The worst part about bad “newspapers made this huge mistake” stories is they spend the next week clogging my FB feed. Ugh.
— Chris Krewson (@ckrewson) October 18, 2016
I hesitate to give more attention to a study and Politico Magazine column that comforted newspaper nostalgists, but I must: Both are BS.
“What If the Newspaper Industry Made a Colossal Mistake?” asks the Politico headline, echoed in Jack Shafer‘s breathless lead: “What if almost the entire newspaper industry got it wrong?”
Well, the industry did get it wrong and did make a colossal mistake, but not the one that Shafer and University of Texas scholars Hsiang Iris Chyi and Ori Tenenboim think it made.
Summarizing Chyi’s and Tenenboim’s Reality Check research article in Journalism Practice, Shafer asks:
What if, in the mad dash two decades ago to repurpose and extend editorial content onto the Web, editors and publishers made a colossal business blunder that wasted hundreds of millions of dollars? What if the industry should have stuck with its strengths—the print editions where the vast majority of their readers still reside and where the overwhelming majority of advertising and subscription revenue come from—instead of chasing the online chimera?
In their research, which prompted Shafer’s column, Chyi and Tenenboim wrote that in the past 20 years “US newspapers, especially national and metro dailies, became more determined than ever to complete their transition from print to online. … ‘Digital first’ has become a mantra, a trend, and a strategy leading to the future.”
Shafer, Chyi and Tenenboim correctly chronicle the weak performance of American metro newspapers in the digital marketplace. But they wrongly conclude, as Shafer wrote, that “The key to the newspaper future might reside in its past and not in smartphones, iPads and VR. ‘Digital first,’ the authors claim, has been a losing proposition for most newspapers.”
Well, I used to work for a company called Digital First Media and at a newspaper-industry think tank, and I’ve visited more than 100 newsrooms and spoken at more than 100 newspaper-industry conferences and seminars, and I can flatly say that the industry never, ever adopted anything close to a digital-first strategy. (Update: Kurt Greenbaum responded on Facebook: “You’re being too kind. Not only did they never adopt such a strategy, they actively resisted tolerance of digital technology, much less acceptance of it.”)
The colossal mistake that the newspaper industry made was responding to digital challenges and opportunities with defensive measures intended to protect newspapers, and timid experiments with posting print-first content online, rather than truly exploring and pursuing digital possibilities.
When I worked at Digital First, I described our company’s name as an aspiration, rather than an achievement. I applaud our former CEO John Paton and our former Editor-in-Chief Jim Brady for leading us further and faster down the digital path than any other newspaper company. But that barely took us to the outskirts of digital experimentation.
One of the mistakes Chyi and Tenenboim made, and Shafer echoed, was to compare newspapers’ local print audience with their local digital audience and their digital revenues. What they failed to note is that non-newspaper companies have been building huge digital audiences, and collecting massive digital revenues, in those same communities.
Yes, it’s true that newspapers did a lousy job of generating digital revenue. But that doesn’t mean the opportunity wasn’t there. The Pew Research Center’s State of the News Media Report 2016 shows that total digital advertising revenue was $59.6 billion last year. Daily newspaper advertising peaked at $47.4 billion in 2005, before starting a decline that’s lasted for a decade and shows no sign of stopping. Even adjusting for inflation, digital advertising was $2 billion more last year (and rising) than newspaper advertising was at its peak. That’s the opportunity that newspapers missed.
Newspapers’ print ad revenue had dropped to $17.3 billion in 2013, the last time the Newspaper Association of America published figures. And the losses have continued. The Pew report, which examined figures from publicly traded companies, said 2015 resulted in those newspapers’ “greatest decline since the recession years of 2008 and 2009.” Clinging to print was assurance of a continuing downward spiral.
Huge startups such as Google and Facebook, large-but-smaller startups such as BuzzFeed and Shafer’s Politico and tiny startups such as the members of the Local Independent Online News Publishers all did a better job of pursuing digital opportunities than newspapers did. The newspapers’ colossal mistake wasn’t that they pursued digital opportunities too boldly but that they pursued them too timidly.
Shafer actually described the newspaper strategy fairly accurately: “to repurpose and extend editorial content.” He was just wrong about the “mad dash two decades ago.” Most newspapers moved reluctantly and slowly into the digital marketplace. Newspapers wrung their hands over every possible bad thing that could happen to them in the digital marketplace: “giving away” their product, “scooping themselves,” “cannibalizing” the newspaper. I heard each of those concerns dozens, if not hundreds, of times.
The few times I heard truly creative ideas for reporting news and generating revenue in the digital marketplace, they met with huge skepticism and open resistance. The newspaper industry settled for repurposing and extending editorial content in a marketplace that demanded and rewarded visionary new products.
