JOURNOVATIONCREATING THE NEXT NEWS STARTUP

Notes on Chapter 1 of “Entrepreneurial Journalism” by Mark Briggs

Professor Dan PachecoChair of Journalism InnovationS.I. Newhouse School, Syracuse University

Reading Assignment #1

• Notes on Chapter 1 of “Entrepreneurial Journalism” by Mark Briggs. Available for Kindle and in print at http://amzn.to/NxjtFx

These are some things from my reading that I found of interest. To learn more, I highly recommend buying the book. – Dan Pacheco

My biases

• My notes reflect my bias as someone who has worked in the newspaper industry off and on for 10 years, and a total of 17 in the Internet space.

• Briggs’ chapter explains better than anywhere else how the Internet upended newspapers’ business models, and also why even the most digitally innovative newspaper companies failed to solve what Harvard professor Clay Christensen calls “The Innovator’s Dilemma.”

Notes

• About a third of newsroom jobs that existed at newspapers in 2001 were gone by 2010. Newspaper circulation declined by 25% in the same period.

• Past: Legacy media companies controlled delivery of information. After internet, they no longer have that monopoly, and thus must compete.

• Well into 2000s, media companies responded to shrinking audience by raising advertising rates!

Notes• Previously bundled commercial services – like home listings, car ads, classifieds – work better as standalone services, like Zillow, Cars.com and Craigslist. This is great for consumers, but bad for media monopolies.

• Audience decline begun before the Internet. The Internet just sped it up. Percentage of Americans reading newspapers started dropping in 1940, even as total circulation rose due to a growing population.

• “Revenues declined because traditional media companies jealously guarded their cash cows instead of pushing new lines of business.”

Newspaper revenue, 1985 – 2009. Source: Pew Research Center’s State of the Media report, 2010.

Notes• Looking back: Newspapers were once the disruptive force in media. From 1880 to 1920, newspaper growth rate mirrored that of Internet growth today.

• Rate of growth of new Internet media companies is much faster. E.g. Huffpost added 13M UV’s in just four years.

• Television: Thanks to online video, top rated TV shows today get 12M viewers – which would have lead to cancellation in the 1970s.

Notes• Audio audiences (“radio,” internet radio, podcasts) have fared better due to aggressive digital strategies. Talk radio also helps: it’s cheap and controversial topics attract listeners.

• Bloggers do a better job of growing audiences because they’re small and scrappy, and earn half as much as traditional journalists.

• “In the near future, instead of a daily newspaper with 150 journalists, a small city might have 20 digital news operations.” This mirrors newspapers in early 20th century.

Notes• West Seattle blog, founded by Tracy Record. No startup cash, no business plan. Makes $100,000 a year. Two staff, lots of photo freelancers. 11M pageviews.

• Tracy Record: “Don’t do what you think you want to do unless you know there’s a need for it and someone will be helped by it. That’s the sort of thing you can do as a hobby; it won’t be a business. If you don’t have any idea what there’s a need for, are you sure you want to do this?”

Notes• More people read a newspaper in print than watched the Super Bowl in 2011. “It’s not a readership problem; it’s a revenue problem, especially on the digital side of the business.”

• Broadcast: Evening news viewership has dropped, but broadcasters are building large digital businesses.

• Trading physical dollars for digital dimes.

Notes• Misconception that readers used to pay for news. Print subscriptions rarely covered the cost of ink of paper and didn’t cover actual work of journalism at all. Those costs were covered by advertising.

• Yet people just assume that newspaper readers online should pay for online news.

• This misguided approach has led to paywalls, which largely haven’t worked.

Notes• “Publishers didn’t recognize … that the Internet’s unique capabilities would make their content look like black and white TV in the age of color.”

• Legacy news companies hired as few people as possible to manage digital products. Most of those hires reformatted content created for print.

• “Traditional newspaper stories and TV news broadcasts are the product of the age of scarcity. The Internet is about abundance.

Notes• “When legacy news publishers forced the same content product into a new Web-based market, they were offering the equivalent of VHX casettes on Netflix.”

• “Entrepreneurs who try to reproduce a newspaper in digital form are doomed to the same obsolescence.”

• Ad dollars aren’t just shifting from print to online. They’re shifting from bundled products built for a monopoly to more focused niche, digital products that come up in search.

Notes• “Deliver a product that meets the needs of today’s news consumer, and you will build an audience and reap the rewards.”

• Online ad dollars grew 13.9% to $25.8B in 2010, eclipsing ad spends in newspapers for the first time.

• Pure online companies not all growing. AOL and Yahoo have both fallen.

Notes• Why has newspaper company revenue not trasferred from print to digital even as their audience is shifting? Because newspapers sell online ads the way they did in print. Lack of innovation around ad model.

• The Innovator’s Dilemma: Companies that have significant market share spend their time and energy protecting their position instead of expanding into new markets or attempting to innovate with new products.

Notes• Newsrooms are traditionally the most change-resistant and defensive cultures in any industry. Sense of entitlement, belief that because of their place as a public trust and constitutional protection that they don’t need to compete for attention just like everyone else.

• Enterprising journalists who have embraced changing dynamics were mostly mavericks.

Notes• The new, collaborate, transparent and authentic journalism:• Engage with audience and invite collaboration with it.• Build trust.• Be transparent.• Embrace diversity of voices.• Write with your own voice (be authentic).

Discussion Question #1• 1. True or false: Newspaper companies' total audiences have been declining in the digital age.

Answer• Answer: False! Overall “newspaper” readership for print and online together has actually increased. But digital ad revenues have not been as high as print revenues.

Discussion Question #2• 2. Newspapers and TV biz models are based on scarcity. Internet is about abundance of content, so it breaks the model. If space is now abundant, what is still scarce that digital businesses can leverage?

Answer• (Answer: Open ended, but I think time is increasingly scarce. If you can save people time, they value you.)

Discussion Question #3• 3. Overall online ad spending eclipsed newspaper spending in 2010 for the first time. But it didn't apply to all online properties. AOL and Yahoo both fell. Why do you think that is?

Answer• Open ended, but my view is that AOL and Yahoo’s one-size-fits-all portal-based approach is a mismatch for how people really consume content online through 1) search, and 2) social media.

Discussion Question #4• 4. The author says newsrooms are the most change-resistant and defensive of cultures in any industry, that they assumed being part of the public trust and having constitutional protection meant they didn't need to compete like everyone else.

• Do you agree or disagree? How would you push for change from within an existing company?

Discussion Question #5• 5. Syracuse's daily newspaper (the Post-Standard) is going to three days a week in print. It is focusing even more online. Based on what you learned in this reading, what should the Post-Standard staff do on Syracuse.com and elsewhere to boost audience and revenue together?