Looking outside the new core

The responses to my post last month, "Please stop calling print the 'core product' (explained)," continue to pop up here and there on the net, and a common theme is "but I'm not sure I agree or want to accept what he says is the core - helping others sell their goods and services."

I can't say I'm surprised; as I've often noted, journalists don't often think about the business that supports journalism and generally don't want to. But business is about money. And in the media business, helping others sell their goods and services is where the money comes from.

The people who spend their days thinking about the business are all on the sales side. They're busy selling what we make (desperately trying to make this month's sales goals), not noodling on what we might make.

Combine that with a recession that (temporarily) kicks the legs out from under the advertising model, and we get to our current state of general bewilderment about "the business model that will support serious journalism in the 21st century."

In 2005, the American Press Institute invested $2 million to undertake a deep rethink of the business layer. They brought in a team from the Harvard Business School and the innovation strategy firm Innosight. I was on the task force for that project, called NewspaperNext.

Some good things happened as a result of NewspaperNext. The report that emerged from that project changed the way many people think about the challenges facing the newspaper industry, and it led to a number of innovative projects, generally focused on niche markets.

But there was one angle that seems to have slipped out of the discussion that I think is extremely important.

In identifying the core business of the local newspaper as a marketing service implemented through the advertising model, Innosight told us to start thinking of a "new core" and implored us to realize that our Web efforts are part of that core.

OK, some of us get that now. But it's the next step that we're uniformly failing to take: Look outside the new core. Find poorly met needs in your community where you might create new kinds of products or services that might follow a completely different business model.

Who's doing that? Who's (a) looking outside the core, talking with people (business and consumer) in the community, finding poorly met needs, and (b) trying to build something that's outside the circle, outside the comfort zone of media product supported by advertising revenue?

Much of the rest of Innosight's advice seems to have been internalized by a lot of people at newspapers. I hear a lot of comfortable talk about "fail fast, fail cheap," the iterative strategy-development process that recognizes that "90 percent of new ventures start off following the wrong strategy." I even hear talk of "good enough," a concept that's a bitter pill to swallow in newsrooms, which prefer to puff up the mission with lofty language about excellence.

But there seems to be a wall around the core -- new or old. And there's very little action outside that wall. You have to wonder what opportunities are going unclaimed.

Update: The original version of this post credited the Knight Foundation, but the $2 million (eventually $3.2 million) was raised by API from a broad collection of donors that support the institute. Thanks to Mark Mulholland for the catch.


Good points, well made, Steve. Can I try to illustrate what you are saying? (Note: I highly recommend NewspaperNext.) Sure, business is all about selling goods and services. But, that's a process and advertising is just one part of it. And, typically, it's not key. But, as we all well know, ads can be powerfully helpful. The job of advertising is not selling, but creating awareness. That is one of the first steps to selling. Even the inserts in today's Sunday paper are first and foremost about awareness. (I worked at a huge regional farm co-op that was also a lawn and garden biz for 25 years. The firm avoided doing the newspaper inserts for years and years, but finally hired a guy to knew their power. Worked great. They sold what was listed, but they sold a lot more, too. These ads create awareness that "this is the type of stuff we got." That's what ALL advertising does, and that's about it. But you are not going to do business with a firm you can't see--awareness isn't selling, but it's vital.) Can local newspapers help local businesses make local customers more aware of their business? I like to use local banks as an example. All banks are pretty much the same. (This is why they have ALL of those branches. Convenience helps--a lot. So, newspapers should get into the real estate business. Ok, no,... that's wrong...) What can a local newspaper offer a local bank (or other firm) to help them differentiate themselves among local customers? Newspapers can, and have for years, offered businesses such as banks the newspaper's BRAND. Once upon a time, if your firm's ad was in the newspaper, it gave your firm status. And, that's still true today--but not as much. (People don't get excited much about being on TV, either.) But, that's was and remains a big part of the value newspapers offer to businesses seeking awareness--status. Those newspaper who are working on devising new channels are wise. But, in days past, it might have been wise to try to create new brands with these new channels. Not now. There are too, too many brands today. Newspapers can't afford the cash and time it takes to create a new brand. The good news--the vast majority of local newspapers own the most powerful brand in the community--the newspaper's brand. Therefore (I'm finally getting to the point), do offer new, targeted, services and channels on the web and in print. But, as you seek sponsors, make it clear there will be high awareness of this channel--and their sponsorship--because it's linked to the most powerful brand in the community--the newspaper. And, in each of these new targeted services and channels, enhance them with journalism if possible. Use breaking news if you can (often easy with the web). That adds value to the sponsors' brand. This sound obvious? I'm seeing examples all over the US where publishers' new channels or products are not being linked to the local newspaper's brand. And I'm seeing businesses start up publications and web site with news and information, but not working with their local newspapers. In the new web service I'm marketing to local publishers (WuduPlz.com), we exploit the newspaper's brand, the paper's print reach and their ability to offer current news. And all WuduPlz does is offer is a clever way for parents to easier manage their children via texting. Ads create awareness among parents--but it's much more powerful because the sponsor is teaming with the newspaper. (Yahoo knows this, as does Zillow.) Figure out a way to help marketers raise their awareness in your community using the newspaper's brand and journalism. And price it smart--because the value of the newspaper's brand and news is high in your community. Everyone is aware of it. And awareness is what businesses want and need.

