Thursday, September 22, 2011

Newspapers Beaten by the Web

A newspaper was always so much more to its readers than a printed page full of news. It was the place that provided local, regional, national and international news. It was also at the center of your universe, your community. It was a breakfast routine. It was utilitarian as well as informational.

Unfortunately, everything that newspapers once provided is now available on the Internet in an efficient, immediate, and less expensive format. Let’s review.

Newspapers provided news and analysis, breaking news, opinion, arts and entertainment criticism. Now you can keep up to date with minute-by-minute breaking news with RSS Feeds, Google News, newspaper online news alerts, or the Huffington Post. Winner: The Internet.

We turned to the newspaper for shopping information. We could check the latest discount prices for tires, or learn when department store sales began. It was where we looked for a job or an apartment to rent. Now, we get daily deals from Groupon, roommates from Craigslist, and direct offers in emails from the few surviving department stores. Winner: The Internet.

Although journalists didn’t like to admit it, newspapers were a form of entertainment and education. We laughed while reading Dilbert and other comics. We chuckled at the advice from Ann Landers. And we improved our Bridge game with moves provided by the newspaper column. Now, we can find all of that and much more, including educational or entertaining You Tube videos, from an array of internet sites such as,, even Plus we get to share with others who have similar interests. Winner: The Internet.

At least newspapers were full of helpful data: the closing stock prices, the starting times for movies, and obituaries. But Fandango will tell you what time the movie starts, what others think of it, and let you order a ticket. Who wants to see yesterday’s closing stock price when you can get up to the minute pricing from And the Web even now has obituaries and death notices. Winner: The Internet.

But at least a newspaper provided the glue that kept a community engaged and together. You couldn’t start your day if you worked in the U.S. government or national politics without reading the Washington Post, and the Los Angeles Times entertainment section was the “bible” for movie executives. But now people with shared interests turn to Facebook or LinkedIn to see what is “hot” in their industry. Winner: The Internet.

So it’s no wonder newspaper company stocks are no longer the darling of Wall Street. Newspapers made with ink and paper, delivered by trucks, will be around for some time, at least until the Baby Boomer generation dies off, but their profits and readership will continue to deteriorate.

In a recent Ad Age survey published on Silicon Alley Insider, “local news” and “coupons” remain the two biggest reasons consumers subscribe to a local newspaper. So if you are a newspaper executive, you have to be paying a lot of attention to the future of Groupon, which may eventually replace newspaper coupons, and AOL’s Patch, which is trying to deliver local neighborhood news on over 500 community sites.

I’m just glad I don’t work for a newspaper company any more.

Saturday, June 25, 2011

Newspapers Dying: The demise of Geographic Exclusivity

There are so many reasons why print newspapers are failing.

Mostly, people complain that newspaper content is available on the Internet for free, so subscribers need not subscribe any longer, even though in reality circulation revenues were usually not more than 20% of total revenues.

Or, more importantly, that classified advertising, the largest profit contributor of any newspaper, has been outdone by the efficiency of transactional web sites for homes, autos and jobs. Then there was the retail consolidation of big box stores, who hardly advertise, and chain department stores (only one advertiser rather than three or four). And the many new alternative ways in which a local merchant can advertise--see Google, Facebook, and Bogopod, to name a few. (Disclosure: I am an investor in Bogopod). Still, what few realize is that most of the newspapers that have actually gone “belly up” have been afternoon papers or ones that were owned by overly leveraged companies.

But one of the underlying reasons of this massive change in newspaperdom doesn’t get enough attention: the demise of geographic exclusivity. In the good old days, when I was a newspaper executive at the Los Angeles Times, newspapers “owned” a market. What did that mean? It often meant we were “the only game in town” for both editorial content and advertising; which, in turn, meant, lots of cash flow and extraordinarily high profit margins. Newspapers are capital intensive entities. It takes a lot of cash to build a printing press, but once built, the barriers to entry for others were so very high, that you had a near geographic monopoly. Newspapers worried about competing in neighboring geographies, but not about someone from overseas or across the country invading their core territory.

So if you were a reader in Fresno, California, your only choice for local news was the McClatchy newspaper or the TV stations (which generally didn’t do a very good job on news other than car chases and crime).

And if you were a merchant in that same town, you had limited advertising choices, the newspaper which usually had the greatest reach, a TV or radio station, or perhaps direct mail. That was it. The newspaper “owned” the market.

The Internet ended geographic exclusivity. Now you can get news from all over the world. You don’t have to rely on the foreign correspondent of the Los Angeles Times stationed in Jerusalem or London, you can quickly find a more comprehensive take from the Jerusalem Post or the Financial Times, and have it brought directly to you on your iPad by Pulse, Flipboard, Trove, or StumbleUpon.

