On newspapers and Big-J Journalism

I’m an ambitious guy, and I’ve set a goal of finishing my MBA (which definitely will happen), and passing all four parts of the CPA exam (which is a significant challenge), by the end of 2012.  As a corporate accountant, when you get much more senior than I am now (my job title is Division Controller), you have to be one, or preferably both.  When I was an audit intern, while still in college, the client I was working with lost its Corporate Controller unexpectedly, and they wanted to promote a guy from within, but he wasn’t a CPA.  They made his promotion contingent on passing the entire CPA exam within two months, and that’s a really difficult thing to do.  I don’t ever want to be in that position, so I’m doing the damn thing now.

Last Tuesday, I went to take my first section of the test (I think I did well), and I was a little early for my appointment.  (Navy influence – I eat way too fast, and I always show up early to everything.)  Next door to the test center, there is a store, so I decided to just walk through and kill 10 minutes.  In the vestibule, there was a guy handing out free copies of the Plain Dealer, which is Cleveland’s major daily newspaper, and basically trying to get people to subscribe.

He asked if I had gotten “my” free copy of the Plain Dealer, and I said no, I don’t read the newspaper, and haven’t in years.  He started lecturing me about all that I was missing, and proceeded to get me into a discussion of where I get my news from.

I consume plenty of news content from many sources. But I don’t read any of it on paper, and I don’t pay a subscription fee for any of it.  I don’t clip coupons, and I couldn’t care less about local news.  I don’t watch the local TV news either, and if something’s really important, I’m sure I’ll hear about it another way.

Humans have a strong tendency toward thinking that their own experience is typical, when it most often isn’t. But in this case, I think my consumer behavior toward news is fairly typical for people my age and younger, and that more people are joining me all the time in giving up on newspapers.  I am an iPad user, personally, but you can now buy a Kindle Fire for $199 on which you can read almost anything.  We’re getting to the point where tablets are affordable for most people, so why would anybody need the content to be on paper?

I am writing this on Monday afternoon, Memorial Day, after reading Peter King’s MMQB article, which appeared online, like it always does.  I used to like to beat up on Ol’ Pete from time to time, but I normally leave it to the guys at Kissing Suzy Kolber now, because they’re really serious about it, and they do a great job. 

Today, though, I have to get after Peter, because his whining about the scaling back of the New Orleans Times-Picayune is just too much.  The only notable thing to me about that paper is its name – did you know that “picayune” means petty, trivial, or of little consequence?  I won a city-wide spelling bee on that word in eighth grade, so it’s always been a favorite of mine, and I’ve always thought it was funny that a newspaper had it as a name.  I think it speaks to the character of the city, where nothing is really THAT serious.

Anyway, here are Peter’s words:

The paper will cut about 50 jobs from the 150-member staff and begin devoting most of its energy to the online product. This cannot be good for journalism, no matter which way the parent company, Advance Publications, spins it.

On Friday, one of the best NFL reporters in our business, the T-P's Jeff Duncan, was mulling his future. He'll find out soon if he still has a job, or if he'll have to re-interview for it, just like the rest of the 150 journalists on staff. He hopes the paper's love for sports gives him a path to stay.

I’m a center-left Democrat, and a businessman, and as such, I have a somewhat conflicted relationship with capitalism.  In general, I think it’s a good thing, but I think it needs to be regulated to some degree, lest the greediest and most ruthless capitalists crash the whole system, and ruin it for everybody, like Karl Marx predicted.  That came pretty close to happening a few years ago, and I think that some significant lessons that should have been learned haven’t been.

I’d like to believe what they teach in business school, which is that the market is self-regulating, and that if sufficient demand exists for a product or service, somebody will provide it, and the price will be set at the intersection of supply and demand.  For the most part, but not in all cases, I think this is true. 

Demand for holistic, single-source content on physical paper is falling rapidly, and this is inarguable.  If supply is to remain constant, which Peter King seems to unconsciously favor, then prices must fall.  Since newspapers have a massive fixed-cost component to their operations, they can’t lower prices very easily, and that means that they’re overpriced, and that the market will buy less of their product than it would if it were appropriately priced.

When you’re in a situation like this, you can do a few things.  You can devote scarce resources to convincing consumers that they’re wrong, and that they should be buying your overpriced product.  That’s what leads you to put a roper in the vestibule of a store, and offer special introductory pricing and a $50 gift card to the store for subscribing to the Plain Dealer.  This is like being General Motors, circa 1980 to 2007 – we need to educate the customer on what they want, because without our guidance, how could they figure it out for themselves?

The other, better option, is to do an honest assessment of reality and go from there.  Now, the majority of businesspeople aren’t very good at recognizing or accepting reality; they instead tend to arrogantly think that they can create their own reality. But you can find ones who do possess that ability.  This is the humble approach, and it’s the one that will win in the end.  Then, you’re Ford in the mid-2000s, and you’re learning from your customers that they want things like fuel economy and entertainment features, like the completely awesome SYNC system.  You’re giving the customer what they want, not telling them what to want, and you’re resultantly not taking a bailout in 2008.

Here are the questions that I’d ask:

  1. What does the company do well?
  2. Does anybody want that product?
  3. What are they willing to pay for it?
  4. Can we win in the competitive marketplace?

All newspapers that I’m aware of are good at some things, and lousy at others.  If we’re talking about Denver Broncos football, I’d say the Denver Post is good at original reporting (Lindsay Jones, and to a lesser extent, Mike Klis), lousy at analysis (Jeff Legwold), and their columnists (Woody Paige and Mark Kiszla) are pretty worthless.

