Sunday, December 14, 2008
Newspapers: "Black and white and totally over?"
Chris Davis Explains it All
Posted by Chris Davis on Sun, Dec 14, 2008 at 4:00 AM
He began with a salty anecdote and an apology. The media consultant and 50-year veteran of Memphis' advertising scene shared a backhanded compliment once bestowed upon him by a business associate: "Malmo," said associate allegedly barked, "If I ever order a car-load of S.O.B.s and it arrives with only you inside, I won't feel cheated."
The man whose business column ran for 11 years in The Commercial Appeal had some tough love for his former publisher. He mocked the full pages the CA devotes to reader-supplied photos of "ribbon cuttings." And he promised to delver a formula that could rescue newspapers from going the way of the telegraph.
"If I offend anybody, it's not personal," Malmo growled. "It's just my nature."
And offend Malmo did. ABC-24 News anchor Cameron Harper stood up to protest what he felt to be a negative stereotyping of TV news. He was dismissed by Malmo, who said Harper's profession was too busy chasing "flashing blue lights and yellow tape" to do any real reporting.
Malmo's speech was timely. News is big news at the moment. The CA's parent company, E.H. Scripps, is trying to sell the Rocky Mountain News. Industry wide layoffs and the Tribune Company's bankruptcy are making national headlines. The Daily Show's Jon Stewart may have said it best when he riddled, "What's black and white and completely over?"
For all its timeliness, Malmo's message was anything but up-to-date. His criticisms of Internet content, especially sharing and networking sites like Digg, were reminiscent of Steve Allen back in the 1950s, calling rock and roll a fad and Elvis a talentless flash in the pan.
"I went to Digg I saw the top story was, 'Awesome Old Lady Goes Berserk,'" Malmo said, with an eye roll, as though that was somehow relevant to the fact that the way people access information has changed forever.
Malmo went on to grumble about "the bloggers" -- those perennial straw-men and women of the Internet -- generalizing in a fashion once reserved for ethnic stereotypes. "There are no reporters on the internet," Malmo declared, which must have come as a surprise to Harper, a sometimes blogger, and to other reporters and media professionals in the room who produce credible, Internet-only content.
Like a Baptist preacher talking Bible, Malmo held forth on the superiority of serif fonts and wrinkled his nose at the very idea of all those wimpy, hard-to-read sans serif fonts that are used by the Internet. And that's where everything else the venerable expert said stopped making sense.
So what was Malmo's plan to save the daily newspaper business? He outlined three basic steps: First, he said that regional papers should get out of the national news business and focus on own backyards. Second, papers should invest in good human resources who can provide comprehensive local coverage and, more importantly, expertise. And finally, raise the price of papers and subscriptions -- "double the price," if necessary. Malmo's stated goal was not to saturate the market, as papers have tried to do in the past, but to capture only that share of people who are willing to pay more for a quality product.
I believe Malmo's basic assumption is correct: Even in a sour economy, people are willing to spend a little extra money on a quality product. While retail sales falter and newspapers across the country bleed subscribers, i-Phones are selling briskly this holiday season. That should be an unmistakable signal to anybody reasonably well-versed in market trends: people want to get their old media in new, more convenient ways.
All nostalgia and tactile pleasures aside, daily papers now appear on telephones, and being a media guy, Malmo certainly knows this. The digital and cellular revolutions have already happened, and as content providers, newspapers have adjusted far better than their reputation suggests. Online, they now function as television stations, documentary film producers, blogs, vlogs, and repositories for traditional newspaper reporting. Many news sites, most notably The New York Times, even use -- yes, Mr. Malmo -- a serif font.
Best of all, digital newspaper news arrives several times a day, is never soggy, and anybody can get it anywhere in the world without delay.
Newspapers are ready to get out of the tree-killing business and consumers seem to be loving all the new things their phones and mobile devices can do. Of course, the big rub is that the revenue model hasn't made the jump to hyperspace, though online revenue is growing. In fact, the CA's smallish "online only" sector is the only slice of the paper's financial pie to show growth in the last tough quarter. But everything else is withering.
