Post Mortem For A Dead Newspaper

from the looking-backwards,-not-looking-forward dept

John Temple, the former editor, president and publisher of the now shuttered Rocky Mountain News, has been running a great blog about issues from the newspaper industry over the past few months. He consistently has been saying stuff that made me wonder why the Rocky Mountain News didn't seem to do the sorts of things he seemed to constantly talk about... and now he's explained why. He recently gave a talk at Google about lessons from the collapse of the Rocky Mountain News in both text and video form. It's long, but well worth watching/reading:

You should take in the whole thing, rather than just reading my summary, but he basically goes over the last decade and a half or so of mistakes that the Rocky Mountain News made in terms of trying to figure out the online business. The key takeaways aren't that surprising if you're a regular reader around here. The company kept defining itself as a newspaper company, not a news organization (or, better yet, a community builder). Everything it did was based on how it would impact the paper edition. The focus was not on competing with web properties and services, but on the other major newspaper in town, the Denver Post. Things got so bad that when the Columbine Massacre happened, the newsroom refused to give any news to the web people, because they were afraid that the Denver Post would "steal" it.

It seems like pretty much everything was based on looking backwards, not forward. There was little effort to figure out how to better enable a community, or any recognition that the community of people who read the paper were the organizations true main asset.

The talk is amazingly honest, coming from someone who accepts a share of the blame for what happened, and should be required reading/viewing for anyone in the media business, new or old. The same game is playing out not just in newspapers, but in a number of other businesses as well. Like the Rocky Mountain News, those businesses are looking backwards and defining themselves on the wrong terms, while newer startups don't have such legacy issues to deal with.

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Why The Newspaper Paywall Will Fail

from the it-prevents-real-growth dept

It's no secret that we think newspaper paywalls are a massive disaster in waiting. The number of folks actually willing to pay is a lot smaller than many in the newspaper industry think, and the papers' failure to recognize that they need to add more value rather than take it away by locking up their content pretty much guarantees the widespread failure of the plan. But Kevin Kelleher, over at The Big Money has a nice article that sums up exactly why paywalls will fail:

For the sake of argument, let's say that news sites are routinely charging readers in five years. By then, the economy may be substantially healthier than now, and advertisers will be looking for sites with large, loyal readerships to sell their ads on. But that won't include newspapers. They'll be catering to that 10 percent of their online audience willing to subscribe. The rest of the Web will have long stopped linking to--and talking about--their stories. The dollars will flow right past the newspapers' pay walls. And then they'll really be sorry.

And that's assuming 10% are willing to pay, which strikes me as high already. One other quibble with Kelleher's piece: he suggests that newspapers stood a better chance if they started trying to charge in 1994, ignoring the fact that many newspapers have tried to put up paywalls in the intervening years, and nearly all of them (with a very small number of high profile exceptions) have discovered that they don't work. Whether it's 1994, 2009 or 2024, it doesn't really matter. The future of online news is not behind a paywall.

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Out Of The Ashes Of Newspapers...

from the looking-forward dept

Lots of folks have been writing in asking about the news that the Seattle Post-Intelligencer has finally admitted what many people knew was going to happen for a while: the newspaper is shutting down, while the website will live on with a much smaller staff. Of course, rather than focusing on the "death" of the paper, it's a lot more interesting to look at the opportunities the new site will embrace. The kickoff discussion seems to be full of excitement about a chance to do something different than to simply mimic what everyone has been saying a newspaper needs to be:

We're going to break a lot of rules that newspaper Web sites stick to, and we are looking everywhere for efficiencies.... We don't have reporters, editors or producers--everyone will do and be everything. Everyone will write, edit, take photos and shoot video, produce multimedia and curate the home page.

We definitely need more experiments and flexibility, so it will be worth watching what happens here. I'm not sure it's the best idea to make everyone do everything (splitting jobs up so that there's more streamlined efficiency does have value), but it's great to see that the new folks are at least open to experimenting -- with a focus on delivering more value (finally!) to the reader:

We're going to focus on what readers are telling us they want and on what makes SeattlePI.com essential and unique--within the context of our local news mission, of course. We know what we do best, and we are going to build on the things that we know our readers love, and look to find new ways to inform and entertain them.

Meanwhile, with the Rocky Mountain News shutting down a few weeks back, some of the reporters there have gathered together to try to startup a brand new online-only publication called In Denver Times. They're making an interesting play, however: saying they'll only start it if they get 50,000 people to agree to pay $5/month by April 23rd. That seems like a tall order, given that people aren't really being told what they're getting. The reporters say that plenty of the news will be available for free on their site, but subscribers will get access to bonus materials, such as opinion pieces and special chat rooms. But, for that to work, there needs to be a clear benefit to those, and since they don't yet exist, there may be something of an "empty room" problem.

Either way, it'll be worth watching both experiments play out. They may not be successful (and, if I had to bet, I'd probably bet against both), but it's great to see new experiments and ideas being tested directly out of the ashes of these two newspapers. It makes it pretty clear that the death of a newspaper certainly doesn't mean the death of journalism.

