Loughborough still stinks

When I was a student at Loughborough, some local cars carried bumper stickers which said "Loughborough stinks". I quizzed my landlady, the redoubtable but sweet-tempered Mrs Childs, who explained that those unfortunates (many of them fellow students) living at the "wrong" side of town experienced, when the wind was from a certain direction, a dreadful pong. It was well known that the council had sited the municipal sewage works in the wrong place and moves were afoot to re-site it and solve the problem. Sure enough, later that year the works were re-sited.

During the following autumn term however, it wasn’t long before new bumper stickers emerged, this time saying "Loughborough still stinks". The council were learning that not only was it more difficult than they imagined to solve the problem of things being in the wrong place, but also that a youthful vocal population were only too ready to remain sceptical that the poor old councillors could do much about it.

I was reminded of this much later, in the early 1990s, when Jon Katz wrote a piece for Wired magazine which carried the headline "Online or Not, Newspapers Suck". (1) This was triggered by what were seen by some commentators as a somewhat arbitrary and half-hearted response to the rise of the consumer web by newspaper managements the world over. We were still in the early days of digital consumer publishing however, when news and media management everywhere was still bewildered by (or more likely, oblivious to) this new phenomenon called the web. The subsequent dotcom crash served only to reinforce their prejudice that it had all been a storm in a teacup, and like other pretenders to the throne of consumer news publishing, this one had not seriously dented newspaper margins.

However, if a week’s a long time in politics, as Harold Wilson once claimed, it’s an eternity in internet publishing, and in the opening years of the 21st century, it seems like there have already been several generations of new pretenders to the throne, from social networks, to blogging networks, to Twitter. Is our industry keeping pace with these changes?

The door marked exit is always illuminated

There’s certainly been a good deal of investment by newspaper publishers in the last two or three years. They have largely embraced the idea that ink on paper, though still contributing the lion’s share of their profitability, has at best an uncertain future. Let’s not reheat here though the myriad arguments for and against the future of the newspaper or whether Philip Meyer is right when he predicts that the death of the printed newspaper will take place in April 2043. Nor shall we examine the arguments about new kinds of journalism and their validity, which seem to occupy the columns of so many seasoned bloggers on this topic, and miss the real point of what is going on.

No, the real discussion is about structure, and whether newspaper companies have anything like the right people and structures in place to make the most of these new markets. The facts of change are becoming accepted across the spectrum of views on newspaper futures. Take these three recent viewpoints from some of our most senior industry figures for example:

Dean Singleton, CEO of MediaNews Group:
"He is under no misapprehension as to the problems facing the US industry - according to his calculations, 19 top newspapers in America are losing money. He rails against unions, journalists and other vested interests against change. "They fondly remember the past as if it will suddenly reappear." But he is adamant that there is no going back. "It's time to get over it and move to a print model that matches the times." (2)

Gavin O’Reilly, COO of Independent News & Media plc:
"All of us in the industry know the big strategic issues and challenges at play in the fast evolving digital world - and, the really successful publishers are those who recognise and capitalise on the newspaper’s relative position in the busy media matrix. Happily, that is the majority of publishers today." (3)

Rupert Murdoch, chairman and chief executive of News Corporation:
"I don't care if it's printed on the web, on mobile or whatever. Look at the last six months - the average newspaper is down 10 to 30% in advertising revenue and those are problem margins. They have made every economy possible in production but not in journalism," he added. "Now they have to turn to journalism and they are going to deteriorate tremendously." (4)

If some are more upbeat than others on the future of print newspapers, then that doesn’t negate the fact that all accept that massive and rapid changes are assaulting the industry: an industry that Mr Murdoch now predicts will have to become comfortable with 10% margins rather than 30% ones. If Mr Murdoch’s view that the next cuts will come from journalism is correct, then who knows what impact this will have on allowing newspapers to "capitalise on the newspaper’s relative position in the busy media matrix" as Gavin O’Reilly wants them to.

And herein lays the problem. Perhaps newspaper chiefs are still looking in the wrong place for solutions. Newspaper managements, in response to difficult print advertisement conditions and with a perceived need to invest relatively heavily in new media, have already been cutting back on production and distribution values, possibly in panic or more charitably in an effort to reach "a print model that matches the times" as Dean Singleton puts it. Have we?

