Tom Mohr on Winning Online
Tom Mohr, former CEO of Knight Ridder Online, posted a strange amalgam of fantasy and fact about the newspaper world: "Winning Online" -- A Manifesto. The scare quotes are his, but perhaps apt.
A long list of people have riffed on this already, but here's my take.
Mohr points out that demographic shifts (young people don't read papers), a lack of online innovation (no killer vertical apps like Monster or Craig's List), and a very tough competitive environment confront newspapers today.
He makes 7 points, varying from interesting and insightful to stark, raving mad.
1. Breakthrough online innovation won’t come from newspapers
Duh.
2. “Local” is indefensible online
Yeah, well, the internet is local and international at the same time. Mohr's suggestion -- that the newspapers build "an industry-wide network" and become the largest online presence -- is cracked. First, because the parties won't do it, and by the time they did (if they could put their differences aside) the demographics will have moved along another year or so.
3. The big money is in vertical partnerships
Newspapers get a lot of their revenue from pointing people to partner sites, like CareerBuilder. But because they control the revenue, they can force good terms, and the newspapers have to go along. Mohr seems to be arguing that newspapers form a cartel, to drive up better terms from these revenue sources. Good luck.
4. Newspapers gain by moving onto common platforms
His delusion that some economies of scale could be created by newspapers moving their operations onto a common platform is wacked. You can't win a race by putting your foot on the brake.
They include a common content management system, common classified marketplace solution, common ad serving capabilities, a common ad network, shared content and feature functionality within key channels, a common underlying technical infrastructure and common supporting financial systems, metrics and analytics.I do not mean one site for the newspaper industry. Nor do I mean that every site would look the same. As is true today, the consumer would go to the unique URL they’ve always known, and see the unique newspaper.com site they would expect to find. Content would be prioritized and managed locally. Producer tools would offer templates that reflect usability best practices, but allow unique presentation and design.
However, there would be standardization where standardization adds value. Producer tools, ad positions, measurement tools and metrics, ad serving infrastructures and classified marketplace solutions would all be standardized. There would be one ad network for national advertising. And business development, shared content management and channel services in channels like travel, business and technology would all be centralized. Underneath the hood, the platforms would be built on a common, massively scaleable infrastructure to allow efficient addition of markets. A Switzerland Inc. would manage both the technology and the network, with all the inherent relationships involved.
Let’s face it. Making such a move is a monumental effort involving operating risk, loss of full local control, significant switching costs and real transition pain. The infrastructures currently in place are the product of years of blood, sweat and tears. Managing this kind of industry- wide change is a bold and daunting challenge. Is it worth it?
Collectively, the move to common platforms could drive roughly $700 million of the $4 billion in 2010 incremental revenues, plus significant cost reductions.
This is just an effort to slow the bleeding, but won't solve the real problem: all those people walking away from the newspaper. Cutting operational costs may slow the fall and soften the eventual crumpling when newspapers hit the bottom, but don't create growth.
5. Newspapers bring critical assets to the table
Mohr argues that newspapers have great local brands, with "trusted, compelling local content," and large sale organizations. But if these pieces are so great, why are newspapers falling so fast?
I don't think the brands are that great, especially with young people. I am sure that newspapers are less trusted today than at any time in the last 50 years, so that's hooey. And old-fashioned ad sales may not be a benefit today.
6. The window of opportunity is closing
His stats are interesting:
Only 19 percent of 18-34 year olds read a daily newspaper; 44 percent of them go to a web news portal. Broadband penetration has reached 57%. The blogosphere is doubling every 5 ½ months.
He suggests that the shortfall in newspapers' offline ad revenues must be offset by online, but how to get it?
7. It’s all about leadership
"Newspaper leaders are moving in the right direction." Well...
Recent activities by the Washingon Post and other exemplars suggest there are some folks with a brain in their heads, but the day of newspaper dominance of public discourse is rapidly drawing to a close. If Mohr thinks that some network of companies -- his Switzerland, Inc. -- can avert the trainwreck, he's cracked.
Ethan Kaplan offers this insight:
[E&P States The Obvious And Misses The Obvious]Newspapers are fundamentally flawed as a business in todays information society in the sense that they are too dependent on physicality for their validity. The entire company is based around this, from advertising (inches, lines, picas) to editorial (jumps, bylines, column space, etc). The business is architected to produce linear experience with a clearly defined line between the audience and the generator of content, and the entire culture dependent on a hierarchy between Us (paper) and Them (readers) which in a unilateral media environment, does not exist.
Newspapers built their entire value proposition off the supposition that they knew more than you. In a world where you are represented informationally in the same manner as them, this is not value anymore.