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Should Satellite Radio Ditch The Satellites And Go Online Only?

from the kill-two-birds dept

In discussing the troubled satellite radio business, we noted that two of the major difficulties faced by the industry were the huge capital costs required to build and maintain the business, combined with the rise of (somewhat unexpected) competition in the form of internet radio and internet downloads combined with portable MP3 players like the iPod. Over at Slate, Farhad Manjoo has a suggestion that would solve both of those issues: Sirius XM should ditch the satellites and become a web only broadcaster. It's an interesting idea, but it seems unlikely (even though they offer online streams currently). Sirius XM still remains so car focused, it still thinks that being in automobiles is a competitive advantage. However, as Manjoo points out, it's actually damaging the company, because it's had to pay large sums to automakers to get the devices installed in cars. Instead, if it went to an internet-only solution, and cut the subscription prices, it could reach a much larger audience, much more easily and cheaply. Build mobile apps, and people can use their phones to listen to content. Add downloadable podcasts of popular shows, and anyone with a portable device can time shift. It's so reasonable that it'll never happen.

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Was Sirius' Bankruptcy Inevitable?

from the possibly,-but-it-had-help dept

Back in 1999, when plans for satellite radio were first talked about, I thought it was destined to fail. I had two reasons for why: I didn't think there really was that much demand and having just closely watched the disaster known as Iridium, I was intimately familiar with the massive and business-strangling capital costs associated with running a satellite-based business. It just seemed so capital intensive that any underestimate in terms of demand would kill you. And, in fact, Sirius has a pretty long history of being on the verge of failure.

With the news of Sirius XM preparing for bankruptcy, it's worth revisiting those original thoughts. While I'd love to claim credit for calling this a decade ago -- I think my reasoning turned out to be wrong. I vastly underestimated the number of folks willing to sign up for satellite radio (though, I think I was correct in recognizing that the number of subscribers would need to be massive and that would be difficult to achieve). And, while the capital expenditure costs were large, it seems like they, by themselves, may have been imaginable. What I hadn't fully expected, was the massive expenses the companies (now company) would ring up trying to lock up "talent" to drive subscriber numbers up. Also, I didn't expect ridiculous regulatory restrictions. The 18 months it took federal regulators to approve the merger between XM and Sirius, combined with the ridiculous restrictions that were put on the combined company significantly contributed to satellite radio's troubles. And, finally, additional competition in the form of internet radio and podcasts/portable media really have put pressure on satellite radio -- none of which I foresaw at the time.

While the company is clearly looking to restructure and keep going, you have to wonder if it even makes sense at this point. With those alternatives increasingly becoming popular in the market, it's difficult to see how satellite radio can possibly provide enough excess value to pay for the increased capital costs compared to the competition. Even if the company restructures and comes out of bankruptcy, who's willing to bet it will have to through this whole process again in a few years?

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Airline Threatens To Sue Betting Site For Taking Bets On When It Would Go Out Of Business

from the what's-illegal-about-that? dept

Apparently, a Scottish airline, Flyglobespan, has threatened to sue an online betting site because it was taking bets on what airline would be the next to go out of business, and had odds on Flyglobespan. The site did stop taking bets, but says it was due to a lack of interest, rather than the threat of a lawsuit. However, it's not clear what law it would be breaking to offer such a bet. You can understand that the company is concerned that potential passengers might think the airline is at risk, but it's not clear that's enough to stop any such bets.

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That Didn't Take Long At All: $89 Million Australian Internet Filters Called A Failure

from the that-was-fast dept

Last August the Australian Prime Minister announced plans to spend many millions of dollars to offer free internet filters that parents could use to keep their kids from surfing porn. The filters were cracked by kids in a matter of days. While we noted that this should have made politicians realize what a waste the program was, instead they just said it explained why they needed to spend even more. Reader Stack writes in to let us know that the Australian government has now declared the entire program to be a failure. While the government had predicted that 2.5 million households would make use of the filters, only 144,000 were downloaded or ordered on CD-ROM and only about 29,000 were actually being used -- a wee bit under the targeted amount. Of course, rather than recognize that maybe spending money on filters isn't the best way to deal with this issue, the new government sees this as more evidence to go ahead with its plan to force ISPs to censor the internet instead. How many more millions will get wasted before that program is declared a failure as well?

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Palm Realizes It's Not Apple; Closes Retail Shops

from the so-much-for-that-plan dept

Over the last decade, plenty of technology hardware companies thought it would make sense to open their own retail shops. Sony, Gateway, Palm and Apple all went down that path. Of that list, only Apple has been able to turn those retail stores into something valuable. Gateway was the first, but its retail effort failed miserably. Sony's retail effort was always based more on the idea that the stores are not there to sell products, but just to display them. Sony has always admitted that the stores were more about brand and product awareness than sales -- but that's partly because it doesn't want to piss off its channel, so it prices everything quite high in its own stores. Apple doesn't have that problem, as it has total control over its distribution channel and retail pricing. Of course, the difference here is that Apple's stores and products are designed so people actually want them.

And then there's Palm. Palm used to always be compared to Apple, back in the day. But, that was back in the day when Apple was a struggling computer company. Since Steve Jobs reinvented Apple as being cool again, those comparisons sort of disappeared. Its own retail strategy was clearly an attempt to copy Apple, but without the cool products (or the cool store design) it never did anything useful for the company. About the only surprise coming out of Palm's decision to shut down its retail stores is that it took this long to decide to pull the plug.

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