Is the medium really the medium?

Have we found, for example, what the much criticised (though in my opinion, far sighted) Jon Katz predicted we would need way back in 1994: "We need something very close to what a good newspaper is but with a different ideology and ethic: a medium that gives its consumers nearly as much power as its reporters and editors have. A medium that isn't afraid of unfettered discussions, intense passions, and unashamed opinion. A medium that recognises we've already heard the headlines a dozen times." (5)

Well, maybe. Partially. But one has to confess, somewhat half-heartedly. In a world where Microsoft, Yahoo and Google are currently slugging it out for domination of what are now held to be the immense riches of online advertising, half-hearted doesn’t quite cut it. One is reminded of the rich, evocative, predictive phrase in the EPIC 2015 flash video from Robin Sloan and Matt Thompson: "The news wars of 2010 are notable for the fact that no actual news organisations take part." (6) The fact is that most traditional media companies are only managing to replace a fraction of their former 30% marginal profits with ones derived from digital publishing. Why is this? Over the past several years, the industry has begun to use digital channels and websites in particular, in ways that go beyond mere repurposing and take on at least some of the challenges that Katz posed over a decade ago. Why then do many outside the newspaper industry still predict its eventual demise, and many inside the industry act as though they expect it happen (but hopefully not before they retire)?

It’s the people stupid

The industry has:
* restructured, to some extent;
* downsized, with increasing rapidity;
* integrated newsrooms, with only partial success;
* welcomed citizen journalism and video on its web pages, reluctantly;
* examined in minute detail, and to my utter boredom, the role of the journalist;
* and finally, it’s collectively agonising over how to ramp up returns from online advertising which has, frankly, appalling margins, and how to close the gap which has opened up between the giants of web advertising and the minnows.

At the same time, during the last ten years, a whole generation has come to the market with increasingly sophisticated views of a digital world they have literally grown up with. No converts they to the messianic cause of participative journalism: they don’t even think of journalism in the same way we do: they communicate. Most importantly, they communicate cheaply.

We need now, and urgently, to recognise that no number of cuts, whether they are from production, marketing or journalism, will solve this problem. Indeed they will worsen it. We need to acknowledge that it’s the people you reach and the people who reach them who form the bulk of the equation. Distribution is king, not content. There’s nothing new about this. The Harmsworth brothers, and then the Berry brothers, had to similarly design and deliver new kinds of communication and delivery platforms for the newly literate public at the start of the 20th century. Now we need to do the same for a new kind of public, the digitally literate.

Look at any national newspaper and examine the infrastructure, which is wholly weighted in favour of print. At least a couple of hundred journalists, a similar number of commercial staff selling "space", and a whole army of marketing people developing ever more sophisticated ways to give away films and music. How many search engine and database specialists, who understand the power of search engine marketing and search engine optimisation? I’ll tell you: a handful, across the whole industry, and probably all 20-somethings with no voice and no influence.

So far, only a tiny sprinkling of US local newspapers have abandoned paid circulation printing and gone for a web-centric approach, probably reluctantly. How long before a large national UK title is brave enough to go free and divert most of its resources to the Web? How long before one recognises the implication that news is no longer news and settles for a weekly print vehicle and a truly dynamic website? How long before the horny-handed production staff with their presses and lorries are jettisoned in favour of wireless platform distribution of news to portable devices (you can make it look like a newspaper if you must – just give all your customers a subsidised Kindle or Iliad). If you want better margins from digital, start thinking in new ways about what you spend your distribution costs on. Don’t downsize, re-engineer. Throw away the manual on how to increase circulation (it’s a remarkably slim one anyway) and the people with it. Take your huge TV and press promotional budget and wholly devote it to viral and search engine marketing.

Move those distribution and promotional costs that hang round your corporate neck to the web and reach the right people, with the right people and the right tools. Our collective failure to meet these challenges is squandering the rich inheritance of the newspapers we have loved for so long. Give them new life, though not necessarily as newspapers. And get rid of that awful smell.