The only part of that operation that I consider to be journalism is the original reporting, and frankly, I think Peter’s premise that Big-J Journalism will suffer with a move to a more online focus is completely silly.  Now, if no entity can pay a reporter to be at Dove Valley everyday, then Journalism suffers.  Smartly run online publications can pay reporters, though, and this is demonstrable.  Look at Gawker and its family of sites, including Deadspin.

Journalism is very important and has been facing a major threat, but it’s not the creeping death of newspapers.  Media imperialism and the consolidation of the ownership of all media entities among a few corporations is a much graver threat, and I don’t see Peter mentioning that, probably since he works for a couple of those giant corporations.

Can you wrap a fish in your news when you’re done with it?  Who the hell cares?  Actually, as somebody who’d like to see our society minimize the destruction we cause to the environment, I wish we’d quit printing newspapers on physical paper immediately, along with a lot of other stuff, like junk mail. 

If you pay for the newspaper, ask yourself why for a moment.  It shouldn’t be the content, because you can get the same articles for free online.  It seems to me that it’s because something physically gets put on your doorstep, and you figure, well, the delivery guy needs to get paid, and the paper and ink cost money, so you pay the subscription fee.  What if it just appeared on your iPad or Kindle, though?

Local written news needs to accept a new revenue model that is less dependent on subscription fees, and more dependent on advertising.  Then it needs to quit being afraid of fully joining the online world, and get focused on it.

I believe that newspapers are scared of competing with operations like this site, and that that fear is driven by people like Woody Paige.  If his opinion can only be read online, just like mine, what makes us different?  Why would anybody pay him what he makes to write content that can’t stand up to what a strong independent writer produces?  Yeah, he has sources that I don’t have, and he writes a few good articles per year on the strength of them, but he doesn’t really know anything non-obvious about football, and this site is going to consistently crush him on that stuff.

Why should there be a Woody Paige, or a local politics columnist, or an editorial board that thinks it needs to tell the locals how to think?  Those aren’t journalistic functions; they’re really entertainment functions, so I don’t weep for the impending loss of them.  Quit crying, and holding it up as being part of the The Big J, and come compete with us.  If the market wants that stuff, somebody will win the fight to provide it, within the natural supply and demand environment.  The only person who really cares whether that winner is Woody, is Woody.

Personally, I believe there should be a national endowment for Journalism, so that real Journalism can be funded by grants from private sources outside of the few corporations that own everything, whether it makes profits or not.  There’s a certain idealistic, economically productive type of person in this country who would donate money to something like that.  I’m one of them, and I suspect that Peter King probably is too. 

The magazine industry needs to change too.  For some reason, I now receive two copies of ESPN the Magazine every two weeks, and it enrages me every time I get them.  It also comes to my iPad, and I only occasionally look at it there, but the paper copies go right into the recycling bin when I get them.  (I only get it because I subscribe to ESPN Insider for its NFL Draft resources.)  The magazine is a piece of crap, and I wish I could opt out of it completely - but ESPN insists on counting me among the subscriber count that they quote to their advertisers.

The other magazines I subscribe to are GQ, Esquire, Golf Digest, and Playboy.  I read GQ on the iPad, and I’m hoping the others will catch up and offer a tablet-only subscription without sending me the paper magazine.  I pay for the content in these publications, because I think it adds value to my life.  If local news organizations write excellent content, they’d have a chance at getting paid for their content too.

When the world changes, and technology ushers in new forms of media, the smart companies adapt to the changes, and they set themselves up to thrive in the changing environment.  I think that’s what the Times-Picayune is trying to do.  Better to change proactively then to bleed out until you’re dead. 

I’ve never lived in Denver, so I have a Broncos-only perspective on this, but do you miss the Rocky Mountain News?  I don’t perceive that that many people really do.  That was a paper that bled out slowly until it died.  If it believed that its content was superior to the Post, it should have focused on the content, and gone online proactively.  We might all still be subjected to Lee Rasizer if they had.

Look, here’s the deal.  People still want to know things.  Advertisers still want to sell things.  A shake-up is underway, but everybody needs to focus on some “get in where you fit in”, and the market will decide what is worthwhile.  If the Saints really are the biggest deal in New Orleans, then the Times-Picayune is going to have Jeff Duncan, or maybe somebody else, reporting on them daily - even if it only appears on broadsheet three days a week.  Really, that’s a half-step to what needs to happen in the end, which is the move to 100% online content.

I care about people losing their jobs, and I’d rather not see it happen, but it’s unavoidable that the printers, warehouse people, and distributors are going to eventually leave the picture, because the costs associated with what they do are making the newspaper companies noncompetitive.  Most of the local grand poobah columnists will have to take a haircut or hit the bricks too.  (Good damn riddance.)

In the end, people will demand Journalism, and they’ll get it in some form or fashion.  They’ll just have to wrap their fish in something else.  I think, from 30,000 feet, that the Times-Picayune has a good chance to save themselves as a company, and I hope that they do.  After editing this article, Doug expressed to me that he hoped that, given New Orleans's recent history, the poor wouldn't be shut out from the news, with the scaling back of physical paper coverage. I agree with him that New Orleans is fairly unique, after Hurricane Katrina, and I hope that all who want access to the news are able to access it, through public libraries or other means.  My larger point stands, though - it's bad business to print broadsheet newspapers.

Peter King (who left newspapers a couple decades ago, for more lucrative and far-reaching platforms) has a sad because he got his start writing for broadsheet newspapers, and everything is all about him, but even when the last newspaper gets printed on paper, there will still be Journalism.

1.  I’m not in the arguing business, I’m in the saying what I think business.
2.  I get my information from my eyes.

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Ted's Analysis