Memo to Newspaper Publishers

When I left the Los Angeles Times in late 1998 to start a new magazine and internet publishing company, I never imagined how bad it could get at my long time employer. I had spent 15 rewarding years at the paper in a variety of legal and management positions. I knew the Times was caught in a time warp, refusing to recognize the real and serious threat of the internet. I knew it was a slow-moving aircraft carrier where committees and departmental fiefdoms slowed down decision making. I knew it was arrogant and didn’t care enough about the changing reading and buying habits of its readers. But I never expected it would be part of a company filing for bankruptcy.

In retrospect, it is easy to see where the newspaper industry, and the Los Angeles Times in particular, went wrong. The Times once had more than $350 million in classified advertising revenues, about 35% of its total revenue pie and the most profitable part of the newspaper. On a stand alone basis, the classified section actually made more money than the entire newspaper. Classified was dependent on real estate, help wanted, and automotive advertising, three of the categories that were to become the most successful on the world wide web.

In the 90’s in the newspaper industry, we paid lip service to digital media, and wasted money and time on partnerships, experiments and lots of talk. But we failed to actually internalize the real threat to revenue streams; we were more concerned about cannibalizing our existing dollars than going full bore into new enterprises. It’s the same reason why it was Apple that created a paid online music system, not one of the music labels.

Even now, with several newspapers in or facing bankruptcy, and an economic slide that has accelerated the inevitable shift to digital media, there are still many legacy publishers and editors unwilling to embrace the new era, with its changed readership and habits. Newspaper journalists--for all the “change” that they cover--are an incredibly conservative bunch who themselves are often unwilling to embrace change.

There are some things that newspapers publishers in general, and the Los Angeles Times in particular, should be doing to insure survival. First, acknowledge that print is dying. It is not a question of “if” it will die; it is only a question of when. It may not be in a year or two, and it will never completely disappear, but print simply ain’t gonna last as a viable self contained profitable medium. Internalize that, and you’ll make different decisions across the board.

The Los Angeles Times never grew up and decided what it wanted to be—it always wanted to be “all things to all people”. That was bad enough in the eighties, when the primary competition was the Orange County Register, but today, with competition from every corner of the world, it just won’t fly. The Times couldn’t decide whether it was a paper focused on the epicenter of the “Pacific Rim”, as one regime put it, or wanted to compete with the New York Times coverage of Moscow. It couldn’t decide whether it should compete with the LA Daily News in the San Fernando Valley, or the Washington Post. So it did everything. To survive in the new world, the Los Angeles Times, and every newspaper for that matter, has to make hard choices, and set priorities, rather than simply arriving at indirect priorities based on which departments get the fewest job cuts.

The Los Angeles Times should be able to exploit its brand name, journalism excellence, story telling and analysis capabilities and survive financially and journalistically, delivering a news and information product to readers in ways other than print on paper.

With that in mind, there are many short term efforts that will shore up profits, and maintain cash flows to fund innovation and development of an effective digital delivery system of great, but focused journalism.

In today’s blog, I won’t get a lot into the ways to improve on the web, but here are a few of the difficult, but critical steps, the paper should make to de-emphasize print and insure long term health and growth.

· Dramatically raise print circulation price—double or triple them--let circulation slide to a profitable level, and have users pay more of the cost of printing and distributing the print product.

· Simplify advertising pricing—its way too complicated; media buyers don’t understand it. It will also make it easier to sell, and require fewer sales people.

· Eliminate editorial zoning—do your geographic and demographic customization on the web site.

· Standardize production—limit pages, rethink section configuration, do everything necessary to reduce the number of press runs and related costs, even if you have to turn away advertising (but then try competitive pricing bidding for the scarce resource--print pages).

· Decide what kind of news coverage you do best, what’s really exclusive, invest in it, but rely on other providers for the rest. Take a lesson from blogger and journalism professor Jeff Jarvis, who has offered up a strategy for building a news room from scratch, and other ways to think about new business models.

· Develop new revenue streams. The B2B media has been using webinars (online training), white papers, email newsletters on niche topics, microsites and a slew of creative efforts to attract web advertising. Newspapers need to do a lot more of this, exploiting all the great content they already have.

I’m glad I no longer work at a newspaper. It’s been a difficult and depressing decade for newspaper employees in the ten years that I’ve been away from the business. But it doesn’t have to be. Make the hard decisions. Size the staff to the realities of today. And then join the digital world. There are so many important stories that can be told with new technology, networking abilities, reader contributions and multimedia.