A new model for newspapers.

Last winter I began floating an idea, born of necessity, for a new approach to newspaper publishing. In a nutshell, I advised that we drastically shrink the newsprint product to a 32-page broadsheet or tabloid featuring only staff-written feature-length content and the best material available from other publications worldwide - a book review on the new Keynes bio from the Guardian, a Dutch urban-planning journal's take on the remarkable waterfront rejuvenation that is Chicago's Millennium Park.

And all of the "generic" news - the news developments of the day that everyone from CBC Radio to Yahoo makes available free to millions of consumers - would be shunted to the Web. It would still professional newspaper journalists editing that generic news, "ordering" it in importance in traditional newspaper style, segmenting it into traditional Life, Sports, Business and other sections. The generic news would still be refashioned by the newspaper's staff, adding local angles and content to make it as relevant to as possible to an audience in Indianapolis or Vancouver - something papers in those cities would have to do to make their flagship websites competitive with the same generic news as it appears on the dime-a-dozen news roundups made available by everyone from Google News to Yahoo to Sympatico to the BBC.

I learned that Arlen Spector, the longtime GOP U.S. Senator of Pennsylvania, had crossed the aisle to the Democrats - a stunner for any political junkie like me - from the widescreen TV tuned to CNN in my dentist's waiting room. I first learned of Magna International's interest in buying Opel-Vauxhall from my girlfriend, who got the news from one of those mini-TV sets in the elevators of downtown office buildings. Traditional papers now have a near-impossible job competing in breaking news. So maybe, in our print editions, we should just stop trying - and consuming tonnes of newsprint in the process.

Can we compete in breaking news online? You bet. We can do it better than anyone. Newspapers alone have the large staffs of professional journalists expert at rapid gathering of accurate information. We have graphic artists expert in making maps and compelling charts. We have the librarians expert in pulling together at short notice previous events of a related nature. We have columnists expert on terrorism, the use of steroids in sports, and the evolution of Harper's position of aboriginal rights and living conditions. On the Virginia Tech massacre, the Star's Web team was taking real-time news feeds from more than 100 sources within 15 minutes of the initial reports. Unlike our print edition, online we could get that information to our audience with maybe a 5-minute delay to ensure the veracity of it.  

I confess this new model is as much a survival strategy as an exciting, drastic change in newspapering. And there are big risks. Chief among these is that online penetration rates in North America trail those in Europe and Asia. Many readers of North American newspapers still don't have a computer, much less an Internet provider. Many of these folks will not be satisfied with the new, vastly shrunken newsprint edition U propose for their daily paper.

The other big risk is how successfully can we "migrate" newspaper advertisers to the newspaper's bulked-up online edition? Even at the traditiional papers most successful in this regard, online ads represent only 8% or so of total ad revenue. There are plenty of ads now to be seen in newspaper online editions. But their price is heavily discounted. Newspapers still have a lot of work to do to convince traditional advertisers - as conservative as newspaper proprietors, if not more so - that their online ads are powerfully effective. Why effective? Because they can move, talk, and be hyperlinked direct to a faux car showroom where you can design your own vehicle. And perhaps most important, the ad client has more measurable assurance than ever in newspaper history that his or her ad is being read.

As I mentioned, survival. Every broadsheet page of newsprint, published 400,000 times, costs a fortune. Given the paucity of ad revenues in the current recession, every big city North American paper has had to focus on cost reduction. And so traditional dailies have shrunk. In particular, we are shrinking the all-important "newshole," the portion of space available to journalists after the ads have been placed. We have been significantly shrinking the newshole for the past two years, without lowering the subscription or cover price we charge readers. Thus we are, without acknowledging it, giving our readers less and less content and charging just as much for it. In 30 years of business journalism, I've never known of a business that succeeded by offering less value for money. Meanwhile, in our online products, these same newspapers give away their content. That too is unsustainable.

