“Burn baby, burn.” These are the unforgettable words of a top-ranking Yellowstone National Park ecologist as fire ripped through the park’s forests in the summer of 1988. Few people cared that Don Despain’s words were taken out of context. The remark was used to pour scorn on the supposed devil-may-care approach of the National Park Service, which favored allowing natural fires to burn off accumulations of undergrowth in order to facilitate forest renewal.

A triple whammy of slumping advertising revenues, soaring newsprint costs, and competition from the Internet has left newspaper executives struggling to contain their own inferno. Tactics that helped newspapers survive for decades—budget cuts, promotions, the shuttering of peripheral publications—have failed to restore confidence among investors. In the first 10 months of 2008 alone, the shares of The New York Times Company dropped by more than 40 percent, while Gannett Company, Inc. shed two-thirds of its value.

The best approach for battle-weary media executives may be to let the fire run its course—however counterintuitive that might seem. That’s partly because there is little the newspaper industry can do to stop the advancing flames. But it’s also because today’s obsession with saving newspapers has meant that, for the most part, media companies have failed to plan adequately for tomorrow’s digital future. The economic downturn has added to the urgent need for a change of direction.

“This is a time for rigor, you need to know what you want to come out with at the other end of the tunnel,” said Jack Welch, who was known as “Neutron Jack” when he was CEO of General Electric because of tough steps he took to reshape ossified corporations. “This is not a time to skimp on resources but to focus them on your best businesses: stop the weakest, invest in the strongest.”

Newspapers still tend to define themselves by their paper rather than their news. By doing so they make a critical error at a time when readers and advertisers alike are going cold on paper and turning their attention increasingly to Web media. Newspaper executives have been slow to come to terms with the reality that the fat profit margins of previous decades are gone forever. Audiences, in decline since the 1960’s, have been on an accelerating downward trajectory—from a slow glide to a nosedive—since the Internet’s invasion.

Newspaper executives have often justified their lack of attention to digital media by pointing to the lower advertising yields. “When will the Web match the revenues generated by newspapers?” Maybe never. But it’s the wrong question. The whole point about the Web is that it costs a fraction of the amount of a newspaper to reach your audience, meaning that the break-even point for a newsroom stripped of the need to produce a newspaper is some 65 percent lower.

The probable elimination of a raft of second-tier newspapers during this economic downturn will provide a fertile environment for a new generation of digital media businesses to flourish. Here are 10 ways that will help newspapers make the transition to digital media companies:

  1. Narrow the focus. When newspapers operated regional monopolies, readers depended on them to cover a wide range of subjects. Newspapers still routinely use their own reporters to cover a gamut of stories, ranging from politics to sport and business. That’s nonsensical in the Internet era, when readers may choose content from a variety of sources. Instead, media companies need to invest more money in their premium content—editorial that is unavailable elsewhere but that is highly valued by readers. Go deep, not wide.

  2. Plug into a network. Media companies should finance the additional spending on premium content by eliminating editorial costs in areas where they are unable to compete with the best on the Web. If you are weak in sports coverage, link to the best Web site for your local sports. Well-curated hyperlinks to other Web sites are a valuable service for readers, and they cost nothing. Media companies will increasingly see themselves as part of a chain of content, as opposed to a final destination. Journalists will act as filters, writing with authority but also guiding readers to sources that add depth to coverage. The future of journalism is selling expertise, not content.

  3. Rolling news with views. Newspaper deadlines suit publishers, not readers. News is a continuum. It never starts or ends, and coverage should reflect that reality. That doesn’t mean a newsroom needs to be open for business 24/7. If 90 percent of readers don’t log on between midnight and five in the morning, there is little point in being staffed overnight. But it is critical to be alert at the time when your traffic surges—typically between 8 and 10 in the morning and again around lunchtime. Remember: It’s not simply about serving breaking news—the AP and Reuters can handle that. The role of a newspaper company on the Web is to add value: look at a story from a number of angles, engage your audience, add multimedia.

  4. Engage with your readers. The explosion of blogging and social media Web sites has created a culture in which consumers of news expect to be included in the news publishing process. Closed operations that shun reader engagement will increasingly be seen to offer a second-rate experience. Create functionality that encourages readers to share eyewitness accounts of breaking news, rate services such as restaurants and hotels, and get into discussions and debates.

  5. Bottom up, not top down. The reporters on the ground are closest to your readers. They are therefore best placed to conceive, create and nurture community Web sites. Look at which reporters or editors get the largest mailbags and free them up to manage blogs on subjects that your readers are passionate about. That’s likely to be narrow areas such as gardening or a mom’s network, rather than broad subjects, such as politics or sports.

  6. Embrace multimedia. Train editors to see video, photo galleries, graphics and maps as equal storytelling forms to text. A story about Tina Fey’s takeoff of Sarah Palin is incomplete without video highlights from “Saturday Night Live.” A story about a soldier’s life on the frontline in Afghanistan is best told with video, a map, and pictures as well as text.

  7. Nimble, low-cost structures. About 75 percent of newspaper costs have nothing to do with the creation of editorial content. In a digital era there may not be any need for printing presses or vans to transport a physical product. But the switch to digital should also be an opportunity to challenge the need to hold on to other in-house costs. Newspaper companies are bad at technology, so a digitally minded chief technology officer will be able to get cheaper and more effective services by outsourcing. Newspaper sales teams don’t do particularly well at selling ads on the Internet; too often they sell ads that are irrelevant to a reader’s interests in an era when Google has made relevance key. If your sales team can’t beat Google, then outsource to Google.

  8. Invest in the Web. Don’t try to suck too much revenue from your fledgling network. Your Web site needs investment before it can fly. Large networks, such as rail, phone and utilities, took decades to yield substantial returns. A Web revenue-growth model cannot simply be a mirror image of the decline in your newspaper sales.

  9. Shake up leadership. One of the biggest obstacles to planning for a digital future is the senior editor or manager who is wedded to the analogue past. If the people who run your newsroom aren’t passionate about your digital future, it’s certain not to materialize.

  10. Experiment. We are operating in the most creative phase of the media industry’s history. A time when broadcast, text and social media are colliding. Don’t be afraid of failure. Try new projects, see what works, and build on success.

None of this will come easily. It breaks a newspaper culture forged over a 400-year period. For decades now, newspaper newsrooms have centered on “going to press,” which has meant pointing all efforts towards a single deadline that culminates in the publishing of a definitive version of a story. Journalists who’ve spent a lifetime working around this kind of deadline often cannot make the switch to the continuous reporting demanded by Web audiences.

Nor are reporters and editors particularly good at interacting with readers. As long as newspapers have existed, editors have determined the news agenda and then rammed it down readers’ throats. Sure, readers are welcome to send a “letter to the editor.” It may even get published. But typically most editors have little interest in an ongoing dialogue. Linking to competitors’ news services certainly doesn’t come naturally to newspaper editors either, whereas it’s seen as a sign of sophistication on the Web. Then there’s the lack of familiarity with multimedia and the art of stitching together text, video, photos, maps and graphics.

Still, the dominant newspapers have a huge advantage over start-up news operations: They are trusted brands at a time when the proliferation of news sources has made trust a premium for readers and advertisers alike. That’s a good springboard for success. But time is running out.

Edward Roussel is the digital editor of the Telegraph Media Group (TMG). He manages the Telegraph.co.uk Web site and oversees the development of TMG’s expansion into other digital media, including the recent launch of Telegraph TV, a news-on-the-Web service in partnership with ITN. He was instrumental in restructuring the Telegraph’s newsroom, with a view to placing digital media at the core of the 153-year-old newspaper group.

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