A long standing interest of mine has been the evolution of the newspaper industry. I’ve tracked the demise of the classified ad Industry on this blog in the past and the woes of the newspaper industry are constantly analyzed across the blogosphere and web. With the recent news of a 31% annual decline in total classified revenues, and the expectation of an extended recession, the newspapers are at a critical stage.
Chart showing the recent 39% decline in real estate ad spend
With the exception for a few national and regional newspapers, the inaction and consequent destruction of value is staggering. As Silicon Valley based start-up CEO and who has been bombarded with countless “surviving the recession” lists, I thought I’d turn the tables. Here is my plan for newspaper execs:
1. Focus on what you do best
For many of the regional newspapers, that is local news and commentary. There will always be a place for someone to cover the local news and analysis and the journalists at the local newspapers are the best to do this. It’s ok to ignore the national stories, or use wire services. Failure to become a must read local news service is a quick way to becoming irrelevant.
2. Develop and nurture your talent
Keep your great writers, don’t fire them. For some people, most news is a commodity; therefore it is more important than ever to build up the personal brands of the journalists and authors. Take a leaf out of the much more competitive world of TV news and local radio. The journalists are personalities, you tune in to hear an anchor or DJ, building that personal connection between journalists that take a view will help build relationships with readers and avoid commoditization.
3. Socialize your content
Many have started this, but it is often a half-baked effort. Follow the guardian and offer full RSS feeds . Build in Digg/facebook/share/email alerts, etc. and hire a good SEO expert to make all the content you have ever produced discoverable by search engines.
4. Quit, partner or outsource everything else you can
With the classified industry headed only one way, it’s time to re-think your strategy here. That almost certainly means getting out of these businesses and building partnerships instead that will be much more profitable. Partner with Monster/Careerbuilder for jobs, Trulia for Real Estate, cars.com for Autos, eHarmony for Personals. Many of these companies have partnership models like Trulia which offer free co-branded search experiences and revenue generating products that can quickly turn a loss making business into a profit center. Trulia has more than 100 partner sites live that enable innovative local newspapers and publishers to build a profitable world-class real estate solution in a matter of days. Reduce your business down to original content creation and sales, that will mean taking some tough decisions.
5. Build a decent website
Many of the regional newspapers still have horrible websites. Content management systems have evolved significantly since newspapers came online, the rise of blogging has created significant cheaper and easier to manage systems. If you don’t feel capable to do this yourself, get SixApart and some of the corporate services people to do it for you.
6. Re-focus and re-invent your sales teams
Online revenues from newspapers fell 3% in the last 12 months in Q3 2008, with an overall growth in web usage, the sales teams don’t appear to be working out well. While it is a complex problem, a key component is to build an effective sales organization that is structured around vertical or customer segments (rather than print and online) and then build in a commission plan to nurture the Internet advertiser.
7. Link to your competitors
Consumers want a comprehensive experience; it will almost certainly help not hurt your business. Kudos to the New York Times for implementing this in a bold way. While the execution may not be perfect, at least they are willing to innovate.
8. Engage, manage and nurture the community
Learn from Topix.com and build a huge local community around local news. Many sites have added commenting features and forums with mixed successes, positive for the most part. It’s easy to add commenting features as an afterthought, but that is when the hard work begins, ensure there are the resources and internal support to build a thriving community. It is the future and if ignored it will almost certainly mean increasing irrelevance in the media landscape.
9. Build networks out of your assets
Newspapers can learn from Internet companies and network their core assets (their brand, ads and content). Can they turn their sales force into an ad network and sell ads on other sites, or let competitors sell on their own site? If the technology, training and incentives are there, this will work. Network their original content onto other sites, network their contributors. Internet companies know how to tap into network effects, newspapers are only slowly catching up.
10. Constantly re-evaluate your print strategy
Personally, I still see lots of value in a printed publication; it is just that much more convenient and for many newspapers I can’t see it going away soon. It may make sense for some newspapers today and in the future to stop printing a physical newspaper. Have a plan ready that identifies at what point you stop printing the newspaper (circulation below a certain threshold, online revenue > 50%, EBITDA in print below a certain number, etc.) and be strict about it.
11. Radically cut costs
There is no doubt that newspapers are going to have a very tough time over the next 5 years and you constantly hear of lay-offs at newspapers, it’s a declining business, just bite the bullet and right size now. There is not going to be a bail-out of the newspaper industry. It is even more important for many of these companies which are overloaded with debt. Cutting costs is the only way they can survive.