I canceled my subscription to the San Francisco Chronicle recently. Apparently, I was not the only one since that paper is bleeding subscribers at such a fast rate that Hearst threatens to turn it into an online only service. Then the Rocky Mountain News was shut down after more than 150 years. The same thing is happening with newspapers across the country. There is even a deathwatch of sorts on line by the blog 24/7 WallSt.com of the ten major daily papers that are most likely to fold or shut their print operations and only publish online. See: http://247wallst.com/2009/03/09/the-ten-major-newspapers-that-will-fold-or-go-digital-next/ .
I have nothing against newspapers. I subscribed to four of them: Wall Street Journal, Financial Times, my local paper the Contra Costa Times, and San Francisco Chronicle. Why did I cancel? It was not because the Chronicle blatantly panders to the liberal San Francisco political scene. OK (I rationalized) you may not agree with this spin on things but you need to understand where the Nancy Pelosi crowd gets these ideas. I canceled for a simple reason unrelated to politics. After paying $19.95 for several years for a Thursday thru Sunday subscription on automatic renewal, I discovered a $76.95 credit card charge for the last renewal. “What happened,” I asked the Chronicle circulation staff answering the phone. “Oh, we added a fuel surcharge for the extra costs of delivering the paper,” she answered without snickering. Thanks, but no thanks!
Who needs the newspaper for classifieds? Newspapers or “the old media” have been in decline for sometime. The reasons are varied but the current recession is rapidly accelerating the process as advertising dollars are dropping as fast as the stock market. There are other factors at work online that undermine the traditional newspaper business model. Craigslist is the de facto classified ads site for all things from getting a job, selling your car or even hooking up on your next out of town trip. (No, I have never done that but the ads are fun to read.)
Who needs the newspaper for local news? As costs had to be cut, newspapers responded by cutting staff and dumb down the news content. My local paper tells me almost nothing about my home town, its politics or gossip. I get that from a handful of local blogs published at blinding speed whenever something happens and sent, thanks to RSS, to our Blackberry or iPhone.
Who needs the newspaper for news? Then there is the headline news above the fold that traditionally “sold” the paper on major news days. Today we get that news on Yahoo or we can Google an issue and get flooded with information choices.
See what I mean? Many of the traditional reasons for newspapers have disappeared as unintended consequences of our internet age. Unfortunately the “old media” is stuck with massive fixed costs and overhead from presses, labor costs from a unionized work force, higher delivery costs, and declining advertising revenue.
As we witness the decline of the traditional mass media, we are beginning to see the rise of an entirely new and exciting range of media products at the early stage of their product lifecycle. The newspaper companies have tried to delay the inevitable by using technology and joint printing agency agreements to manage costs. This is like painting the boat as it is sinking.
Mass Customized Personal Media. New business models are being tested but at the core of this transformation is something more fundamental. We are moving rapidly from an era of mass media to an era of mass customized personal media.
We are moving from an advertising-based business model built on capturing the most eyeballs to one based upon niche aggregator business models that segment and target niche communities and putting the right advertising in front of the right customers at the right time while engaging them in the creation of the content they consume.
We are moving from static news stories pumped out by wire services to YouTube video coverage of breaking events that range from a highway chase in LA to the cell phone coverage of the hanging of Saddam Hussein.
It’s not just newspapers suffering this democratization of the news. Major TV networks are being savaged by the narrowcasting of cable channels. MTV, once a phenomenon for its music videos now rarely runs them. Netflix cleaned Blockbusters clock by making access to newly released movies and a library of oldie-moldies more accessible. iTunes and before it Napster have nearly bankrupted traditional “music stores”. What Barnes & Noble and Borders did to mom & pop book stores is now being done to them by Amazon and Kindle. Video on demand through the internet offers the entire supply chain of content without the need for any traditional retail merchants.
What characterizes all of this business model transformation is the use of technology to transform the mass access to data and content into our search for community, context, and connection. Facebook and MySpace feed the craving for community and belonging. Linked-in allows us to do more business networking in a single day than attending a full year’s worth of traditional conference and conventions—with much less cost and hassle.
If you want to see an example of this new niche aggregation business model at work take a look at tweenTribune at http://tweentribune.com/, a daily news site for tweens. Each day it aggregates to the day’s most compelling news from a tweens perspective using groups of tweens working with professional journalists or teachers. Tweens can submit links to stories they’d like to share, submit their own stories and photos, and comment on the stories they read. Adult moderators keep it legal and appropriate. Every parent will tell you about the aggregated buying power persistence of tweens so if you supply their product needs this is a great way to reach them directly with a concentration to die for.
Newspapers are not the first victims of technological obsolescence, just the latest. Nor will they be the last. But they still have much to offer in value for this transition to new business models.
Will we pay for content? Yes if it is compelling, timely and infinitely mass customizable to meet our personal media appetites for involvement and instant gratification—and if it does not cost too much.
Is the advertising business model dead? No but we barely recognize its transformation into the niche aggregator, community-focused, content-rich, viral, on demand appeal it has on us until we hit SUBMIT and our credit card is charged and our purchase is validated with our online user name and password in hand.
Like those tweens in search of the latest style in jeans or music, we are all content ‘gottahavit’s’ at heart. The new personal media business models will seduce us instead of overwhelm us. Its not eyeballs they are after but hearts and minds and our insatiable desire to ‘be part of it’.