Malmo ended his self-described sermon, appropriately enough, with an altar call. He asked everybody in the audience to go out in the world and do their part to save the daily newspaper. "Subscribe to The Commercial Appeal," he implored, stressing his firm belief that as the inked word goes, so goes America. "Tell your friends," he requested.
Sadly, a few hundred new subscribers aren't going to do anything to save the CA, which recently ceased home delivery to nearly 10,000 households in what have been traditional territories for 100-years because it cost more to create and ship the product than the company could recoup.
"If I had to pick one reason why our democracy has survived, it would not be geography or ethnic diversity or capitalism or talented leadership," Malmo said. "It's impossible," he said, to imagine what will become of our democracy when newspapers aren't there to use their resources, "to protect us from our government."
Props to John Malmo. Newspapers need all the cheerleaders they can find these days. So do other legacy content providers, as witnessed by the surprising layoff of brand-name anchor Donna Davis and 14 of her co-workers at local news powerhouse WMC-TV this past week. There can be no doubt that it's time for tough talk and tougher decision-making.
That all starts with letting go of the fable that there will be less available information because wire service and picture-padded daily papers may soon only deliver a physical product three times a week instead of seven. There will simply be fewer opportunities for broadsheet advertising.
Daily newspapers took massive revenue hits when eBay and free online classifieds made that kind of newspaper advertising obsolete in print. Malmo quoted figures indicating that the amount of time Americans spend reading newspapers has slipped from 18 minutes a day to 13. He attributed this to there being less news to read. But that's a bad metric and a bad example. Chirographic forms of communication are actually surging rather than fading, thanks to text messaging, email, social networking sites, and the simple fact that more and more people are reading newspaper content online. If anything, that's the positive newspapers and their supporters should be cheering instead of constantly accentuating the negative.
Perhaps it's time to call the newspaper crisis what it really is: an advertising-sales crisis. And if "Double the price" is the best sales pitch a lion of the persuasion industry like John Malmo can come up with, then there are indeed more difficult days ahead.
--Chris Davis
Comments (14)
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I like John Malmo. In fact, I agreed with much of what he said about how to save newspapers, until he got to the part about doubling the price. As you point out, that’s not the answer. Malmo’s thinking was too stereotypically based on his print roots and an old business model. He seems to believe that the only real journalism comes from newspaper reporters and is tossed in your driveway every morning, neither of which is true. Some excellent reporting comes from TV news, which he dismissed, but could not dispute. That’s ok. Newspaper and TV people have always had that argument. The problem is the argument is irrelevant. Newspaper reporters are doing TV these days and TV reporters are doing print, at least the online kind. We’re all competing in the same space. The quality of the journalism is more often related to the integrity and talent of the individuals producing it, instead of the institution behind it. I read Chris Davis because I like the writing and the thinking, not necessarily because it’s in the Memphis Flyer. Malmo got it right when he said people want and will find quality. However, fewer of them care about the physical form in which it arrives. We haven’t been the gatekeepers of information for sometime. Trying to force our viewers and readers to conform to our old way of doing things is one of the main reasons we’re in this mess. Cameron Harper
C, I think that's about the size of it. How do laws regarding ownership restrictions change when TV is digital, Newspapers are also small TV stations and TV stations publish at every level? The identity crisis is going to get worse as we fall deeper into the media melting pot: "Remember, CA-TV is Newspaper TV not TV-TV. So it's better TV!"
Great article Chris. Two things---isn't Mr. Malmo, like, a hundred years old or something? He honestly thinks people should pay MORE for the CA and subscriptions to get it? He's nuts. The CA is over, people. The internet was a factor, but the main thing that did in the CA was the CA. I would pay more for a lot of newspapers, but the CA is not one of them. Quality went out the door over on Union Ave. a long time ago. Freeze dried left over news, smudged photos, pathetic content, and ads, ads and nothing but ads is what is horrible about the CA. "Commercial" Appeal. The name alone tells you everything you need to know about its priorities.
Rantboy, I agree the CA's content is a mashup of good, bad, and irrelevant, but to say "ads, ads, and nothing but ads" is about as far from the truth as you can get. If they had ads, they wouldn't be going down the tubes.
