A Wall Street analyst recently asked a top newspaper executive if it is feasible to reduce the size and expense of newspaper newsrooms. The executive responded that such cuts would probably be the wrong course of action. Good answer.
If anything, newspapers need to get better. Cutting the newsroom - (and advertising department) budgets would only hasten decline. Somebody still has to gather the news, write it up and disseminate it - via newsprint, the Internet, over the airwaves or on cable. Whoever does this best is going to attract and retain readers and advertisers - so long as newspapers have a good Internet strategy.
The nation's second and third largest newspaper groups - Knight Ridder and Tribune Co. - have been sold within the last year because of pressure from unhappy stockholders. These sales have sent shockwaves through the newspaper industry as executives look for solutions to keep newspaper franchises healthy.
We need to look seriously at content and control of content. The trends are bad. Newspapers made billions of dollars for over a century by covering local news, while relying on The Associated Press (and UPI) for international, national, sports and state news. Then the AP made its international, national and sports reports available to Internet-only companies - greatly diminishing the value of those AP stories to the newspapers that own the AP. (The AP made a smart move by keeping its state news report out of the hands of the Internet-only companies.)
But the AP's state report and much of the local, regional and state news covered by local newspapers is distributed on the Internet anyway. The Internet search engines send "spiders" through newspaper Web sites and index much of newspapers' content (with the links leading back to the newspapers' own Web sites.) The result is, many people have come to rely on Yahoo! and Google as their sources of local information. MORI Research found that Google and local newspapers are in a virtual tie when respondents were asked to identify their source of local news. Google has no reporters! The value of intellectual property - including newspaper content - should be more closely guarded.
The survival of newspapers will be built on who can best cover local and regional news, and who can best sell potent advertising packages. To maintain - or regain - positions of strength, newspapers need to get better. Newspapers need to catch a case of quality. Most newspapers could use an upgrade in their editorial and advertising staffs.
For too long, newspapers have been lazy. Advertising departments have been filled with order takers. This was fine when the newspaper held a clear monopoly and advertisers understood that the newspaper was their best investment. Now - when there are many more options open to advertisers - newspapers need high-quality sales and marketing specialists to make the newspapers' case. They need advertising sales people who can sell both print and online products. Newspapers likely need to pay more money to attract stronger sales people.
Newsrooms need to be enhanced, too. For too long, news staffs have been trimmed, and senior staffers have been replaced with less-experienced, lower-paid reporters and editors who too often aren't in touch with the lives of a majority of the newspaper's readers. Stringers and content produced by members of the community usually don't improve the quality of content - just the quantity. I think quality is more important than quantity.
Today the mantra for survival is: "Local, local, local." Kick out the stock tables. Reduce the amount of wire copy. Little League coverage is more important than Big League stories. Have 24-by-7 newsrooms with the Internet and print treated equally. Expect the newsroom to produce multi-media content. All good ideas - but not feasible if owners think they can spend less on their newsrooms.
Newspapers clearly have to move to Internet solutions, but as noted investor Warren Buffett said: "The economic potential of a newspaper Internet site - given the many alternative sources of information and entertainment that are free and only a click away - is at best a small fraction of that existing in the past for a print newspaper facing no competition."
Newspapers, in print and online, need to get better. In an era of declining revenue and circulation, it will be difficult for newspaper owners and executives to invest more in their products - but if they want to remain competitive they will have to do so.