More important even than the readership problem, and, the real reason the local newspaper business model is dying is that advertisers from around the world can now reach you directly. They can advertise directly to you and deliver their product directly to you. I still remember department store executives marveling at how powerful the Los Angeles Times was in this era, they could promote a sweater on the pages of the paper, and they would sell out of sweaters the next day. The consumer had no other place to go. . . .to hear about the sweater, to see it or to buy it. Now, the consumer can get to the sweater directly, on a multitude of web sites, use search to find it (and see advertising about it), see what other sweater owners think of it or even get a 10% off coupon by email.

Without geographic exclusivity, the newspaper business will never be the same. Advertising will simply not return to its rich levels. Newspapers may survive, but in a very different form, with less information, less frequency, and less impact. The challenge, of course, is to figure out new business models to support the important journalism that newspapers provide. Well, that’s for future posts. Got any ideas?

Tuesday, May 17, 2011

Memo to TV reporters: STOP SAYING 'TAKE A LISTEN.'

Note to TV anchors and reporters: Please stop saying "Take A Listen." Try "Listen to this," or "watch this," or even just "listen." I don't want to "take" a listen. I wouldn't know what to do with it if I took it. I don't even know what a listen is.

Even Greta Van Susteren, one of those very anchors, agrees.

It's bad enough that I watch too much over hyped, often boring, superficial cable news (at least I gave up watching local TV news programs when I could get the weather update from the Internet), but if I hear one more smiling, handsome TV reporter introduce a sound bite by saying "Take a Listen," I will take my leave and watch something else.

File this under pet peeves.

Tuesday, March 29, 2011

15 Ways to Generate Cash for your Community News (HyperLocal) Web Site

My co-author María J. Vázquez and I recently finished writing a case study on a hyperlocal community news site in Long Beach California, the Long Beach Post. As with so many of these entrepreneurial sites, the founders were doing a great job of journalism and technology. The challenge was on the business and sales side. How do you effectively generate revenues to sustain the enterprise? Here are 15 suggestions to consider if you are building a community news web business, or any web content business for that matter.

1. Webinar. Find a topic of interest to an audience and a particular advertiser. Have the advertiser put together a video to be aired on the site as a webinar. Readers sign up for it for free. The advertiser gets the names and emails of the attendees as possible sales leads in exchange for a sponsorship fee. A real estate agent might conduct a webinar on how to shop for a home, for example.

2. Microsites or Sole Sponsorships. Dedicate a portion of the site, or create a new one, to a single subject with only one exclusive advertiser. For example, all the content on a local high school team could be sponsored by a local car dealer.

3. Sponsored Newsletters. Send out a weekly email newsletter to subscribers on a specific niche topic, sponsored by one or two advertisers.

4. In-person Events. There are a whole range of possibilities here. Events can be high level training in a specific area of interest to local businesses, say “marketing your restaurant” to restaurant owners, in which an admission fee can be charged, or events can be open to the public and generate revenues by sponsorships. Business-to-business magazines do an excellent job of this. Check them out to see how it’s done.

5. Partnerships. Partner with other sites or blogs to sell advertising or participate in an online ad network. For example, find an online coupon site that will share revenues generated by readers who click through to it.

6. Google Ad Words. Although not usually a significant amount of revenue, some sites find this worthwhile, and very easy to implement.

7. Referral fees for product sales. Ecommerce sites like Amazon will allow you to put a “button” on your site and will give you a commission for any product sale generated by someone who clicks through from your site.

8. Paywall. If your information is exclusive and unique, that is, really unavailable anywhere else, readers might be willing to pay a subscription fee.

9. Archival fee. Old stories might be valuable to certain users. Consider charging for access to them.

10. Reader donations. Encourage readers to contribute to the site with a link on the home page for donations.

11. Advertising packages, premiums and discounts. Consider a wide variety of programs to encourage advertisers to participate. For example, a long term ad commitment has a discount, first time advertisers have a discount, referring another advertiser generates a discount, etc.

12. Sales incentives. Incent sales people to focus on a particular industry or type of advertising program by creating special one-time commissions.

13. Consultant services. Some publishers of community news sites have successfully generated substantial earnings from consulting services on such topics as local marketing, social media, and community building.

14. Store. If you develop content to engage and attract a certain niche of people, then why not go into direct sales yourself and offer products you know will appeal to them?

15. By-products. Journalists can also create products related to their activity or specialization. How about a book or training DVD?

Friday, February 25, 2011

Newspapers: Lessons Learned

This piece, by John Temple, former editor, president and publisher of the Rocky Mountain News, is a couple years old, but I hadn't seen it before. It tells the story of the demise of the 150 year old newspaper, with some powerful lessons for media and digital executives.

