WealthEsteem.org :: Psychology of the Deal

Bill Wyman wrote a wordy, erudite and brilliant two-piece article at splicetoday.com entitled Five Key Reasons Why Newspapers Are Failing (and part 2). While I haven’t blamed editors and journalists in my post Business Model for News, I do agree with Bill’s assessment of their culpability.

Bill’s piece has received some play and is well worth a read to see what excess playing to Wall Street’s demands can get you.

The major take-home for me was his suggestions for the future. This part has been pretty much ignored in the discussion so I’m reproducing it here. I’ll remove it if Bill or Splice Today want, but it’s a great manifesto to build any business by.

If I were running a chain of papers, here’s what I’d do:

1)    Go hyper local; devote all resources, from reporting to front-page space, to local news. No one cares what the Pittsburgh Post-Dispatch has to say about Iraq.

2)    Redesign the websites to present users with a single coherent stream of news stories and blog entries. Create simple filters to allow them to tailor the site to their preferences.

3)    Tell the union you won’t be touching salaries, but that all work rules are being suspended, including seniority rights. Tell all reporters that they’re expected to post news if word of it reaches them in what used to be thought of as “after hours.”

4)    Get out of the mindset of “nice” coverage. Tell the reporters to find the “talker” stories in town—development battles, corrupt pols, anything with a consumer bent. Monitor web traffic to find out what people are interested in. If a particular issue jumps, flood the zone. Make each paper the center of every local debate, no matter how trivial, and make finding and creating those debates the operation’s prime job.

5)    Create chain-wide coverage of all areas where it can be done. It’s sad, but it means laying off a lot more film critics and dozens of other duplicated positions. For such positions, do this. Hire two people to cover the beat for the chain. Make them into sparring partners, arguing about each new TV show, movie, CD, traveling Broadway show, concert tour etc. Get out of the business of being promotional. Give your readers sharply argued opinions, something fun to read they can’t get anywhere else.

6)    Create local listings second to none. Create them from the users’ point of view. Don’t use abbreviations. Overwhelm users with insider information that only locals know; where to park, where to sit, when to go, etc. Get rid of all the site navigation levels no one cares about. Put the information people want front and center.

7)    Devote as much manpower as possible to creating must-read local news blogs. Tell the bloggers to work the phones and IMs, finding out about every personnel change, every office move, any tidbit. Support and cite local bloggers in the same areas. Yell at staff members if they are consistently being scooped by (unpaid) competitors.

8)    Create and maintain a wiki designed ultimately to function as an encyclopedia for the town, from neighborhoods and politicians to every retail establishment. Let it become the ultimate guide to the area. Like Wikipedia, it will inevitably contain information that is controversial. Cover the controversies with alacrity.

9)    Serve the community. Don’t publish crap. Tell folks stuff they might not want to hear. Grow a pair.

Bill Wyman is a cultural critic and author of the blog Hitsville. He can be reached at hitsville@gmail.com.

Rupert Murdoch has created a stir with his intent to charge for content. Dave Earley wrote a great piece at Earley Edition explaining how it won’t save news media’s business model.

What is the core business of news media? They are not in the business of “reporting the news”. News media’s business is to aggregate an audience to deliver to advertisers. That is why celebrity tabloids sell – the perceived quality of the “product” only affects the demographics and size of the audience. But in reality the audience is the “product”, journalists and producers are the manufacturing team. The sales team are supposed to be the rain makers. But news media believes their own manufacturing-oriented PR that their business is “the news”.

If news media companies are to thrive under a pay-for-content business model they must now do two new things well for sustainable competitive advantage. Firstly they must deliver compelling content, now mixed with rights management and security that does not interfere with the reader experience. Secondly they must become expert subscription marketers – better than Time Life or Readers Digest. Because the internet is littered with the corpses of companies who believed “if you build it, they will come”. If your business depends on paid subscription you had better become outstanding at the skills to deliver subscriptions. Dave Earley said

It is worrying that users will now be made to pay for news simply because marketing departments are unable to make online advertising work.

Sadly this is typical of sales and marketing reactions in a mature market, it always looks easier to chase the next big thing rather than get great at your core business. If their marketing departments can’t sell online advertising (B2B) how are they going to develop the skill to convince people (B2C) to pay for something they’ve previously got for free? I wouldn’t take that bet.

News media is like the buggy whip manufacturers complaining their markets are shrinking because cars have replaced horse-drawn carriages. Nobody promised newspapers a perpetual license to make money. Evolve or die.  Get good at your real, core business.

Rupert, baby, deliver an audience to your customers.

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