Category Archives: Newspaper

Post #26 – Newspapers are dead. Wait, what’s that? It’s a bird, it’s a plane – it’s Jeff Bezos!

Yes, it’s Jeff Bezos, strange visitor from another industry who came to newspapers with power and abilities far beyond those of mortal media owners. Jeff Bezos…who can change the course of mighty industries, make money with his bare hands, and who, disguised as Publisher Jeffrey Bezos, mild-mannered leader of a great metropolitan newspaper, will fight a never-ending battle for truth, profits and the American way.

I have recently come to the conclusion that I was wrong in an earlier post. There actually wasn’t anything the newspapers could have done to meaningfully change their current situation. My reason is that, even if they had hired the sharpest new media tech guys, the mere fact that sites featuring classifieds, want ads, car sales, real estate and entertainment ads were going to start up, spelled their doom.

Because newspapers had been able to sustain monopoly pricing in those areas for so long, which supported their journalism hobby, they were vulnerable to anything that offered a lower cost alternative. As a result, the rates for those advertising vehicles, which together made up typically 80% of a newspaper’s profits were bound to take a dive.

So even though I still believe that newspapers didn’t know what business they were in – they thought they were in the news business, but were actually in the classified ad business – I no longer think they could have done much to save themselves.

I’m hoping that Jeff Bezos at the Washington Post can prove me wrong still again. Amazon’s relentless focus on the customer is so encouraging, I would tend to bet on Bezos. Even as other famous customer-or-product focused companies like Apple are being accused of losing the Steve Jobs passion for excellence, Amazon has not wavered. It continues to chug along, providing an outstanding customer experience and valuable innovation.

If Bezos manages to pull it out – and he has the resources to keep at it for a long time – then we’ll look at what he’s accomplished and say, “Ahah. That’s what newspapers should have done.”

Of course it’s possible that what they should have done is find themselves a Jeff Bezos. Or a John Henry. Or a Mike Bloomberg. (NY Times give him a shot – he’s going to need a job soon.)

Update: This study from the Social Science Research Network underscores what I said above. It estimates that Craigslist cost newspapers $5 billion between 2000-2007. There’s nothing newspapers could have done about this.

Post #13 : www.handybook.com is exactly the kind of thing that newspapers should be doing. Why aren’t they?

While newspapers continue to bemoan their fate, innovative start-ups like www.handybook.com are doing the things that local media should be doing. It’s a site that helps you find and book a local handyman, cleaner, plumber, etc.

It’s backed by Highland Capital Partners and General Catalyst, two VCs that generally know what they’re doing. But imagine if, in case of Boston, this was being promoted as a Boston Globe service?

Not only would it be known more widely and more quickly, the security of having the Globe behind it would enhance its attractiveness to sellers and buyers alike. One of the concerns about a service like this would be the trustworthiness of people you have come to your home. Handybook checks them out, but the Globe brand would be a huge asset, not to mention the promotion it could offer “for free”.

This is the sort of system (along with jobs, cars and real estate) that the defunct New Century Network should have created for its member newspapers. Instead you see newspapers forced to share revenues with www.Monster.com and www.cars.com.

One can only hope that perhaps newspapers will begin to acquire services like these, which I’m sure would make Handybook’s partners happy.

Post #6 – Newspapers may be down, but they don’t have to be out.

Newspapers got in trouble because they didn’t protect their turf. No, I’m not talking about news. I’m talking about want ads, job listings, real estate ads and automative – areas that generated the majority of the profits at newspapers.

They didn’t do such a great a job protecting their news either. It shouldn’t have taken them so long to understand that the Internet was a continuous medium, not a once-a-day one. But that’s not really the heart of the problem, which was the decline of all those things that financed the news.

The good news is that it’s not too late for existing papers with a strong brand presence in their markets. The bad news is that it’s very late in the game, immediate action is necessary and the outcome is not certain.

The surviving newspapers still have an incredibly powerful local brand. It doesn’t matter whether people even still subscribe. They know the name. Newspapers need to use this residual brand power to get themselves back in the commerce game.

There are many ways they could leverage their local presence and brand. One that comes easily to mind is a local merchants and services marketplace. If the Boston Globe (my local paper) advertised that any merchant could have a free account and storefront, who wouldn’t take them up on it? The power of the brand is such that every store, every service business and anyone with anything to sell is going to take advantage. Who would dare take the chance of not being there, particularly when the price was zero?

Obviously the payoff comes in two ways. One is to sell upgrades from the free service and the other is to offer 100% local search as the ONLY way to access this extensive local database. And of course sell search ads around the search.

This is just one example. Newspapers need to look at all the markets they lost and see how their brand and local presence can get them back in the game.

Post #2 – Micro-payments

I am relentless in my belief that micro-payments need to play an important role in the future of online media. While I am not alone in this belief, “everyone knows” they’ve been tried and haven’t worked.

Tell that to the cell phone companies, particularly Docomo in Japan. When you use your smartphone to consume mobile content, or just make a phone call to get some highly personalized custom content (i.e. conversation), you are using a very effective and accepted micropayment system.

Your are either paying a bulk monthly amount for a certain number of minutes or maybe an unlimited plan. You may go over your monthly limit for data (most unlimited plans are going away) and you will start paying incremental fees for your content that month. Generally the content owner isn’t getting anything unless they are part of a service offered by your carrier, but the phone company is always making money and you probably never even think about it because the incremental cost is so low.

The same would be true if there were an underlying account charging you for each page you access or for each video you watch (or a per minute charge for video). For prices as low as a fraction of a cent, you are unlikely to avoid content you really want. You wouldn’t really have to think about it as long as the price was reasonable.

The problem of course is that there’s no way currently for content owners to put a micro price tag on their content and get paid. “Everybody knows” that micropayments don’t work. The reason is that a start up can’t get the critical mass. Only a handful of companies could implement such as system, but if they did, they would reap huge rewards.

The big ISP’s, like Comcast and Verizon, could do it, particularly if they co-operated to jointly exchange of customers. Amazon could do it. Google might be able to. Yahoo! has a shot at it, which could revive their growth hopes if successful. Netflix has a chance for a video-only version which could expand into other content.

There is a still a lot of high value content that is locked up because it’s too valuable to give away with only advertising banner support. If there were a viable micropayment system, a lot of owners would switch some portion of their content to it.

There are millions of dollars in fractions of a cent waiting for someone.