Perhaps the most glaring gaffe -- missing all the lessons of social media -- is Mohr's studied neglect of the people formerly known as the readers, as noted by Syndicator Blog:
[]The one thing that I noticed was the near total lack of talking about newspaper *readership*. All of Mohr's plan seems to center around "moving to a common platform" (so they can play negotiation hardball with Yahoo! and Google -- bad idea) or "vertical partnerships" (so they can sell more effectively to their advertisers). Mohr's argument betrays how he actually views the newspaper model: aggregate "readers" so that you can sell them to advertisers....ie, the customer of the newspaper is the *advertiser*.
It reminds me a bit of the conference business. Like the newspaper business, the conference biz has 3 parts to it: the "attendee", the "vendor" and the conference organizer. Its easy (especially as you move toward expo size) to come to believe that the "vendor" is your customer (as a conference organizer) -- but doing so will only give you one piece of the equation (and the easy one at that). The other piece -- the attendee -- is the more complex and less understood piece (and this holds true for newspapers and conferences).
The reason for the confusion is simple: the internet. Pre-internet, the distribution of information had a lot of friction in the process. Hence the value of newspapers and conferences (and other vehicles of information distribution). Post-internet, information distribution is undergoing that most wonderful of macro-trends: disintermediation. Since business models are built on monetizing around the points of friction, vehicles that monetize information distribution are having trouble. The result? Those vehicles must re-evaluate what they actually *do* (something Mohr never questions).
For conferences, the answer is obvious: A) provide information and *perspective* that is very hard to get online and (more importantly) B) create community. Since information distribution is now no longer your primary vehicle for monetization, community *must* be. Are there online "communities"? Sure there are. But no internet property has yet found a way to recreate a handshake, smile, laugh, or business done face to face. The value of conferences is that they aggregate communities of people and provide perspective (not information). That suble shift means so much.
For newspapers, it looks quite similar: "news" is no longer valuable, while perspective (opinion and editorial) is, and "aggregation of readers" occurs around community (not information distribution). Is this a "revolutionary" thought? You bet it is -- it challenges the holiest of holies -- the mission of journalism itself. In other words, newspapers are no longer newspapers.
Can Mohr's plan of winning online via playing hardball with search engines and vertical partnerships work? I doubt it. That plan ignores the "big elephant" in the room: the business model of aggregating readers around information distribution is breaking down. Fixing that business model means making *perspective* of supreme importance (who's the most watched news show on tv? Bill O'Reilly. Reason? Perspective). And it means realizing that aggregation is a function not only of perspective but community.
So, in the final analysis, Mohr is wishing on a star if he thinks that can turn it around.
What will happen is that the smartest people in newspapers -- not organizations, but individuals -- will learn from the successes of social media. Some of that learning will manifest itself in survival strategies: either individual or corporate. But most of the behemoth newspaper companies will fail, and soon, because nobody really cares very much. The majority of people who really care about timely and authoritative information have other sources, and better ones, than hardcopy newspapers. The advertisers have alternatives, too, and as people are moving away from print, the advertisers follow.
The only ones that really care are the newspaper people themselves, and as I said, the smartest ones will develop survival plans. Many of the best writers will move to blogging or magazines. The middle-level functionaries will find work in other industries. Get over it. It's happening, and no collective manifesto will stop the edge (social media) from dissolving the center (conventional media).
There's a few flaws in this argument Stowe. If news is dead then how can readers meaningfully contextualise what they read as 'perspective?' Doesn't the death of news mean that it becomes harder to figure out what's going on in the world as a whole? You can of course argue that authoritative sources on the ground spin themselves out to the blog medium but that's not easy. I'd bet any money you like that most newspaper readers haven't a clue who writes the news they do trust but will trust a brand - in my case the BBC - before trusting the person who is contributing to reportage in say Lebanon, Tokyo or wherever.
Readership is an ephemeral thing. We tire of reading the same people after a while. Writers tire of doing what they're doing. Blogging commercially is no less of a treadmill than any other form of journalism. What happens then? If trends I'm seeing are anything to go by, you can't assume the old cost structures won't, at least partially, be recreated.
Community - now there's an interesting concept. When I look at the number and variety of commenters it is usually those with a substantial intellectual investment in what's being said. A tiny fraction of the total universe of readers at my place. But the wider readership? Since they don't comment often, if at all, are they excluded? Maybe, maybe not. We're far from being in a position to say with any real authority that readers are comfortable with the notion of putting their heads above the commenting parapet.
Finally, we're miles off getting the editorial end of blogs right. Self editing is a tough call, especially when you're engaged in the topic. I don't know many people who are truly adept at being critical about what they say as it's a skill we're not taught. If that's agreed then the current near zero cost of blog production suddenly takes on a cost that has to be met.
Posted by: Dennis Howlett | September 05, 2006 at 11:37 PM