I don’t know if a bolder strategy for newspapers would have resulted in better revenues and healthier companies. But I know this: The continuing collapse of newspaper advertising revenues is not because of a mad dash into the dangerous world of digital. And newspapers didn’t seriously try the recommendations of Newspaper Next, my Blueprint for the Complete Community Connection, Steve Outing’s membership model, Jeff Jarvis’s reverse meter or anything approaching a mobile-first strategy (and mobile advertising revenue has passed newspaper advertising). Maybe none of those strategies would have worked either. And maybe my proposed business model for obituaries wouldn’t have worked, and neither would any of the other revenue ideas that I and others suggested. But we’ll never know because the newspaper industry was too timid to attempt any of them.
Dave Winer explains the newspaper industry’s failure better than Shafer, Chyi and Tenenboim do: “Online journalism remains unexplored.”
Chyi and Shafer respond
I invited responses from Shafer, Chyi and Tenenboim. Here is Chyi’s email response:
“I cited your post about the Newspaper Next project in Chapter 3 (p. 35) of my book when I explained why I think newspapers’ technology-driven strategy is misinformed. You are probably not going to agree with me, which is fine.
“Here is a paragraph from that chapter FYI:
At this point, nothing is easier than blaming newspaper firms for not having acted more aggressively. Yet, what if newspapers were indeed more aggressive (whatever that means)? What if the fault is not in the newspaper industry but in Christensen’s theory and its impracticality? While the digital music model was often perceived as a success, when did we see a music label successfully transforms itself into a technology firm? Given the size and the local nature of typical U.S. newspapers, it is unrealistic to expect them to transform from the content business into the technology business or to compete effectively with online giants such as Google or Yahoo without taking industrywide actions. The truth is, as noted in the 2011 State of the News Media report, multiplatform newspaper firms have become increasingly reliant on aggregators and social networks to help draw audiences and must follow the rules of platform owners to get their content delivered. What’s worse, each new player takes a share of the revenue and, in most cases, also controls audience data (Rosenstiel & Mitchell, 2011).
I’m not familiar with Chyi’s book, though I presume I’ve linked to it correctly. I won’t comment on that passage by itself, and I don’t think I’ll be reading the book. But thanks for the citation.
Shafer at first asked where he had used the phrase “digital-first,” but conceded that point after I showed two places where he quoted the report using those words. His only other comment:
Also, socialism has never really been ‘tried.’
Twitter discussion of newspapers’ ‘colossal mistake
Here’s what would have happened if newspapers had stuck with print and didn’t move as quickly to digital: $40B in revenue obliterated anyway pic.twitter.com/en1EIPDjj7
— Mathew Ingram (@mathewi) October 18, 2016
@jackshafer Feel free to go all print. Have horses deliver them while you’re at it. @jeffjarvis @jayrosen_nyu https://t.co/D3tGono3ID
— John Paton (@jxpaton) October 18, 2016
Winning entry: connects newspapers and buggy whips (indirectly)… https://t.co/pMaoSHEjb1
— Dan Gillmor (@dangillmor) October 18, 2016
Jesus how I love the horse and buggy-whip metaphor. https://t.co/sJAWRyEeV0
— Jack Shafer (@jackshafer) October 18, 2016
It’s possible, maybe even likely, that newspapers were doomed regardless of what they did or didn’t do with digital https://t.co/1o7dJjTtMB
— Mathew Ingram (@mathewi) October 18, 2016
Agreed. No original sin. https://t.co/XnXkeUvhFr
— James Breiner (@jamesbreiner) October 18, 2016
This is the key. Original sin implies a) some pre-existing state of perfection and b) a single act that ruined it. Neither one is true https://t.co/oRRN6g2N6Q
— Mathew Ingram (@mathewi) October 18, 2016
@jackshafer The issue is whether their print products would be more successful without an online component. Not likely.
— Dan Kennedy (@dankennedy_nu) October 18, 2016
The low revenue digital product has kept the profitable print product alive? https://t.co/mA6aZE74ul
— Jack Shafer (@jackshafer) October 18, 2016
Profitable? Newspapers’ print ad revenues fell from $47b in 2005 to $16b in 2014. Digital hasn’t worked out, but different issue. https://t.co/qlpsHTcBBX
— Dan Kennedy (@dankennedy_nu) October 18, 2016
.@jackshafer To me, chasing online too hard cost $$$$. Protecting print too much cost time. Too many media companies got stuck betwixt.