So squarely confronting the new reality, as Peter Drucker would call it, I propose that we provide a vastly enriched though must smaller print edition. Its virtue is that it provides "essential" content. The meaning of the news. What the events of the recent past tell us about how the future is likely to unfold. Articles that delve into the complexities of things, from our confused mission in Afghanistan to the root causes of the intolerably high rate of medical error in our hospitals.

The quality threshold would rise immeasurably. There's no shortage of content in the world, especially as it becomes McLuhan's global village with the advent of "citizen journalism" and the technology making that possible. In future, the print edition of your daily newspaper will provide only the best, most reasoned of this content. It will be a lean, efficient read, shorn of fluff and the 90% of content we currently provide that most readers have no use for. Bulky newspapers are clutter, difficult to "navigate," and long ago became an environmental issue for thousands of readers that traditional papers have lost on bulk alone. People actually feel guilty taking a subscription to a hefty paper, and then foolish when as so often happens they never get around to reading it. You can only take a pile of two weeks' unread papers out to the recycling about a dozen times before realizing it's time to cancel your subscription.

It goes without saying that the new 32-page paper, likely in tabloid or "Berliner" format, is more accessible and far less physically intimidating than the broadsheet model favoured by today's general-interest hometown dailies. Conversely, the space available on the Internet is infinite. The savviest operators of newspaper websites will be those who make the tremendous volume of content we provide there easiest to navigate. Who put an interpretive and local "spin" on generic news that makes it the preferred version of news that's otherwise available in hundreds of other places online, including now cellphones, and from free traditional broadcasting.

How this model marks a return to commercial viability is that we charge a stiff cover price for the new, smaller print edition - at least $2 and more like $3  the cost of a latte from Timothy's or Starbucks. I'm confident that in the case of a big-market daily, at least 50,000 customers will buy that product every day. Which means for the first time in modern newspaper publishing, circulation revenues will actually cover the cost of newsprint and distribution.

There will be advertising in this new print product. The cost per thousand (CPM) will rise dramatically. But the quality of that readership - as measured demographically in reader income and education levels and spending habits - will also be much higher. That will justify a high enough CPM to cover our other big expense, the compensation for those producing the editorial content.

The online edition, meanwhile, offers the advertiser a massive audience, and thus a dirt-cheap CPM. The interactivity, real-time reporting, citizen journalism, blogs, vlogs and intense local coverage offered online will make it a compelling read. Yet the editorial CPM - the number of journalists and technical and support staff required to serve every 1,000 readers - will plummet as ad revenues gradually rise to cover, and then surpass, the purely editorial cost of producing the online edition. No paper and ink costs for an online edition.

What I'm proposing, simply, is to vastly reduce print-edition costs while greatly improving the quality and essential-reading nature of the print product. And at the same time, greatly increasing the revenue potential of the online product as ad-buying practices gradually change to more fully embrace this new medium. Our much smaller new print edition will pay for itself and eventually become lucrative. Our online edition, with its comparatively low production costs, enormous audience "reach," and selection and editing of content to be powerfully relevant to a given audience, will see it, too, become lucrative in time.

It will not be an easy transition. But the transition already is underway. At most traditional papers, some of the best reading is to be found in their online editions. And everything in the print edition is made available online in any case. Should we charge readers for this online content, as the Wall Street Journal and Financial Times do? Probably not, since the online-pay model has been tried widely and usually failed.

There certainly may come a point at which we might charge for select high-value online offerings. But not now. For now, the nascent Web - and it is nascent compared with the 400-year-old history of newspaper publishing - remains a realm where users expect content to be free. One might as well try reversing the flow of Niagara Falls as change that reality. In 10 or 20 years, after online newspapers have proved their value to readers, and the N.A. Internet penetration rate exceeds 100%, we might then find ourselves reaping considerable subscription revenue from all or part of our online products.

It's gratifying to see that a few newspapers now are willing to at least contemplate a new way of newspapering. In Toronto, both the Star and Globe now are giving serious thought to this model, among other substantive alternatives to traditional newspapering. 

