I’ve Come to Save Newspapers and Magazines

My friend Larry Smith is one of the most thought-provoking people I know.  We’re both members of a group called the Internet OldTimers and in a recent exchange there, he talked about being a subscriber to the print edition of The New York Times.  I’m also a subscriber to the dead-tree version of the Times and Larry set me to thinking about why I still subscribe to the newspaper.  What do I like about the print version and how is it different than online?

  • Editorial judgments are more clearly manifested.  Placement means something as does inclusion.  Online, placement is quickly ignored and all stories look the same.  And with unlimited space, there’s no judgment expressed via inclusion.
  • Layout matters.  A glance at a section front page tells me a lot in one glimpse and the reading of 50 words.  That’s much less the case online where layout is so blindingly similar from story to story, site to site.
  • Sections matter.  As I move from section to section, my mindset clearly changes.  Online is a much more random journey with few boundaries and as a result, either the mindsets don’t change very much and/or they’re jarring when they do.
  • The delivery mechanism is well-suited to the use of the product.  Paper is wonderfully portable.  I read it continuously from the bed to the bathroom to the kitchen to the train.  Online is bumpy and with few exceptions I don’t have a seamless experience across devices (although there are some interesting initiatives in this regard and I have high hopes for it once we finally bury this notion of the “three screen experience” to be replaced by the “integrated any-screen experience”).
I like what some publications are doing on the iPad (e.g. Sports Illustrated and Autoweek) and what the Times itself is doing with its Google Chrome app.  (I’m not mentioning Rupert Murdoch’s The Daily because first, I haven’t seen it and second, I don’t like talking about Murdoch.)  The Times’s Chrome app much more closely represents the newspaper experience.  It’s familiar and preserves the assets I mentioned above and brings some additional value to online via contextual linking.  But it doesn’t go nearly far enough.
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More importantly, I think what the good iPad publications show us is that the online news experience is not a newspaper or magazine brought online.  It has to be a multimedia tour de force that brings new elements to the publication.  It combines the best of newspapers with the best of television with the best of the Internet.  We’ve gone through this with the addition of other media.  Radio wasn’t merely reading the newspaper.  TV wasn’t merely adding pictures to the radio.  The great Internet “publication” will combine elements of all that has gone before it while adding those items that are uniquely Internet, including broad linking, commenting and sharing, creating an immersive, social experience.
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Now that I’d pay for.

Saving Newspapers? Amazon Introduces a New Kindle

Let’s get this straight right away.  The new Amazon Kindle DX has nothing to do with solving the root causes of the problems of newspapers.   The top 5 reasons the Kindle is not the solution:

  1. At a price of $489, this is a niche subset of what remains a niche category.
  2. Newspaper subscriptions are only available in areas where the paper editions are not available.  Yes, this is clearly early and is likely to change but that tells you what the papers are thinking about things now.
  3. The existing Kindle (cheaper and more broadly available) already offers subscriptions to 37 newspapers at $10/month.  Form factor is not the only reason keeping these versions from being a success.
  4. Amazon keeps 70% of the revenue from newspaper subscriptions.  It takes a LOT of subscribers at $3/month to make money.
  5. Articles on the Kindle do not display ads.  This too will/must change.

Let me note that the DX may be a revolutionary product for its other market, college textbookss.  I’m not going to cover that here.

I think all the discussion on the future of newspapers has missed a critical point.  Much of the discussion has focused on the broad availability of content from multiple sources and also mention the growth of “citizen journalism,” be it blogs or Twitter.  So what does this discussion miss?  There are two related issues which combine to fundamentally attack the business model, not the product or content.

First, how do people get their news today?  While some of us go directly to newspaper sites on the web or get their electronic summaries in our inbox, news is more commonly found via web portals (e.g., MyYahoo or iGoogle) or via a Google web/news search.   When this happens, the first monetization opportunity comes not to the news source but to the aggregator.  Google and Yahoo have seized the upstream revenue opportunity and have diffused the downstream opportunity by making the “choice” of news source less relevant.  You go not to the source you favor but rather the one that appears highest in the search rankings.  You may even never make it to one of the downstream sources, instead going to your portal’s newswire feed from a source like AP or Reuters.  Ultimately, a considerable portion of the audience never makes it to the newspaper site.  Newspapers, Google is not your friend.

At the same time, the core monetization engine of newspapers — advertising, not subscriptions — is under assault from many angles.  When the obituary of newspapers as we know them is written, the first major illness should be listed as Craigslist-itis.  Category after category of listings has moved on to the web where things are cheaper, more timely and more effective.  And if you think the bad news is over, you’re mistaken.  Another staple of newspapers — legal notices — will find its way to the web sooner or later, probably sooner.  Already some heavily regulated marketplaces (e.g., drug advertising) can use web notices in lieu of print lineage.  It’s only a matter of time before governments realize that web listings, while not universal, are every bit as “available” as print notices and are more “accessible”.  In other words, the affected audiences are more likely to find this information on the web than they are in the newspaper.

Are newspapers doomed?  In their current state, yes.  Period.  How would I reinvent the industry?  Here are a few thoughts:

  • Local is not your salvation.  Niche audiences are very hard to monetize.
  • Digital paper is important.  When the price point of a newspaper-like device falls under $100, you’ve got a market.
  • Look at what’s going on in the netbook space.  Not so much from the point of view of a cheap device — that’s obvious — but rather the emerging discussions with cellular carriers where, much as is the case with today’s cell phones, the carriers will subsidize the price of the device to drive network usage.  I’m not sure what Amazon’s revenue relationship is with Sprint, the network carrier for the Kindle, but there’s clearly money there to be divvied up.
  • Two models:  Hulu and The Week.  What these both have in common is aggregation.  Curiously, the best vision in this regard, The Week, is a weekly print publication.  I find it a compelling read as it looks at the top news of the week from the perspective of multiple newspapers.  A single story might give me regional US slants, a European snippet or two and something from an Arabic perspective.  What makes these two sources compelling is their aggregated nature.  From a consumer’s perspective, it’s a single destination where I’m likely to find what I want.  From an advertiser’s perspective, it’s an aggregated audience.  The bigger the audience, clearly the better the monetization opportunity.  If a site can achieve a critical mass (which I’ll leave undefined for the purposes of this discussion), it can broaden its advertising base and achieve some independence from Google or the advertising networks.  Newspapers have largely not done that.  Aggregation may be their only salvation.
  • eBay partnership.  eBay has its own challenges.  At some level, Craigslist has delivered an important localization the eBay hasn’t.  When the shipping price of a product is greater than the price of the product, you’ve got a market inefficiency.  By making things local, Craigslist has become the first destination for many products that otherwise would have ended up on eBay.  I know I said “local is not your salvation.”  However, it’s a start to monetization.  Leverage the eBay opportunity and combine it with the aggregated opportunity I talk about into a fundamental redefinition of your revenue model.  Much as bricks-and-mortar retailers have one-upped dedicated web retailers by offering physical pick up and return, so to can newspapers combine the benefits of local with the benefits of global.

 The newspaper is dead.  Long live the newspaper.  Digital paper, aggregation and savvy partnerships.  These three can redefine the newspaper.

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