— Jim Brady (@jimbrady) October 18, 2016
Myth that newspapers suddenly started giving away the product persists. When ~90% of revenues were ads; they were all but giving it away.
— Dan Gillmor (@dangillmor) October 18, 2016
Myths die hard. There’s a reason you can put 50 cents in a newspaper machine and take ALL OF THEM. That wasn’t where real revenue was. https://t.co/vBtBudDWVL
— Jim Brady (@jimbrady) October 18, 2016
Part of the problem is that even large papers until fairly recently measured themselves against other papers, not web as a whole
— Mathew Ingram (@mathewi) October 18, 2016
@jackshafer Also, they didn’t try to succeed at digital per se, they tried to protect the print product as much as possible. Not the same
— Mathew Ingram (@mathewi) October 18, 2016
You’re saying they should have flushed print profits and chased the digital dream? The point I’m making is their online dream failed. Agree? https://t.co/3Y2gfpdpaz
— Jack Shafer (@jackshafer) October 18, 2016
Yeah, but Mathew, *every one of them*? Nobody was as smart as Jeff Jarvis and could see the promised land? https://t.co/Dl2kKrvGiH
— Jack Shafer (@jackshafer) October 18, 2016
I wrote this a few years ago, “How Newspapers Tried to Invent the Web. But failed.” https://t.co/2ntqQxFk1U https://t.co/LnRnr69WrT
— Jack Shafer (@jackshafer) October 18, 2016
Oy. If we could turn back time. https://t.co/W5XZQJ0prs
— Jeff Jarvis (@jeffjarvis) October 18, 2016
Or my detailed proposal to DFM on how to pilot “digital only.” Too late. Too late.
More on this topic and a link to more about the DFM story.
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Newspapers failed to move their platform for community online. They shoveled stories, hoped for ads (making few changes to ad sales structures) and begged for subscriptions. They were and most still are lifeless.
Comments don’t count. Comments are shit. Create a better way of engaging one that doesn’t play into prejudices about your audiences.
Newspapers failed to reinvent the experience of holding a thing that told you what you cared about and who you cared about. They weren’t going to invent the smartphone but they could have figured out IM and other things social.
K-R knew with Viewtron that people wanted to talk to each other via digital channels, but they didn’t want to recognize that what newspapers are primarily about is providing space for people to communicate with each other with, around and in spite of the pros.
Newspapers fail to see themselves as conduits for community and instead still want to be reason pulpits, but mass is only one part of church. You need a kitchen and a hall nearby. You need classrooms, maybe a whole school and a couple of annual festivals. You need to host weddings and, in small towns, you need to be the center of social life.
For many readers the last thing in the newspaper that interested them was the news.
Make and manage public spheres. Stop calling them digital newspapers. We’re not living in Roger Fidler’s fever dream. We need to build a better Facebook one with better information managers who actually care about the communities they participate in and strive to manage.
Newspapers never actually managed communities. They only managed what communities thought/knew about themselves.
People (some, perhaps most) will want to be informed if there’s a social incentive to be.
Make digital public spheres. Manage platforms. Manage conversations. Serve.
We should stop talking about engaging communities with news and focus all our efforts on engaging news with communities. They are there. They are ill-served by other platforms.
You will not invent hyper-targeted marketing via social channels for national vertical plays. But you could create a network of networks worth marketing to and you could manage those spaces better than anyone else is doing now.
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Newspapers are still profitable. Digital news, by and large, is not. That is the literal bottom line and is why newspapers will endure and digital startups will continue to fall by the wayside. Digital mythmakers can scream until they are blue in the face, but you will not change the facts. I examined the annual reports of all publicly-traded (and thus publicly reporting) newspapers companies from 2006-2013, and NONE declared an annual loss on an operating basis during that period. This research was published in the Newspaper Research Journal in 2014.
Click to access NRJEdge.pdf
It also formed the basis of my book Greatly Exaggerated: The Myth of the Death of Newspapers.
http://www.marcedge.com/GEreviews.htm
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Newspapers are still profitable, Marc, because they keep cutting costs (mostly staff). And lots of digital news operations are succeeding. Those are facts that you can’t change. Digital advertising in 2015 was more than triple newspaper advertising. And you know which line was going which direction.
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Sure, but most digital advertising revenue goes to Google and Facebook, not to online news sites. Newspapers started as small businesses and they are on a trajectory back to that status. But that doesn’t mean they are going away any time soon. They have a business model that is scalable. Newspapers can be made bigger, and they can be made smaller. But as long as people want to read newspapers and advertisers want to buy space in them, newspapers will continue to be printed. Live with it.