Unfortuntely, though, the industry's current "silver bullet" is to form an ologopoly, championed by Rupert Murdoch, in which all major newspaper publishers agree to start charging for online content all at once. The players know they can't be the first to do so, risking an audience exodus. So Murdoch all year has been furiously signalling his peers that he's about to charge for online access to his general-interest New York Post (which he gets away with at his specialized Wall Street Journal). But this would drive at least half the audience of the Post, already a chronic loss-maker even before the advent of the Internet, to Mort Zuckerman's New York Daily News. Which means Mort and every other big-city publisher has to follow Murdoch lock-step or the thing doesn't work. Which is why, for all his pronoucements about paid online beginning early this year, Roop has yet to charge even for flagship Post features like the Page Six gossip round-up.

So, without disturbing the sleep of the anti-trust folks in Washington, Murdoch is burning up the phone lines with his peers, and overcoming his personal press-phobia to grant interviews to anyone willing to listen, in which he explains his idea for reversing the flow of Niagara Falls. Murdoch's transparently desperate gambit is notably lacking in the brash innovation we've long known Roop for. It's the strategy of a man running scared.

And of course it won't work. The Web leaks like a sieve. A paid-up subscriber to the Indianapolis Star will promptly re-post a supposedly "firewalled" article on his or her blog. And from there it will show up in a hundred free-access places on the Web before the sun rises again over the Indiana capital. The music industry, or what's left of it, learned its hard lesson about focusing on protecting its intellectual property rights - to the point of bringing charges against 13-year-old girls who improperly downloaded a copyrighted song. Result: the traditional music business, as we knew it from its origins in 1920s-era sheet-music publishers, is effectively dead.

How much better, I think, to offer readers a higher-quality print product and a higher-quality online product. And ask audiences and advertisers to pay a tariff that reflects genuine value for money.

Comments

[buzz]

This is one of the reasons I'm a fan of the free commuter papers. They're light and easily digestible. You're not afraid to pick it up while waiting in a lobby - you know you can quickly finish it in the 10 minutes you're waiting.

The idea of explaining things, something I call "Wiki Media" is essential. The tabloid, dumbed-down culture of news media today is leaving people without explanation or context. All we know is Iggy wants an election, we don't really know why he's so upset over EI or why he should be.

Strombo does a good job of laying the foundation of interviews with a good 45s backgrounder before laying in to an unfamiliar guest, this sort of thing would be PERFECT for the newspaper.

Relevant context over cut and paste content.

[JP]

As long as there is a press involved the breaking news will happen in electronic form. On twitter a news story breaks in the matter of minutes. The argument that "Many readers of North American newspapers still don't have a computer" is interesting and a fact that is not at all accurate by my research. When you say many is that 5%, 10% 50%? I will give you a hard fact: Twelve million Canadians log onto Facebook alone each day and spend no less than 30 minutes viewing the site. That is only Facebook and not including the millions of other websites being viewed online. Now in defence you are going to probably tell me that the demographic that I am referring to is 18-24 and not your newspapers target market right? Well the fastest growing segment on social networks like Facebook is 55 plus! That is the life blood of the newspaper industry I will also add that for the last 5 years the baby boomers have been the largest consumers of both computer purchases and high speed Internet. I know this from detailed research that we did while working at a very large telco here in Canada a few years back.

Now for the press issue: Regardless of size and price of the paper you have the problem of printing and distribution. Even a paper that only had a few pages to print needs to be printed the plant, bundled and placed on a truck for delivery. Last time I checked most newspapers had moved their presses to the suburbs to save money back in the late 80's and early 90's. By the time your small paper has hit the stands the break part of the story has happened. The new order of breaking news is: 1) Incident happens. 2) Story is broken online 3) TV is 30 minutes late on the breaking story then followed by the online versions of the newspapers. [fact checking and editor approval etc needs to happen before the paper can even begin to think about printing the story], 4) Then finally the printed version of the newspaper runs the story. [in my town both newspapers are morning editions, that means another 12hr delay in the break.

That is not going to change and the printed version of the newspaper will never be able to compete. Not ever. The reality is still that people wait for the traditional media to confirm the breaking story and look to the journalistic integrity to get the back story and follow up. That is what years of training and an editor are for.

