The Secret about the Newspaper Business Model


Well, I keep meaning to get back to blogging about media and Mike Markson’s recent post about the reasons that newspapers are sinking online has given me the kick in the pants I need.  I wish I had written it. I think it captures everything and does it without the usual sentimental hand-wringing about the Fourth Estate.  I will do some hand wringing about journalism in a later post.

I have to say one of the reasons that I have procrastinated over writing a similar truth-telling post is that a lot of the consulting I do is with online companies that have identified newspapers or other traditional media players as the partnerships that will help them gain the scale or sales they need to be successful.

So, if you are in a start-up here’s a few recommendations:

  1. Read Markson’s post and think about it.  It is so true it hurts.
  2. If you want to create a partnership with a newspaper be
    absolutely clear what you want to obtain in the partnership.  If the
    deal starts to move into other unexpected areas WALK AWAY.  Do not do a
    partnership for a press release.
  3. After you have determined what you want to get from the partnership DO NOT BE AFRAID to ask the questions you need to make sure that the benefit will be forthcoming.
  4. DO NOT get sucked into “the common wisdom”  – see Mike #2 and #8 especially.  They may be local brands but not all of their traffic is local, and they don’t create that much uniquely local content.
  5. If you are partnering to leverage the large local sales forces at newspapers, again do your homework.

Who do you want to sell?  Small and Medium sized localbusinesses?  Well just because they are local, doesn’t mean thenewspaper sells to them.  Pick up any major daily and count the numberof ads that are from uniquely local businesses.  Macy’s is not local. Neither is Safeway or Best Buy or Fry’s. If your product is aligned with the sales force’s customers, then be prepared to for some serious training.  See Markson #10.  The sales forces sell everything. They are used to selling without having to be accountable for the ad’s effectiveness.  Training and materials and incentive programs are critical to getting the newspapers sales forces focused on selling your product, explaining its benefits and pricing.

I know this sounds bleak.  But, newspapers do have strong local sales forces.  You just have to be able to mobilize them without jeopardizing the newspaper’s traditional revenue streams (see Markson #10) or creating a sales support structure that weighs your own company down.  As for traffic, one day (maybe) they will sit down with a spreadsheet and unbundle the business.  Create websites that compete in one area and don’t try to be everything to everyone.  When they settle on which of these businesses they want to compete in, then partner up. It could be news, entertainment, sports, ….  Unlikely that they can win in everything.

So, that may be the end to my little bit of advisory work.  But, it is best that companies looking for ways to tap into the world of traditional media, work from a position of facts.

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