Part two in a three part series on the changing economics of the newspaper business. You can find part one here.
How hard is it to attach online video to a developing news story? Can one editor put the narrative together in print, online, video, and interactive tools?
If the answers to those questions are “hard,” and “no,” respectively, it’s time to reconsider the organization of your newsroom. The internet has already changed the basic economic rules of providing news, which means that it’s also changed your competition.
The most significant challenge this new market introduces is the fundamental shift that needs to happen in the newsroom. Fortunately, other papers are already charting the territory, and finding it profitable.
To understand why these changes are necessary, I’m going to tell you about supermarkets.
Before the supermarket existed, people would shop for meat at a meat market, bread at the bread shop, fruit at the fruit stand, medicine at the drug store, and so on. Each store would specialize in one thing, and if they were best at it, they’d get the business.
But in 1930 Michael J. Cullen opened the first American supermarket, called King Kullen, and people started to realize how convenient it was to have everyone in one place.
The supermarket doesn’t have to have better cuts than the meat shop. It’s not even competing with the meat shop—the supermarket is selling an entirely different product: convenience.
The internet changes the news game in the same way that the supermarket changed the grocery game. People used to get some news from television, some news from radio, and an entirely different kind of news from papers. They did this because no one medium (TV, radio, paper) could really house all three types of content.
The internet can provide four.
The online news product
Newspapers, along with TV stations and radio stations, are now selling an entirely different product—an online news product. The online news product contains text and images, video, audio, and interactive elements.
For many newspapers, providing an online news product instead of a print one means rethinking the way the newsroom works.
It means hiring staff who can handle online user-interfaces and create a compelling web experience. It means hiring a development staff—and that doesn’t mean just one developer—who can build and maintain the tools used by both newspaper staff and by online readers. It also means investing in community managers and retraining staff to think in terms of two-way communication.
But perhaps the most daunting challenge created by the internet is the shift in the market itself; the mature newspaper industry is being forced back into startup mode.
Suddenly, newspapers doing the exact same thing they’ve been doing for decades are showing losses, not 40% profit margins. In this situation, it is desperately important than newspapers avoid learned helplessness.
In 1975, Martin Seligman taught a dog to give up.
Seligman put the dog on a shock collar that would, without fail, shock the dog. At first, the dog would howl and yelp and run in various directions trying to find out how they could avoid the consistent electrical pain. Nothing worked, and eventually the dog gave up trying to escape.
Then Seligman took the same dog, and put him on the unpleasant side of a two-sided cage. One side shocked the dog, the other side did not. The dog never even tried to get to the other side of the cage.
No matter what newspapers try right now, they’re unlikely to turn a profit.
Like all new markets, it will take time before online news will support a set of mature businesses. But eventually it will, and the best thing a company can do is invest in capturing the new market.
The important thing to do now is to grow your market share, so that when it does start making money (like search), you’re Google, not Microsoft.
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