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I hope you’re right. I love newspapers. But newspapers’ deaths started long before the Internet. The first paper I carried, the Columbus Citizen-Journal, died in the 1980s. The first paper I wrote for, the Shenandoah Evening Sentinel, died in 1993. And I was around for the deaths of the Des Moines Tribune in 1982 and the Kansas City Times in 1990. And the Internet didn’t kill any of them.
Your point about Google and Facebook makes the point of my post exactly. What is the core of Google’s business? Information. What is the heart of Facebook’s business? Connection to a community. Those are both core pieces of any successful newspaper’s business. We should have been developing businesses like that instead of trying to protect newspapers.
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[…] « The newspaper industry’s colossal mistake was a defensive digital strategy […]
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[…] there’s also the issue addressed by Steve Buttry that Shafer, Chyi and Tenenboim look at what the news industry has done online and conclude the […]
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“Digital mythmakers can scream until they are blue in the face, but you will not change the facts.”
The way I read it, Shafer’s column is primarily about his contest with them, the “type” designated by a phrase like digital mythmakers. Gurus would be another term with the same purpose, a little bit more hostile. As the contrarian, he needs someone to be contrarian to. These phrases supply that. It doesn’t matter whether they show up in the piece itself. They are part of its logic.
The contest is over: where does newspaper realism lie, and who is your guide to it?
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Well put, Jay. I’m interested that the term “mythmaker” is applied to a guy who quoted actual numbers of advertising revenue. And that a guy who has old newspapers hanging on his office walls is cast as someone cheering for the demise of newspapers.
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John Paton’s horse buggy comment is so wrong. Why does that guy actually have a voice at the future of news table, anyway? What did he do positive to advance journalism jobs except for job cuts that you speak of. Digital First was a total flawed and failed project and PR stunt. It didn’t fail because of “resources” or “patience” or “private equity” anything else digital first failures like to blame. I think it’s a shame you won’t actually read Dr Chyi’s work. I have read it and she makes a compelling case. Much of the quotes here are groupthink that has been circulating from the same group of people since 2005 – and none of these new models have worked. I think it is smart to reconsider the role print plays in local journalism and come up with creative ways to make both print and digital work. To ignore Dr. Chyi’s work is ignorant. Maybe Paton should have spent more time working on how to get his newspapers delivered. Even if by buggy.
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I’m not going to argue with you. I don’t claim that John or I or Digital First got everything right (and they sure aren’t now). But you can’t point to a newspaper company that is thriving by clinging to print and failing to innovate. You’re welcome to bitterness and your opinion. But you don’t have a single fact on your side. So it’s kind of pointless to argue with you.
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I’m not looking for an argument, Steve. I’m just frustrated that thought leaders like you aren’t really open to the idea that digital is not going to work on its own for news. I know you know that but the alternatives don’t work either. I don’t want to build a news company built on advertorials and events. It just is unreal to me that new research would come out on it and you guys make fun of it and it comes off as arrogant. BTW I know of one newspaper company that is doing pretty well with print. Maybe the idea of building a better print product is the best idea. But you guys wont even consider it.
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John, I know lots of people succeeding in digital-only news operations, more than are succeeding in print. Lots of them, many of them local newsrooms. They are built on more than advertorials and events (though both are valid revenue sources). I also don’t see anything that I said that was making fun of the research. (John’s horse remark certainly was making fun of it, but I was entirely serious in my criticism.)
But let’s be clear about what my criticism is: I think building a better print product is a fine strategy if your market is older people. To say I won’t even consider it is wrong. I actually launched a game-day edition of our student newspaper that we distribute to the tailgater audience. So it’s just false that I see no value in print.
But I see no value in research that purports that newspapers pursued digital opportunities aggressively. That is either an intentional lie or a possibly honest but false statement that’s rooted in denial and/or ignorance. Either way, research based on that premise has no credibility. I visited more than 100 newspapers and more than 100 newspaper conferences in the period Chyi and Shafer describe. I worked for a non-profit industry think tank that was preaching transformation. It’s just not true, not even close, to claim that newspapers made a “mad dash” into digital, as Shafer wrote. Newspapers dabbled in digital defensively and reluctantly. I worked for a publisher who called the Internet a “fad.” In this century. Even at Digital First, John and Jim and I were not able to overcome that defensive, print-first culture.
I’m happy to learn about the secrets of a newspaper that’s succeeding in a print-first culture, if such a creature exists (I know it’s not in Orange County, Calif.). But that has nothing to do with this nonsense about pretending that newspapers pursued aggressive digital strategies.
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By the way, I did read the report that I was commenting on. It was deeply flawed, based on a false premise. I read that whole report. Why would I read a book, even if I’m cited in it, by an author who wrote such bogus research?
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