Howard Owens is one of the smartest journalism entrepreneurs in the business. He launched The Batavian as a digital challenger to the Batavia Daily News in New York, and his small business is thriving.
I was interested yesterday to see that Howard had blogged with some advice for local websites competing with Patch. I had written about the challenge presented by Patch a few weeks ago, and was interested to see what Howard had to say. Not surprisingly, his advice on competition was more detailed and better than mine. But I had also noted the potential for turning Patch into a collaborator or a customer. So after tweeting a link to Howard’s post, I tweeted a link to my own.
That triggered a spirited Twitter discussion between Howard and me (a few others, including Andria Krewson, joined in) over whether collaboration with a competitor is even possible. Howard says it’s not.
Before I explain why Howard is wrong, I should make two things clear:
- Howard is a smarter, more experienced journalism entrepreneur than I am. You should give serious thought to what he says, even if you disagree with him.
- I do agree with him that every market is unique. He probably is 100 percent right for Batavia, and his advice might be right for your market. I don’t absolutely encourage collaboration; I encourage consideration and exploration of whether collaboration would be in your best interest.
I’ll give a simple example of how a company I worked for turned a competitor into a customer and continued competing: When I came to The Gazette, we had a separate office in Iowa City, about 30 miles from our home office in Cedar Rapids. Our separate office had news, circulation and advertising staff and we competed fiercely with the Iowa City Press-Citizen for readers and ad dollars in the Iowa City market.
While I was there, we cut a deal with Gannett, owner of the P-C, to print and distribute the Press-Citizen and to distribute the Des Moines Register (which also had competed fiercely with the Gazette back when it was a statewide newspaper). Gannett had shut down the Iowa City press and started printing the paper in Des Moines, a move that required earlier deadlines because the papers had to be trucked two hours back to Iowa City for delivery. That gave the Gazette a particular advantage in covering high school sports, because P-C deadlines could fall before some games ended. By printing in Cedar Rapids, the Press-Citizen got later deadlines (even later than ours, because we printed our paper first). So we were actually helping our competition in an area where we had a huge advantage.
But that was OK, because we were helping ourselves, too. We were generating more revenue from our printing facility, getting a better return from the huge investment in that facility as well as from the payroll of the printing plant (though we also hired some new people to handle the extra work). We generated more revenue from our circulation routes and our customer service operation. All of that was better for our business than the insignificant damage caused by helping a competitor get better deadlines.
We still tried to kick the P-C’s ass on coverage of Hawkeye football, University of Iowa news, Iowa City high school sports and major Iowa City local news. We still competed head-to-head with them for ads from Iowa City merchants. And we cashed some large checks from them for printing and distributing their paper. Competition and collaboration were both good business for us.
At TBD, much has been made of our competition with the Washington Post. But we also link to dozens of Post stories every day. Our business model is to be the one-stop place where people can come to find all local news about the Washington area, wherever it originates. That means we link to the Post and send it lots of traffic every day. We also send traffic to local blogs that probably also regard us as competitors and that certainly compete with us for attention and advertising. In fact, we have recruited a network of 179 local blogs and sites who have agreed to be collaborators, at least to a degree.
A part of Howard’s argument is that local ad dollars are finite. Here again, we disagree. They are not unlimited. But if a news outlet can generate more business for a local merchant, the merchant will spend more money with that news outlet. As @newspress noted in yesterday’s Twitter exchange, local online ad spending is expected to grow 26 percent this year. Howard notes correctly that national trends don’t necessarily translate to each local market.
Yes, if Patch is coming to your community, you might face fierce competition, and Howard provides excellent advice for meeting that competition (I would advise my friends at Patch to stay out of Batavia). But whether your competition is another newspaper, an established website or a new entry in the market, I would explore the possibilities for collaboration as well. The point of business is to survive and thrive, and you need customers to do that. Your competitor could be a good customer as well.