Funny hahaha. I said it once, this is a dead horse subject. CA is done like Thanks Giving Dinner.
Chris, Regulation is an interesting question. Internet reporting is, in some cases, already more powerful and threatening to the political status quo than the old radio/tv/newspaper combos ever were. Now, regardidng good TV...
All of the commentary over the past 15 years about the internet’s impact on newspapers looks at how newspaper circulation is declining and how people are getting news and information online. Analysts diagnose those trends as terminal symptoms for printed newspapers. That commentary all but ignores the most important consumer of newspaper services — the local merchant — the retailer or service provider who needs to tell the folks at home what he has to offer. Ask anyone in any marketing business and he or she will tell you that good advertising in a good newspaper works great. If newspapers put as much time, talent and money into gathering information, boosting circulation and selling advertising as they have into going digital, they’d be handing out bonuses instead of pink slips. The point of providing unique information is to create an audience for local businesses that will buy space in the ne Perhaps the costs of printing and delivering information on paper will make a printed newspaper obsolete some day. That will not happen, however, until a cheap device emerges that has the invited, intrusive characteristics of a printed newspaper. Invited intrusion gives newspaper advertising its power. People pay to have a newspaper delivered to their homes. Most advertising assaults consumers. Consumers, in turn, defend themselves. They flick the recall button on the remote control they hold constantly. They poke a button on the radio. They click on that x in the corner of the pop-up ad. Newspaper advertising doesn’t push itself at people. People invite newspapers into their lives. They know that advertising is in there. They pay for it! The advertising is one of the main reasons people buy newspapers. Local business people know good advertising in a good newspaper works because they’ve experienced it. They use newspaper advertising to reach their full potential. Newspapers provide a critical service in the local marketplace. All of the analysis about the future of newspapers has got to stop this one-dimensional focus on newspapers as serving only readers. Providing a community with complete, accurate and fair reporting of events is a fine and noble mission, but it’s not a newspaper’s only reason for being. Online advertising still has that new-car smell. As soon at the scent fades, local merchants will accept that online advertising doesn’t sell their goods as well as ads in the newspaper. People do not invite online advertising into their lives. For many it’s a bother, just like junk mail and ads on TV and radio. Newspapers should develop good websites. Some people will never read a newspaper, but they might look at a website. A newspaper’s website broadens its audience for advertisers. And there is money to be made online. But newspapers should not forsake print for pixels. If a good newspaper in a good market dies, the cause will be suicide, not death by Google or craigslist. And with that death, an opportunity will be born for somebody who understands that there is no better way for a local business to advertise than in the local newspaper.
I don't know many people who buy the newspaper for the ads. They buy the Sunday paper for the coupons, because the value of the coupons is greater than the cost of the paper. And a general complaint about the CA is that they have way too many ads.
What's killing newspapers is the profit margin. The demand for high profits forces papers to cut back on reporting and delivery and other services, which leads to other people asking themselves why they're paying good money for a dwindling product, which means less ROA for advertisers, which means fewer ad dollars, which means less profits, more layoffs and the circle goes unbroken until the newspaper is dead.
But it all begins with unreasonable demand for profits. It all goes back to greed, and to corporate ownership and decisions being made with Wall Street in mind, rather than Main Street. I can't believe I just wrote that. Newspapers as we know them will survive, but only after the big papers die or are sold off and broken up. When local owners with local interests and reasonable demands for profit take over, then you'll see newspapers start to recover.
Then, of course, Wall Street will come to town and start throwing around bucks to buy these "successful" newspapers, which will doom them all over again. The circle remains unbroken.
I presume this is the same John Malmo who recently advocated a technique of writing emails that involved first shouting at your computer?
Jeff, I believe you're on to something; I think the historical profit margins on daily newspapers are quite high, maybe in the 20+% range. In their quest to keep those margins that high, they're destroying the product through overly agressive cost cutting. If they would accept leaner profit margins, perhaps in the 8% range (of course, that would mean the value of their franchises would be halved, at least) they could possibly have a sustainable model. Anyone who knows more about the business side want to shoot holes in that? I don't claim to be an expert.
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