McGuire on Media

Visions of a future for independent newspaper distributors

American Association of Independent Newspaper Dealers Speech, June 23, 2008, Baltimore, Md.

Speaking to you in person is far superior to being the disembodied voice from thousands of miles away. My speech to you last year was a first for me. I had never delivered a 35-minute speech over the phone before.

It was also a big event because for the umpteenth thousandth time my smart-ass sense of humor got me in trouble.

Some of you may remember that I said in that speech that I knew I had to earn my $100,000 fee so I had better get specific. I was certain everybody would get that joke and realize that I was doing the speech for free.

Well, it seems Barnum and Bailey were right. There is a sucker born every minute and pretty soon I was getting messages from friends asking if I REALLY got a 100 grand for delivering that speech. Oh boy! That little story alone might explain why newspapers are in trouble. Too many smart asses like me and too many incredibly gullible newspaper executives!

This year I find myself in another unique situation. I have never given a speech to the same organization two years in a row. To further complicate things I gave a major address to Northwest circulation executives just about 6 weeks ago.

As I sat down to write this speech I worried that I might have said everything I have to say to people who deliver newspapers.

So I made two decisions. First, I decided a little summary was in order to get a good handle on what I’ve been saying to the people who get the newspaper in front of our audiences every day.

Last year I told you that the troubles besetting the newspaper industry are not a cyclical thing that is going to turn around. We are in the middle of a secular change in the newspaper industry because the business model has changed.

I told you there are seven realities:

Reality number 1:  The push-pull reality defines consumers and news providers. All of our future thinking must recognize that choice gives consumers power and control. We are not the alpha dog anymore—the consumer is. 

Reality number 2: News online is here to stay and no, that does not mean print is dead. Smart newspaper executives need to create a future which makes both online and print essential building blocks of a completely integrated information strategy. 

Reality number 3: It’s the advertising business model, stupid. Some newspaper companies are trying to reinvent how they sell advertising, but too many are too wedded to the concept of selling mass eyeballs to customers rather than realizing that we must deliver ready-to-buy customers to advertisers, not eyeballs. We must revamp the business model.

Reality number 4: Audience matters, but audiences matter more. I told you last year this audience discussion has everything to do with distribution.

Reality number 5 is that the key to any new business model for American newspapers is content and we’d better stop killing our golden goose.  

Reality number 6 is that we must worship at the altar of creativity, innovation and risk. Great leadership is required to make that happen.

Last year I told you reality number 7 is that an industry in crises takes a huge psychic human toll on long-time practitioners and you need to either leave or take personal responsibility for your own success.

In my speech to the Northwest International Circulation Executives I continued that theme and told those regional circulation executives that they had to take responsibility for building their own future. I used a metaphor about making their own sandwiches, and I insisted newspaper people have to stop waiting for hope to be conferred on them by anyone with a blog or a podium.

I received some criticism for that speech from people who found my words too frank and too brutal. One web site said that I basically said newspapers were going to fail and that was just too bad.

I don’t think that’s what I said.

I think anybody who read this excerpt will realize I see hope for newspapers. “I think there is a media future for newspaper folk even if it looks a lot different. I think bright, entrepreneurial people are going to create that future. The victims are going to get run over!”

My message is that the newspaper business has obviously changed in fundamental ways. Do I like that? Do I like the fact that rumors of bankruptcy are swirling about the paper I gave 22 years of my life to building? Hell no, I don’t. I hate it. I hate it with every part of my being. I dearly wish the Golden Age of newspapers would magically reappear by a week from Thursday.

However, I am not a whimsical dreamer nor am I one of the whining editors Dean Singleton described a few weeks ago in Business Week. Singleton, the CEO of Media News, said this:

Too many whining editors, reporters and newspaper unions continue to bark at the dark, thinking their barks will make the night go away. They fondly remember the past as if it will suddenly re-appear and the staffing in newsrooms will suddenly begin to grow again.

Singleton continued, “Well, as a former journalist, I also wish for the past, but it’s not coming back. The printed space allocated to news and newsroom staffing levels will continue to decline, so it’s time to get over it and move to a print model that matches the reality of a changing business.”

I think Singleton is correct when he says many metropolitan newspapers won’t make it, but I think he’s missing the whole point when he attacks reporters, editors and unions as whiners. I just don’t see very many people wishing for yesterday.

I do see people frustrated with corporate leadership that has amassed incredible debt and CEOs who want to correct their own failures on the backs of the working folks. Gannett’s recent move to pay pensions in struggling Gannett stock struck me as incredibly cynical.

I think what newspaper people want is aggressive corporate leadership that is driven by an interest in saving the journalistic franchise rather than being focused on greed and self-interested management preservation.

I am not a whiner, and I know the clock is not going to be wound back. I have tried to shout that from the rooftops. Journalism and the newspaper business have changed dramatically, and it is far wiser to look forward rather than back.