Charles -- I don't think you understand the realities facing either journalism or the newspaper industry. One of the biggest problems is that the brand of any given paper is basically in the toilet (with a handful of exceptions) as well as is the profession of journalism. Surveys pretty consistently show that the public considers reporters to be about as trustworthy as used car salesmen and televangelists. New news/info sites are not partnering with the local paper for a reason. Personally, I think local papers should look into becoming databanks of information for their local communities. Amass all the records digitally of the local historical societies, all the financial statements issued by local governments, studies and surveys conducted by local colleges & universities, police reports, etc. Every kind of public information they can get their hands on. Then, spend the money on search engine optimization expertise so that whenever anyone searches for anything to do with local anything, the newspaper domain dominates the search engine results pages. Advertising has historically been worth buying because local newspapers maintained a monopoly on local information & content delivery. If journalism is going to continue to be underwritten by advertising, this monopoly has to be translated to the web. Additionally, any massive accumulation of data has value in its own right. I would provide the asset against which papers could take out loans, or issue some type of bond to the community to raise funds. There's tons of ways of newspapers to make money, but the hierarchy within journalism cannot see the forest for the trees. I suspect what will happen is that newspapers, and journalism generally, will tank for a while until people who understand the digital ecosystem resurrect it in a new form.

Paula, I disagree that local newspaper's brand is "in the toilet." Murphy's Law of Journalism remains in play: Everything I read in the newspaper is absolutely true, except those things I have first-hand information on. Survey after survey shows that the public doesn't trust Congress, but people say their Congressman or Senator is OK and typically re-elect them. Seriously, a brand's power come from trust. Trust comes from competence, integrity and caring. Local newspaper's trust have been honestly earned. Their brand shouldn't be discounted. Overall, no brand has the power they once did. Even Nike, Coke and McDonalds. You said, "Advertising has historically been worth buying because local newspapers maintained a monopoly on local information & content delivery." Ok. But, then you said, "If journalism is going to continue to be underwritten by advertising, this monopoly has to be translated to the web." Good luck with that. Sure, newspapers don't own the only printing press anymore. The bar to entry is really low now. My way of responding to this, albeit not perfect, is to use the power of the brand and create a portfolio of products branded by the name of the newspaper. The newspaper brand might be in the toilet, as you say. I don't think so. But, even if true, take that brand out of the toilet and shiny it up and sell it. I worked in agriculture for years--that stuff in the toilet has value and can grow crops that make money. You just have to package and get it to the people who need fertilizer.

"There's tons of ways of newspapers to make money, but the hierarchy within journalism cannot see the forest for the trees. I suspect what will happen is that newspapers, and journalism generally, will tank for a while until people who understand the digital ecosystem resurrect it in a new form." You're right on that one, I'm looking into this matter right now. Pretty interesting to be honest.