Read and Green

Capsule: News failed to get a big-enough advertising audience to match their lost subscription revenue; but have they finally realized they're not Google?  Audience size for newspapers is limited by distribution.  Audience size for online news is limited by brand identity, brand values and the personality of news content.  So is profit. 

The Daily Show



Two months ago, The Daily Show satirized the newspaper business with explosives and a sharp knife. In a segment called "End Times," Jason Jones interviewed the editors and business staff of one of the most important newspapers in the world. Jones lobbed hard-edged comical criticism at the newspaper's product and business model failures. The jokes exploded like grenades when they hit the wall between the comedian and the newspaper. The earnest, highly admirable editorial team seemed lost behind a force-field of virtuous self-examination without a strong view of the outside world.


The segment ends when Jones asks the elegant accomplished executive editor: "What's black and white and read all over?" You remember the joke; it relies on the listener confusing the word "red" with "read." The movie-star-handsome editor, thinking he can finally get off the defense by playing along, responds, mocking the joke's obviousness: "A newspaper." The Daily Show's retort: "No. Your balance sheets." The camera lingers on the editor and we newspaper groupies share his discomfort.


Newspapers ran into the alluring arms of internet distribution, seeing a chance to measure themselves on popularity--unique and repeat visitors, page views--rather than on the commercial transactions forced by subscription. They ran from their historical and business limitations: expensive and technologically limited printing presses; union contracts built on antiquated economics and social thought; newsprint, its cost, occasional volatility and its resulting waste; and print publishing's archaic distribution mechanisms, trucked to depots and distributed to newsstands and subscribers through expensive, highly operational syndicated delivery.


While liberating the newspaper business from its limitations in the near term, online distribution permanently diminished the newspaper as a product. The most successful publications compete against themselves--their paper products compete for time and attention with online. And, the newspapers have stacked the deck, choosing a favorite son in the race. They've removed all friction from their online editions: they're free (although they may pretend not to be through elaborate "premium value" packaging for customers who take their print products; what better "premium value" could there be once you've thrown "free" on the table?)


Online distribution has also helped the major newspapers become national and international, escaping the local markets that once defined them. The attraction of endless expansion is familiar. This new media colonialism bites even the most virtuous amongst us and may hit the best-intentioned with a hallucinatory whallop. Why shouldn't the best and brightest share their mostly impartial reporting, their new and vigorously re-examined ideas and their important partisan opinion?


Even though free distribution to a universal audience whose internet literacy has exploded over the last decade once promised explosive growth for newspapers online, things change. Sometimes, things fall apart. The most successful newspapers have just hit another wall on growth. By going friction-free--no cost to the digital consumer, few costs to the digital publisher--newspapers have gone native, and are now trying to colonize a wild digital media environment where there are few capital impediments to starting a new competitive "religion" or lemonade stand.


The idea of erecting a fee structure in the middle of this amazon of opportunity seems wrong-headed, but it isn't. Pushed by their financial failures and by the lack of a bail-out opportunity, newspapers are looking for ways to put a few commercial walls around their internet products. Whether it's micro-payments or stand-alone daily or bundled monthly and annual subscriptions, newspapers will charge for their content online because they have to find a floor. This new payment structure will save them, provided they learn how to market themselves in a new commercial world where they're no longer free and competition is huge and includes new distribution as well as alternative content. They're up against the most experienced, successful and largest brands in the world, from Apple to Google to Microsoft/Yahoo to all of the major tv and broadband players to every niche entrepreneurial media venture everywhere in the world.


Raising money for guns and butter, newspapers are coming home to their subscription-based roots. They've learned important lessons, including new adaptive behaviors that make subscriptions easier, more friction-less, more attractive to the consumer. But the allure of friction-less expansion through "free" will have to be put aside, like all distractions, until the newspapers that will survive have a survival basis.


Part of that basis should be investments in sustainability. Can newspapers reinvent themselves as new media enterprises? Can they get clean, converting from using global resources from paper to trucks to returning global resources by focusing on green distribution? A carefully orchestrated plan for going green, beyond just being online, may lead to more revenue and better economics as well as more readers and brand loyalty.


Kindle me this: why aren't more media businesses adding their own dimension to portable screen-reading devices that promise a green relationship with publishing? All of the major publishers publish onto screen-readers, but in doing so, they accept Amazon and Sony and Apple as the landscape designers and themselves as the plants. There is no differentiation amongst brands on these reading devices just as differentiation amongst websites is still sadly limited. There are ways of embracing the incredible access, comfort, speed and green attractiveness that these devices offer without just doing enough to fit into their distribution schema.


Can The New York Times or The Wall Street Journal find a way to drive commerce through these new digital distribution partners? Can they work with digital distributors to enhance their partners' returns as well as their own? They can. A place to start is through an entrepreneurial, product-and-economics-driven alliance with the equally ailing advertising business, starving on a lack of imagination--which is odd given the creative resources at their disposal. Still, it's probably no stranger than newspapers starving on a lack of ideas.


If newspapers invested in their digital brands as products, they could become digital distribution powerhouses. Newspapers' extraordinary brand strength can be leveraged over many revenue-bearing digital products. In order for that to happen, newspapers will need to think of themselves as distribution as well as content. And they will have to love their distribution identities, the way that Amazon and Apple do. This will be tough, given the historic separation between the business (distribution) and editorial (content) sides.


Distributors understand products and technology. They work with technology partners to develop entrepreneurial products that let them escape the ceilings on their revenue and customer growth models. Distributors invest in technology platforms, taking partial ownership in a collective effort to advance digital media. Distributors have product teams devoted to what's new the way newspapers have editorial teams and reporting bureaus bringing back what's new in the world.


Even though they've built their content worlds around the news, newspapers stopped being relevant in their print form when they stopped distributing the news in its best form. Newspapers have a chance to re-engage on digital product and distribution to ensure they don't fall into the same crater now.


The Daily Show's "End Times" segment includes comedian Jones interviewing an assistant editor, stumping him when challenged to find an event that happened "today" on his front page. The editor surrenders, adding that there are a lot of stories on the front page that "didn't happen yesterday." This segment is worth a view on You Tube and a permanent place on the screens of all of us who care deeply about the future of our newspaper brands.