My advice? Forget the breaking news and focus on the in depth follow up of a story. Breaking news is purely digital.

[Michael Josefowicz]

I think you are on to something. Given the newest print technology the previously unsustainably expensive methods of one size fits all printing is being brought down to numbers that should work in a print based advertising model.

Two things I would like to get on your radar.

One is that it is now practical, depending on the exact situation, to produce run lengths of as low as 100 to be able to deliver paper to a well defined eco niche of readers.

The second is that it's likely that QR codes will scale in the States very soon because of the telecoms are including QR readers on the next generation of smartphones. As that scales it will be possible to connect internet TV with print product.

That should present many new opportunities for newspapers. For advertisers in print the value proposition is clear. By networking cable channels with local newspapers, it should be a win-win situation. Finally bridging the divide between news-on-paper and TV news that opened in the 70's.

[Chris Mack]

I am reminded how behind the times our newspapers (and especially the Star) are daily. They really don't know how to use the Internet to tell stories more effectively.

Case in point: The Star runs articles with *fewer* photos than the print edition, when the media enables them to run many more. Without the physical restraints of a paper edition, every article could run with multiple photos. Instead they occasionally force us to click on a "gallery" to view a series of photos that the7y have decided is worthwhile.

[RWS]

I am a 66-year-old retired journalist living with my spouse, a retired teacher. We have time to read. Next door is a couple in their 40s with three elementary school children and three hunting dogs.They are run off their feet. Why would we want to read the same 32-page newspaper? Maybe a solution for the industry woes is to stop thinking about one mass audience and think of the reader as an individual. Offer a choice of versions of the daily newspaper. Let me subscribe to a five or six section paper, my neighbor to the basic four section. More here: http://newsgadget.blogspot.com/2009/09/addressing-newspaper-business-failure.html

[David Olive]

Hi Buzz: I love news in almost every form. Interesting how Metro & Co. improved so quickly - design, content, editing, story selection. I JP has it exactly right that readers still fall back on traditional media to "verify" the story. Until recent years, a story hadn't happened for me till I read it in the Globe. Not that distrusted the radio or whatever, I just liked the depth, context and accompanying articles with which the Globe presented the story. Wiki Media is, of course, supposed to be the raison d'etre of traditional papers. As their newsholes shrink, they're not able to do that as well. I guess that's part of my argument for a smaller paper that only does news in-depth - basically a pure Wiki Media product.
JP if anything is charitable in describing the news cycle, which, so far as papers are concerned, runs even slower possibly than he describes, and newsmagazines I won't even discuss. Again, I think that's why there might be a market for a "daily magazine" that gives the whole, rounded story - complete with opposing points of view - along the lines buzz is describing. Yes, the new smaller paper will be just as late getting to readers as the current one. I'd try to get past that with a richer reading experience. I'm happy to wait a week for the New Yorker. As for Internet penetration rates, I'm likely way out of date. Seems to me it was about two years ago I came across a table of global penetration rates and was stunned to see Canada - traditionally a pioneer in telecommunications - was a laggard in Internet. So's the U.S., and I think that's why both Harper and Obama have talked about more robust broadband pipes and a network that sprawls more effectively into remote regions. Gosh, I not talking anything like only 60% penetration, more like 78% or something. It does surprise me the number of CEOs of a certain age (60s) who have a PC on their desk but never use it, are almost proud not to know their way around a keyboard. But as far as age goes, the vast majority of our million-plus online readers are north of 30, and probably in the 30-70 range. You mention Facebook, and I think of it as the adult version of MySpace. I have uncles 10 years into retirement who do their daytrading by computer. So chasing after youth, which all media occasionally decide they must do, is folly.
Thanks MJ: I will look into how we can make QR codes work for us. And for our advertisers. I think you and RWS make an important point about what I suppose could be called "micropapers" that reach highly targeted audiences.
More to RWS's point, we actually have - as you'd know for your own experience in the business - given thought for at least two decades on how to customize our product. Magazines as far back as the 1970s were doing this with "split-runs," so that readers in Calgary were getting a special section no one else saw. Usually these experiments haven't worked out so well, or we'd be doing more of them. I guess my problem with you and your neighbour is what happens when your neighbour hears about a story in a section of the paper to which he doesn't subscribe. Then he comes knocking on your door, hoping you've saved that copy from four days ago with that story about Bugatti's centennary. (He has opted not to get our Wheels section.) I guess that's fine. The way I'm trying to think, and it could be all wrong, is how do we serve the news/content requirements of most folks in the GTA?
Which gets me to Chris's point, that with the infinite space of the Internet, we have no excuse not to be providing a more full, comprehensive account of an event. Since radio, maybe telegraph, we've always lost on time. But we can still win on giving you the most satisfying "explanatory" account, as long as we write well enough not have you dozing off in the third paragraph.
I share your point, Chris, about the rather odd way we go about photos on the web. I was just looking at a fluff piece we ran on cake-decorating mistakes (I have a friend...), and instead of just showing the eight photos, I had to wait for a slide show to gear up. Why not just run the shots and I'll scroll down? This is where I, at least, love exploiting a blog. When Pontiac was killed, I ran a dozen or so shots on the blog, comparing today's boring Grand Prix with what the thing looked like in the 1960s when people still bought them. You could see from the side-by-side comparison how the decline in design alone was killing GM.
I'm going to sign off with RWS's challenge on how to be useful to that busy family next door. Certainly we have the technology already to offer a customized electronic newspaper - just the three sections you're interested in paying for. I'll have to think about the possibilities of doing that in print.
Many thanks for everyone's compelling input.
Cheers, David