Newspaper people should understand that things are going to get worse before they get better, if we measure better and worse by the 1990’s.

I am also a professor guiding young people into the field of journalism. I need to be practical at the same time I am hopeful and optimistic that this next generation of journalistic leaders can build a smart future.

So, that’s the second decision I made about today’s remarks. I have decided that I am going to try to blend that pragmatism with that hope and propose a reasonable view of the future which might help you build your own successful future for your company.

Let’s start with the reality that content is indeed moving to the web. That is undeniable, but it can also be overstated. Not all content is best suited for the web, and a lot of consumers are not ready to consume all their new information on the Internet.

Undeniably, a certain part of our audience is growing more dependent on the choice offered by the web, and eventually all content will move to some sort of electronic distribution. The question is how fast does that move occur? I don’t think the move of all content to the web is going to come as fast as some people think.

A lot of consumers still want mediated news.. A lot of readers covet the prioritization offer
ed by a newspaper. There are still large audiences for things like comics, crosswords, sports, entertainment calendars and local news that are best consumed in a newspaper.

I know this argument that newspapers will have an important role for a fairly long period of time does not fit with the gloom and doom immediacy promised by the Silicon Valley gurus. Just two weeks ago Steven Ballmer, CEO of Microsoft, said: Here are the premises I have. Number one, there will be no media consumption left in 10 years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form.”

Yikes. Ballmer is pretty darn sure of himself for somebody who can’t make Vista work. That Vista remark is not intended as a mere cheap shot, but rather as the first of three reasons I think Ballmer and others are premature in their prediction of revolution.

The technical gurus often vastly overestimate the computer savvy and comfort levels of consumers. I won’t embarrass anybody, but ask yourself how well you did with your new Blackberry without technical assistance. Just because we have great technical capability does not mean consumers enjoy wrestling with technology. If Ballmer’s prediction is going to come true, technology has to become far more user-friendly, fast. Vista has to work!

The second reason I think it is premature to write off newspaper delivery is there’s no business model for online delivery of news. The business model for newspapers is battered and tattered, but there is still a model. The business models that are working online do not currently support news. Before Ballmer’s prediction comes true, content suppliers have to become more confident they can make a buck by the exclusive electronic distribution of their material. I think that day is still a long way off.

Finally, newspapers still have strength. Stop laughing! They do have some strength! Don’t get me wrong here I am not going to argue that the future is rosy. I buy into an April 28 Advertising Age piece that gives newspapers 20-25 years.

I think newspaper readership, while declining, is staying ahead of advertising declines. As I have said many times this is a business model problem more than it is a readership problem.

I am convinced newspaper companies need to protect their newspaper franchises while they become digital entrepreneurs. I think there is money to be made in the next twenty years, but more importantly, I believe time is essential if our society is going to figure out how we are going to deal with the blow to democracy the loss of newspaper journalism would inflict.

The journalism that shores up democracy is currently driven by newspapers. Nobody else, not citizen journalists, not bloggers, not television and not Google, Yahoo or Microsoft seems capable of protecting our society from governmental excess like newspapers do.

So what I’d like to do is present a reasonable future for newspapers 10 years from now.

We start with a print product that is symbiotic with the electronic product, but not the same. It is time to legitimately and fundamentally separate the print product mission from the electronic mission in ways that are more fundamental than putting hard news on the web and taking a softer feature and analytical approach in print.

The key differentiation point has to be demographic. In my humble opinion, it is certifiably nuts to continue to try to make the print product work for all readers. We have spent too much time and effort in the last 10 years chasing non-readers. The net result of all that chasing has been to chase away core readers.

Yes, I know those readers are going to die off eventually and there will come a time when all readers are best served online. That is a given. The question becomes how do you best profit from current readers and how do you cement newspaper quality journalism in our culture.

Do you a) continue to cut the quality of your print product to the point that loyal print readers are angry, anguished and apathetic? Or, b) do you entice young readers with your online efforts and make that print product work really well for the baby boomer reader with lots of cash and target the paper to their needs. I think B is a no-brainer.

Okay, so here is your scenario. You have an electronic product that serves younger readers and readers who prefer to get their news electronically. You build and develop this franchise with the intent that it carries you far into the future.

That approach demands far more than content. It demands a fundamental rethinking of the business model. It requires a connection with audiences that advertisers will covet because advertisers will be confident the publisher knows what messages the readers wants when. The intention to buy is what advertisers covet these days and publishers have to figure out ways to compete in that arena with Google, Microsoft and Yahoo.

Let’s talk about the print product in our brave new future. Just because we’re talking print does not mean we don’t have to basically rethink what we’re doing. When we talk about the newspaper we should not start with what we have now. We have to reinvent print just as much as we have to reinvent electronic delivery of news. Innovation is essential.

The other building block we have to keep in mind is the admonition of Tom Friedman in his book, The World is Flat. Friedman says the secret to success for any American company is to: ADD value and CAPTURE value. Everything we do with our print and electronic products has to ADD value for citizen readers.