He notes: "Being a “great newspaper” isn’t enough in the Internet era. You have to know what business you’re in. We thought we were in the newspaper business. Working on the Web, you need to think of now and forever. At a newspaper, people largely think about tomorrow. Thinking about tomorrow isn’t enough anymore. Consumers today want services when, where and how they want them, and they want to be able to participate, not just receive."

His list of lessons learned:

Know what business you’re in.
Know your customers.
Know your competition.
Know your goal.
Have a strategy and be committed to pursuing it.
Measure, measure, measure.
Keep new ventures free from the rules of the old.
Let the people running a new venture do what’s best for their business, regardless of the potential impact on the old.
To compete in a new medium, you have to understand it.
Invest in R&D.

It's an important and worthwhile read!

Friday, February 18, 2011

Community News Online--Will it Work?

“There is a profound crisis taking place in American journalism.” That is the introductory line to the case study being published today by the Annenberg Center on Communication Leadership and Policy. My coauthor, Maria Vazquez, and I hope that this case, which focuses on the real life trials and tribulations of a four year old community news web site in a suburb of Los Angeles, will add to the admittedly parse academic literature on what some people call "hyper-local news".

Existing news magazines and newspapers face serious threats to their continued profitability and viability. The future outlook for local print newspapers is not good. However, in the face of this threat, thousands of blogs and hyper-local community news web sites have entered the scene. The accessibility of the internet and inexpensive technology have combined to lower the barriers to entry, allowing many budding entrepreneurs to launch new efforts to try to satisfy local information needs. But it is still very unclear whether these new “businesses” will survive. Much of the early attention on these start-up enterprises has been on the “news” or content side of the business, but it is the advertising or sales side of the business that is often the most challenging. And without revenues and profits, these businesses will not make it.

The local advertising market has always been the untapped Holy Grail in the media business and now is one the fastest growing ones. Billions of dollars are spent on Yellow Pages, Classified Advertising, Coupons, Direct Mail, Weekly and Daily Newspapers, Billboards, and Cable. The competition is intensifying with the entrance of new big online players such as Groupon, Google, Facebook, Yahoo, AOL Patch and Craiglist, among others. For the smaller startups it’s a messy and challenging business to secure those advertising dollars.

Our case study "Online Community News: A Case Study in Long Beach, California--What It Takes to Survive and Thrive" shows how local online journalism works in real life. It tracks the launch and execution of a community news web site in Long Beach, California, showing how difficult it is to develop a business model that will both survive and eventually thrive.

The case focuses on the challenges facing Shaun Lumachi, one of the founders of the Long Beach Post, who launched his “for-profit” venture in 2007.

When Lumachi and his co-founder Robert Garcia initially developed the idea of their new online community newspaper, they saw it as a “community service.” It was only after the web site was up and running that they realized it was also a business that had to generate a profit if it was to survive and thrive long term. (They actually did consider making the business a nonprofit but decided not to go down that path.) Similar to many others who have launched hyper-local community news sites, they focused initially on the content and the technology for the site before thinking through the business model, and particularly the challenge of attracting revenue to the enterprise. They did not start with a sales strategy but developed it over time, in a series of trials and errors.

At the same time, the site was quickly a reader success, attracting a growing number of visitors and great interest from community leaders. At one point, they launched a companion site focused on local high school, college and community sports. It won editorial awards, ramped up readership, and earned praise but it turned out to be a financial drain, and was eventually merged back into the original site.

The experience of these journalism entrepreneurs is similar to many others who are trying to launch new news and information online businesses. The obstacles they faced are typical, the challenges are many. The lessons learned are valuable.
Given the dramatic changes in the news business, and the financial challenges affecting large corporate media companies, there is a growing recognition that local independent online journalism may be a strong and viable alternative to print newspapers. As a result, there is a new interest in entrepreneurship in journalism.

For journalism professors and high school teachers, this is an excellent case to have students experience the real-life challenges facing journalism entrepreneurs. Case studies are a valuable teaching tool, especially in an area which is so new that there are no established “best practices” to study. Practitioners can best learn from others who are encountering similar obstacles to their success.

For a pdf copy of the case study, click here. To see an online version of the case, including video interviews, click here. Faculty members, if you would like a copy of the Teaching Note for the case, please email with your request.

Sunday, February 13, 2011

Private Equity Impact on B2B Publishing

A group of the industry's heaviest hitters—including Frontenac principal Walter Florence, 1105 Media non-executive chairman Jeff Klein, Apprise Media CEO Charles McCurdy, Jordan, Edmiston Group managing director Scott Peters and DeSilva+Phillips managing partner Reed Philips—took on the private equity revolution and the effect it’s had on the magazine industry, from the 2007 FOLIO: Show.