Thursday, January 15, 2009

Requiem For A Newspaper, Part II: The Road To Online

I explained in Part I why the P-I as a print newspaper is dead. But let me rehash some points I and others have already made.
  1. The P-I as we knew it is dead, because newspapers are dead. The ink-stained wretches may clutch onto false hope that someone will save it, but it's over.
  2. Journalism is alive and well, though. And I've already seen one too many people talk as if losing the paper means losing the only journalistic voice in town. Between radio, TV, and blogs, there's still plenty of journalism in this town. It's just going to be… different.
  3. Hearst shuttering the P-I only delays the Times' funeral. Before Friday, the Times wasn't going to see out the summer. Now, they got, at most, two more years of life. But the Blethens are cash-starved and running out of things to sell. Going non-profit won't save them from their business model. And they've been very, very backwards online, castigating bloggers where the P-I embraced them.
  4. This is more about the onerous JOA than Hearst losing money. Apparently, Hearst and the P-I have been pushing hard for a greater online presence, but the Times had to say yes to the initiatives, and they consistently said no. Killing the JOA, even if it means killing the P-I in the process, puts Hearst in control of their own destiny in the Seattle market, rather than still in the hands of the Blethen family.
  5. No one has ever done a true, daily, online-only newspaper wholly independent of any other media source or revenue stream. No, really. And before you start saying Crosscut, look at it. It produces one, maybe two articles a day. Add that all together and you get the output of a weekly newspaper, like the Seattle Weekly David Brewster used to run. Every online newspaper up to now has depended on revenue from elsewhere to keep itself, mainly from ads sold in the dead tree version. Yes, that means there's never been a successful online-only newspaper, but it also says that there really is no business model for an online-only paper. The P-I going wholly online will be a first, and comparing it to other web models pre-supposes a great deal.

It seems like going online-only, in the long term, is a smart business decision. Five years from now, being first-to-market with an online newspaper will give you huge structural advantages over all your competitors. Even if there is no model yet for a wholly online paper, five years from now there probably will be. And right now, the old newspaper model is broken. So, if Hearst or someone else with money is willing to gut it out, they will be positioned to dominate the market when the stars do align.

With that in mind, this is what I'd suggest the P-I's owners should think about the day the end comes.

  1. Be strategic about whom you're keeping. Ideally, you want to cut all but 20 people. Hang on to a couple of sales people and IT folk, natch, but what you really want are the most passionate journalists and editors left on that staff, the ones who are willing to be a little idealistic and eat some ramen for a few years. And you want writers who not only know and understand Seattle, they know and understand the online space. The folks who are anti-online or in the least disdainful of online you need to show the door.
  2. Treat this like a Web 2.0 tech startup, not like a newspaper. I'd start by breaking the lease on the office space and telling MOHAI to come get their globe. Hand your reporters laptops and bus passes and coffee cards. If you need to have a meeting, rent a coworking space like Office Nomads. Stay lean. Scarcity should drive, not paralyze. Use free web tools to organize. Pay cash. Avoid adding staff until you can afford it.
  3. This will infuriate the Guild. So offer them two choices. They can either choose to continue representing everyone who is left — with massive concessions to the new economic reality and the startup mentality, or they agree that they won't attempt to (re)organize until the chasm has been bridged — and when they do, you will not stand in their way. Neither one is really palatable to the Guild, and the history of unions in online companies can be written on a cocktail napkin, but in five years the Guild may not have anyone left to organize.
  4. Investigate, uncover, watchdog. Seth Godin today really nailed why we value newspapers as a community:

    [after going through a litany of things he won't miss about newspapers] What's left is local news, investigative journalism and intelligent coverage of national news. Perhaps 2% of the cost of a typical paper. I worry about the quality of a democracy when the the state government or the local government can do what it wants without intelligent coverage. I worry about the abuse of power when the only thing a corrupt official needs to worry about is the TV news. I worry about the quality of legislation when there isn't a passionate, unbiased reporter there to explain it to us.

    Punchline: if we really care about the investigation and the analysis, we'll pay for it one way or another. Maybe it's a public good, a non profit function. Maybe a philanthropist puts up money for prizes. Maybe the Woodward and Bernstein of 2017 make so much money from breaking a story that it leads to a whole new generation of journalists.

    The reality is that this sort of journalism is relatively cheap (compared to everything else the newspaper had to do in order to bring it to us.) Newspapers took two cents of journalism and wrapped in ninety-eight cents of overhead and distraction. The magic of the web, the reason you should care about this even if you don't care about the news, is that when the marginal cost of something is free and when the time to deliver it is zero, the economics become magical. It's like 6 divided by zero. Infinity.

    Readers can get their local and national and neighborhood news, TV listings, comics, sports scores, and Target circular from the Internet for free. Duplicating those things on your site costs you time and effort you could better spend on the things that make a newspaper a public good, like uncovering graft and corruption, or explaining the pros and cons of a ballot measure, or making sure the poor and needy aren't getting ripped off or abused by the rich and powerful. We know papers do this, and they do it well. Focus on that. If you can afford hanging on to your AP wire contract, then hang onto it, but don't let it be the core focus of your enterprise, not when you can read the AP wire through Google News.

  5. The bloggers and the journalists should be friends. West Seattle Blog and Capitol Hill Seattle, right now, are handling spot news in their neighborhoods far better than all other local media. Don't do their job. Make their jobs easier. Use your expertise to do what they aren't trained to do or what they don't have the time or ability to do. Do NOT kill the P-I reader blogs; instead, use them to fill in your coverage gaps. Promote good posts and good writers. Aggregate the community stories. A good rapport with the local blog scene will also mean they'll go to you with stories — and not to the Times.
  6. Your goal: A social news media network. If you do it right, the P-I will be the nexus of a news network that covers general and niche stories, one that has professional journalists working alongside kids with camera phones to serve the public good, one that promotes the good writers but also is not cliqueish and open to any and all readers. (This last bit is important; lurkers will make up a majority of your readers, so make them feel at home and not at some party where they don't know the inside jokes.) Everyone one of us is a news gatherer; find a way to turn that skill into something collectively powerful. (And oh, if you have a social network, then you have an advertising network, too.)
  7. If you are going to charge for content, charge for content people will pay for. No one is going to pay for your opinion. Opinion, after all, is a fungible resource on the web. They'll pay for fantasy football insider data, though.
  8. Finally, do NOT pay big salaries for "top talent." They will only drag your bottom line down. Instead look for talent with experience in startups or in non-profits, people who won't ask for six figures and won't twiddle their thumbs looking important but will throw themselves into the position. I am still amazed how many companies overpay for big name tech people, even though the excess of the dotcom bust was only eight years ago.

One last thing: A few people have said that an online-only newspaper won't work because it's too generalist and not a targeted niche. They keep forgetting that cities are themselves niches. If they weren't, then the concept of local news itself is thrown into question. People have been looking to local news media for information and advice since the advent of the printing press. The question shouldn't be about whether an online news site has the readership volume to sustain itself. The volume is there. The question should be whether such a site will generate enough income to employ journalists to do the public good.

Tomorrow: I address the gleeful conservatives.

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