Building our new house

From Medium:

I was struck by Jeff Jarvis’s recent polemic, ‘If I ran a newspaper…’ published on Medium.

In it, he quoted an unnamed editor’s description of the predicament he — and many of us — find ourselves in:

“We have two houses. One is on fire and the other isn’t built yet. So our problem is that we have to fight the flames in the old house at the same time we’re trying to figure out how to build the new one.”

He was, of course, describing the rock-and-a-hard place dilemma that’s beset legacy media brands for more than a decade now: We know print is declining fast, and the future’s digital, but the problem is most of our revenues are still in the former, and the latter will never generate the money we made back in the day.

I’ve lived in this cleft stick for most of my career. The legendary ‘tipping point’ is still talked about hypothetically years after it should have become a reality for more of this country’s legacy media — particularly in the regions. The tipping point comes when your digital revenue growth offsets your print revenue decline. Rather than waiting reluctantly for it to happen — or indeed trying to postpone it — we should have been doing everything to make it happen on our terms. Unfortunately, I think the industry dragged its feet for too long.

. . . .

We announced this week that we are creating a new, standalone and sustainable digital business that could be a model for similar enterprises across the UK and beyond.

At the heart of the new operation is a digital-only newsroom forged from the team that has made the fastest-growing regional news website in the UK for much of the past year. Thanks to my team’s efforts, we reach more than 50% of Brummies every week, and now we want to reach even more with our new approach.

At the same time, we want the new model to be completely self-sustainable, achieving a profit driven by programmatic and solus digital advertising, and not over-dependent on print upsell from legacy clients. There’ll be whole new revenue streams, too.

The new newsroom will be more than digital-first; it will be digital only.

. . . .

When you lose pounds in print, you only ever get pennies back online / we’ll never make enough money to have a newsroom as big as it was ten years ago.

True(ish), and true. Sadly, we know the future requires the business to be leaner and more flexible than we are now, and despite years of seemingly endless restructures and job losses, we will have to make further reductions. We are building the new model by asking the question: “What size newsroom can we afford, given what we know about our current and future digital scale, how much programmatic revenue we get, and how much new digital revenue we think is out there in the market?”.

Link to the rest at Medium

PG says the OP describes a constructive way to deal with disruptive innovation. “What would my business look like if I was starting it from scratch today?” It’s a much better management strategy than, “How can I preserve my existing business when the economics of the market it serves have completely changed?”

The more common strategy of downsizing, then downsizing some more, then further downsizing is self-defeating in the extreme.

  1. Employee morale tanks and stays tanked with deleterious effects on the enterprise.
  2. Talented new people who might like the idea of working in a particular business stay away because of justified skepticism about the long-term future of the business and a rational desire to avoid a sinking ship.
  3. The talent level of new hires is lower than that of veteran employees.
  4. Existing employees who can leave do leave, taking their experience and abilities with them.
  5. The percentage of staff who stay with the business because they can’t get a job elsewhere skyrockets.

PG considers himself typical of many traditional readers of printed newspapers.

Growing up, he pretty much read every newspaper that arrived in his home cover to cover every day. When he commuted to work by train, he bought and read one newspaper in the morning and another in the evening.

(Yes, my young friends, in large cities, some newspapers published every morning and others published every afternoon. Chicago had four major daily papers, two morning and two afternoon, plus at least a half-dozen other dailys devoted to particular audiences, African-Americans, for one example.)

When he didn’t commute via mass transit, PG had at least one daily newspaper delivered to his home, usually two.

A couple of years ago, PG observed many issues of the two daily papers he received were piling up, largely or completely unread. He stopped The Wall Street Journal, but still pays for access to the entire digital edition.

At first, he kept his subscription to the local daily paper because he has always wanted to support local news organizations. However, when a week or two would pass without him reading any physical papers, he quit renewing that subscription as well.

Perhaps based upon years of habit, PG’s delivery person has continued to drop the local daily on his driveway, despite PG not having paid for a subscription for several months. PG has wondered if the paper’s management is trying to artificially pump up its subscription numbers.

10 thoughts on “Building our new house”

  1. Adapt or die.

    And adapting later rather than sooner may mean having wasted time and resources trying to slow the dying that would have been better spent quickening the adapting.

    • It is better to obsolete your product yourself than to wait for the competition to do it for you.
      (In baseball, the saying is that it is better to trade a player too soon than to try to trade them too late.)

      In business, a lot of people were shocked that Microsoft turned ENCARTA over to a foundation and got out of the encyclopedia business as quickly as they got into it. (More or less.)

  2. It’s unusual, and refreshing, to have a business’s leadership say — uh oh, if we don’t reinvent our business from scratch someone else will. Either we can pull it off, or we all go home eventually.

    Very true, but very hard to look at straight when you’re an established firm with internal politics, financial expectations, and cultural habits.

    • The trick is to build the company with the right mindset to start with. HEWLETT-PACKARD did it. Microsoft, too.
      It’s early but Amazon looks agile enough to adjust to whatever comes next.

  3. PG, my local newspaper frequently tries the “free” delivery. After a few weeks or a month someone shows up at your door with a desperate, “Didn’t you love having a newspaper delivered to your door every day enough to subscribe?” Stinks of desperation.
    I quit getting the paper a decade ago when the then-carrier decided to go to weekly delivery of the daily paper and the company didn’t understand why I was cross as I was getting all the papers eventually.

  4. Look, if you are stuck between a rock and a hard place, there’s really only one question you should be asking yourself:

    What are you doing on THAT side of the rock?

  5. I stopped subscribing to my local paper a long, long time ago. If I’m in the mood to read one, I’ll buy one. Problem is that where I live, the five+ newspapers available to me as a reader pretty much regurgitate the same left of center spin that I’ve grown increasingly weary of reading.

    • Yep. Our local paper is called the “Arizona Red Star” for very good reason.

      I had a daily subscription many, many years ago.

      I got at least the Sunday edition many years ago.

      Then we no longer had a cat. And I finally realized that I receive more than enough grocery store flyers in my mailbox – for free! – to light my wood barbecue.

      They have an online edition that has everything the physical paper does. But, barring a staff turnover to rival the French Revolution for the outpouring of (figurative) blood, they’ll never get a penny from me again.

  6. I can’t remember the last time I bought a copy of the LA Times. It used to be a quarter and was THICK. Loved diving into it. Now it’s over a buck and THIN, THIN, THIN. Actually, SKIMPY would be a better description.

    More cost for less product isn’t a very good customer-retention policy.

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