So in our reinvention it makes sense to make the Sunday newspaper our spine. The Sunday newspaper isn’t as strong as it once was, but in a long tail world of micro markets it remains a powerful mass vehicle. It is unwise to think mass is simply going to go away. Mass distribution of messages and products will have its place for a long time. The Sunday newspaper remains a powerful vehicle for delivering inserts which require mass distribution.

That Sunday newspaper and that mass distribution element are so important I think we should seriously consider LOWERING the price. Let’s make it a buck. That’s not an effort to chase new readers; it should be an effort to make the Sunday newspaper available to everyone who still wants to make a newspaper a part of their life.

The content of that Sunday newspaper should be premised on the assumption this is THE mass product of the week. It should be a powerful week in review and week-ahead product designed to create knowledge, guide readers to the vast information resources of the web and to entertain.

It is essential that the newspaper of the future be a convener of people online and in print. This Sunday product should be the center of that convener activity. Newspapers must convene all sorts of audiences in all sorts of imaginative ways. In a fractured media world it is incumbent on the democratic responsibilities of newspapers that newspapers lead, guide and direct everything from democracy to knitting clubs.

One of the greatest threats to democracy is that our long-tailed world might destroy all sense of community. It should be newspapers that save us from that fracture and that Sunday newspaper can be the mass product that serves as a community rallying point.

From that point what we know as newspapers need to be discarded. I know this is hard to hear, but daily distribution of a one size fits all newspaper is not necessary and it is not the smart business decision.

Publishers need to be willing to print sheets of varying sizes and shapes on different days of the week. Maybe Monday is a 16-page summary of weekend news and sports. Maybe Tuesday is even smaller and sports coverage does not have to be a part of that package. Those choices should be made according to news demand
AND advertiser demands. Customized special products delivered to different subscribers also have to be a part of this imaginative print approach.

Many newspapers are doing important work in the specialty targeted magazine area, but rather than relying on the mails, distributors are going to be asked to deliver more than one main sheet everyday. I think the smart companies are going to ask you to deliver a main sheet of varying sizes, and lots of auxiliary products aimed at specialized audiences.  The business models of each product and each day might be dramatically different, from mass, to target, to circulation-based, to advertising based, to sponsorships. No business model can be considered off limits.

I understand this is only my way of looking at the future, but I designed this future for two reasons: 1) Because so many people tell me it would be easier to debate where we are heading if there were some specific ideas about what the future might look like, 2) I designed it so you can stare down the barrel of a future that will require far more flexibility, far more agility and far more creativity than has ever been demanded of circulators in the newspaper industry.

What I have just described represents a new delivery and sales reality for people in this room. Consistency of process has been crucial to your success. Yet, what I am describing will make every day’s delivery hugely different from the other. Each day’s product might be priced differently too. And, even more frightening, mix and match options might have to be offered to consumers.

Let me play the role of the candid editor talking to circulators for just a minute. For the last 100 years, the newsroom, the advertising department and the production department constructed their products and their systems around your delivery of the product. I am not saying there wasn’t give and take, but your delivery needs were sacred.

One of the most important roles circulators can play in the reinvention of newspapering is to become a part of the front-end solution rather than the back-end. Circulators must facilitate the reinvention of newspapers by delivering multiple products; different products on different days; and delivering to customers when customers want the products, not when we want to deliver them.

As I said in the speech to Northwest International Circulation Executives your competition and your yardstick should be FedEx and UPS. Customer focused, can-do and innovative should guide your efforts into the future.

Dean Singleton is absolutely correct when he says yesterday is not going to return. We live in a different world and no amount of huffing and puffing is going to bring back the newspaper past that you have romanticized and celebrated.

That means every one of you must stare down the choice I talked about last year.

I told you that if you can’t be a source of positive energy in your media workplace get out. I said there is no shame in ceding the future to the young and engaged.  But, if you stay you must commit to being part of the solution and not a part of the problem.

That admonition is even truer today. The pace is fast. The challenges are staggering. It would be very easy, as some employees and unions are doing, to just say no. That is not going to fix anything.

If you are genuinely ready for the future, you cannot become one of the whiners Dean Singleton complains about. You must become an innovative doer ready to forget about the past and ready to build a new way for publishers to meet the needs of reader and advertiser customers.

And, no matter what corporate leaders say, this is not a one-way street where you can afford to wait for them to move. Lemmings are not going to save newspapers. Corporate leaders are going to have to listen to the ideas of people like you who can effect genuine change.

Newspapers can enjoy a longer, more profitable life in our society only if corporate publishers and CEO’s stop the name calling and seek partnerships with the people on the front line who can help create an exciting future.

At the same time people like you need to look forward, not backward, and truly reinvent yourselves and what you do.

Democracy needs us to make the right choice.

One Comment