Like really, truly invested in the Web.
What if newspaper editors, publishers and executives realized what many of us knew then that the Web was going to be huge? Think of where this industry could be today.
Howard Owens proposes a what-if for the ages:
Imagine if the Los Angeles Times had shifted 50 or 100 positions to web-only content production five or 10 years ago how much further along would LATimes.com be in audience growth today?
Howard’s question arose from the debate about various Tribune Co. reporter’s productivity — or lack thereof at papers like the LA Times. Mark Potts weighed in and said that big metros have never been that productive:
The dirty little secret of big-paper newsrooms is that, well, they aren’t all that productive. That’s what gave a little edge to that alleged anecdote about the Post’s productivity–there usually a lot of reporters and editors just sort of sitting around, reading papers. Every big newsroom has its share–more than its share–of reporters who write only occasionally, of editors who spend an unfortunate amount of time sitting and waiting for the next piece of copy to come in. For a lot of reasons, big newsrooms just aren’t very efficient–as a high-ranking editor at a big daily said to me recently: “We could put out the same paper with half has many people as we have now–but they’d have to be different people.”
Which brings us back to our little hypothetical: what if instead of fostering bloat and waste, newspapers instead reinvested those wasted man hours into innovation? Why doesn’t the LA Times jettison those less-than-stellar workers and pick up some different people? Let’s get rid of all the print workers who aren’t that valuable and replace them with dedicated and entrepreneurial Web people.
And if you the LA Times has unproductive Web people, get rid of them too. You know what they say: It’s never too late.
What if your paper, today, shifted several print positions over to the Web? What kind of innovative — possibly industry saving — products could be developed?
This has nothing to do with journalists or journalism.
It has everything to do with poor decisions by business staff members. We can talk all we want about how journalists need to make more compelling content or care more about what readers and users want. But none of that matters if a newspaper company is buried under piles of debt or doesn’t do online advertising right or makes poor, highly-overpriced acquisitions.
The business decisions made by many newspapers, and their parent companies, have been killing this industry. We have witnessed an era of serial incompetence at many newspapers and their parent companies. Here are a few examples (and I’ll save you any discussion about how newspapers allowed Craigslist to fill an obvious void):
- The Journal Register Co. is about to be booted from the Big Board and is on the brink of defaulting on its massive amount of debt. This company proves that profit margins in the 20% range mean nothing when a company has seven times more debt than its operating earnings.
- Tribune Co. faces a default threat in 2009 because of its massive debt. Sam Zell took the company private with a leveraged buyout that has saddled the company with more than $10 billion in debt.
- McClatchy Co. buying Knight Ridder has been an unmitigated disaster for the company. In less than six months, McClatchy’s market capitalization has dropped in half from about $1.6 billion to around $800 million. It had a market cap around $2.5 billion the day before it acquired Knight Ridder.
Now not all newspapers are owned by large, incompetent corporations. Family-owned papers still need to compete more aggressively in online classifieds and field a better online advertising strategy. Some companies, like The Washington Post Co. have even seen stock market growth the last few years, due to smart business decisions.
How are these companies going to turn it around? I’ve got news for you — most won’t. Something has to give.
No amount of cost cutting will boost profits enough to cover some of these debts. In fact, cost cutting will hurt revenues, and thus gross profits, making it harder to meet debt covenants. If the newspaper industry is to turn itself around, it will be the business side leading the way with smart decisions.
The writing is on the wall. Much of what we know as the mainstream media is dying. The journalism that emerges from those ashes will be better, nimbler and smarter.
And hopefully we’ll all learn something from these past failings.