Bleak news for the newspaper industry continued this week. Yesterday, the New York Times continued a six-year trend by announcing over more than 100 cuts to its newsroom force and has put a buyout offer on the table for its employees to leave the company. Today, the Jeff Bezos owned Washington Post opened their doors to a second day of picketing. Employees continue to protest the recent announcement that the company is moving forward with its intent to cut medical and pension plans. The Wall Street Journal and USA Today have announced similar job cuts in the last few months as well. These are not publishing startups laying off a few hundred recent college grads with minimal work experience, but rather the finest journalistic brands in the world, laying off some of the best and brightest that journalism has to offer. What does this tell us? In very clear terms, it tells us that these publishing giants have yet to figure out the basic economics of a few hundred words on a web page.
When the New York Times followed the lead of the Wall Street Journal and announced it was putting its content behind a pay-wall in 2011, thus requiring readers to pay for a monthly subscription, it lost a fair share of its readership. This was no surprise. The byproduct of all this was their web traffic contracted, ad revenue sank and business models became unclear and therefore unsustainable. No surprise here either. (Full disclosure, I love subscription businesses, but companies must make sure that their customers are deriving enough value to justify the monthly charge. The WSJ subscription revenue likely benefits from Wall Street expense accounts and this is probably an exception. For the New York Times and the Washington Post, they do not have the same customer/reader profile and as a result should not be replicating their business model.) The problem thus becomes little to no subscriber growth and of course level to declining ad revenue. These problems will without question, continue to plague an industry that is already in a lot of trouble.
Here a few ideas to get these iconic publishers back to “neutral” and perhaps even into “drive” with their businesses. Below is what I would advise them to do:
- Take back the Twitter handles. Stop being the writer springboard; mandate that your writers use publisher affiliated Twitter handles! See Ezra Klein, Nate Silver etc… From the get go, their Twitter handles should have been “WaPo_Klein” and “NYT_Silver”. Journalists won’t like it, but they need you to succeed. Today they build their followings and celebrity on Twitter, thanks to your platform, then leave with them!
- Let subscribers choose a customized plan. I only read sports and politics. That’s it. The reason I don’t pay for the NY Times is because I don’t care about the other 90% of their content. I should have a custom plan that allows me only those categories at a discount (hey, talk about figuring out the economics of your business, see exactly what readers want to pay for). Readers care more about the content they consume rather than the device or vehicle in which they consume it.
- The more I read, the less I pay. Hey, how about rewarding those who actually subscribe and read? Those are your best customers. They are the ones interacting with your brand daily and generating page views and ad impressions, so why not incentivize them to do more of it to reduce their monthly subscription fee. More reading equals more ad inventory, which in turn equals more ad revenue (not to mention more brand affinity).
- Invest in journalism. The more that publisher’s cutback their staff, the more the quality of the journalism gets degraded. We don’t need more news (Twitter and CNN have that covered), but we do need more thought and investigation. Yes, the BALCO story may have never happened in today’s digital world, but it changed baseball and sports forever. Same with Watergate for politics. Those stories among thousands of others are why journalists become journalists: to seek truth and tell the story along the way. We need more of it, so invest in it. Publisher cutbacks have spawned some great startups (Vox, OZY, Grantland, and hundreds more) that are being really smart about acquiring readers.
The biggest risk of all is not taking one…or four. Right?
Post written by Lee Fentress
Lee Fentress is a Co-Founder of Santa Monica based Invent Ventures and an Advisor to REVENUE.com, a pioneering native advertising technology. Lee has worked at Sports Illustrated, where he helped launch SI.com, AOL, CBS Television and the White House. Lee is currently the COO of Pledgeling, a stealth technology in the charitable giving space.