone will create the new model and the voice will survive. I would love to see it come from this group of eccentric, creative people.
Added for other reading on the topic:
It has been the fashion for at least a decade for consultants to predict print's death (or near death, as it says here, like film photography) in "five years."
I have heard this most often from people selling internet/digital publishing services.
Posted by: bill | November 27, 2008 at 08:12 AM
Reply to Bill's comment above:
So, the digital revolution that's been going on for over 50 years is fomented by a handful of digital consultants selling wares to print publishers? How do I get in on that game?
Present an argument, a thesis, anything that points to a contrary conclusion. We'd all love to hear it.
Posted by: Terry Garrett | November 27, 2008 at 08:54 AM
I'm always interested in discussions about the future of newspapers, but that isn't what you've done. You cite examples of businesses that didn't adapt, but don't give any credit to the newspaper industry for putting huge resources online. Newspapers haven't stuck their collective head in the sand. They have embraced it even before they've figured out how to make money from it.
The reality is that online advertising doesn't yet support the content creation readers expect from their newspapers. The print editions subsidize the online versions. Just look at the Huffington Post for an example.
You also don't make any case why print will be dead in five years. For all the bluster about the ascendence of everything online we all still go to the grocery store, shop at big box store and read newspapers. Even college students are reading newsprint: http://www.medialifemagazine.com/cgi-bin/artman/exec/view.cgi?archive=318&num=6184
Newsprint is cheap, disposable and easy to use. It's the perfect vessel to transport information to consumers. It needs to no batteries -- no power source at all. It can be misplaced or thrown away. It's recyclable and relatively easy to reuse.
Newsprint is off line and let's one explore the page or pages quickly, sort of like browsing a book store. Consuming online is efficient if you know what you want, but if you just want to discover, a book store offers an enjoyable environment too.
The same goes with consuming information online. If you're opposed to the Iraq War you can go online and find plenty of information and commentary that backs up your point of view, but if you're not sure or want more information about the war and world affairs in general then browsing newspapers and magazines offers a process of discovery. News Corporation's CEO Rupert Murdock explained this in a New York Times interview last year when he said one of his great enjoyments was coming across information he wasn't seeking in a newspaper, but turned out to be of interest.
Reading general interest newspapers and magazines should be a process of discovery. Unfortunately, too many daily newspapers offer the same predictable information that is available everywhere. That is a failure of the newspaper, not the medium. This is why many of the drab paid daily newspapers are losing readers year after year.
The availability of so much information online means that newspapers must get better. My point is not to divide digital and analog sources of information, but to point out that they both have their places in the consumption of information, just as one can simultaneously shop at Amazon and a bricks and mortar Barnes and Nobles.
This isn't an either or proposition. Newsprint needn't disappear for online news sources to thrive.
Reply from Terry:
Jody, please see another post on why I think print publishers have failed to respond proportionately to the digital environment. Also, the slide show addresses some of the points you raise.
http://www.bizasif.com/dont_panic/2008/10/news-content-ec.html
My point is not that print will be dead or not, that prediction is speculation based on trends and my interpretations (as well as many others). My point is that at least it’s obvious that market share has and will continue to shrink and that print companies need to right-size operations to remain profitable in order to apply resources to development of new ways to satisfy audience and advertisers. Right-sizing is a huge challenge to create new business models to support print given the new market realities.
You say:
"Newsprint is cheap, disposable and easy to use. It's the perfect vessel to transport information to consumers. It needs to no batteries -- no power source at all. It can be misplaced or thrown away. It's recyclable and relatively easy to reuse."
As an end product it is disposable and easy to use. But I don’t think you can make the case that it is cheap or easy to produce and distribute. Production and distribution favors digital enormously.
Print periodicals are static databases. Some people may prefer that as a medium. The loss of classifieds though clearly shows that people prefer digital, dynamic databases for that content. Will those preferences extend to other content types? Most likely. The discovery process in the digital world for different points of view and for the range of topics is so superior to print that it can’t be even considered a selling point for print.
As a side note, Rupert has on numerous occasions chastised the print industry severely for under-investment and lack of initiative in moving to digital.
In most cases I agree with you about the tyranny of ‘or’. Unfortunately markets are drawn based upon preferences that determine success or failure of an enterprise. Traditional media (print, radio, TV) have relied on exclusivity and audience engagement. That has changed. Digital doesn’t require print to fail in order to prosper. But print is diminished by the prosperity of digital. And that is why I argue for right-sizing print operations to meet this reality.
Posted by: Jody Reese | November 28, 2008 at 07:34 AM
Terry, thanks for your thoughtful reply. Your main point about newspapers (especially paid dailies) needing to rightsize in on-point. As classified revenues move to the web -- where they belong -- newspapers will have to earn their income from display ads. That's very doable, but does take a great sales department (an industry-wide weakness). To be fair to newspapers most classified ads aren't searchable line ads any more. They are display in the classified section. Auto and real estate will come back to some extent as those markets get stronger.
The problem with search is that it's search. Static media, as you call it, is a more useful way for the seeding of product demand. It's selling.
Newspapers, television, film, magazines all offer compelling products. The web can be an excellent way of delivering these products inexpensively. But if that delivery process excludes significant advertising avenues then it's not a successful delivery method.
I would argue that we haven't figured that part out yet. The idea to hit the door full force before we know what's on the other side seems foolish. Peeking through it seems more reasonable.
I actually think newspapers have made a mistake in not thinking strategically about the web. Why post all your stories online? Why not use the web for classifieds and searchable databases of old stories and events, community forums and so on?
They've moved without much thought, not too slow. There is a difference.
Posted by: Jody Reese | December 02, 2008 at 11:32 AM