[RWS]

Show me the money. A Canadian newspaper study 30+ years ago dissected newspaper revenues and concluded that for every $1 the subscriber paid $3 came from the advertiser. The “newspaper of the future” should include a business plan that spells out where the revenues will come from. The formula may have dwindled but my guess is the advertiser still is paying more than half of production costs. There are two factors to the decline of newspaper revenues. One is the shrinking number of subscribers, the other is the diving revenue from advertisers. A plan to build the “new” newspaper around subscribers paying more costs lets the other – the big guy who pays three times more -- slink out the back door without trying to stop him.
Newspaper circulation is never going to return to the saturation point of households in the coverage area. The industry is in transition and coming to grips with the Internet. Eventually someone has to pay for newsgathering but right now no one knows the successful format. Meanwhile printed news readership will decline but it won’t go to zero. The challenge to the newspaper industry in the interim is to find a model which pleases reader and advertiser. I suggested a customized newspaper. It has many of the elements of the model proposed in this forum. Giving the subscriber the choice of content enables charging greater fees from those who choose the value-enhanced paper. The fees they pay can cover cost or more, market willing. But, differing from the proposed model, it also opens advertising opportunity. Having readers choose the version of the paper they want creates subscriber profiles which opens the opportunity for advertisers to find their narrow target markets. Right now, print advertisers have no where near the tools Google provides in honing in on target customers. Creating individual subscriber profiles can offer alternative strategies for both editorial production and advertisers. And get more money from both subscriber and advertiser.
Can publishers customize their publications to individual needs, a different package to each household if needed? Past experiments with split-runs, which were unsuccessful, have been cited. Agreed, but that wasn’t that back in the days when some people had CB radios in their cars. Today we have cell phones. What don’t we have in technology to print customized newspaper packages, put an address label on the front page and deliver to your house?

[Print Advertising]

I think that the print advertising model will need to evolve to incorporate performance-based options for certain advertisers. Our company - http://www.mediabids.com - has found that large, national advertisers are willing to give print a try if they are able to pay for it based on performance. And print drives significant leads and sales to these companies - often outperforming other mediums. Many of these advertisers had only used online, and were used to using a CPC, CPL or CPA model. Publications have been willing to place these ads in lieu of running house ads, or if an advertiser backs out at the last minute. The system is not perfect, by far, but in listening to advertiser demand - incorporating a performance based payment model may bring online advertisers back to print.