A quick summary of the key ideas behind the Daily Information System (DIS) before discussing reactions to last week’s essay:
1) The newspaper as we know it is dead.
2) It survives as one of three information prongs, mobile, Internet and, yes, paper.
3) Off with taboos and sacred cows: periodicity, price and production.
See Monday Note #47 for details
A brilliant individual (name withheld to protect the witness) with broad experience in journalism, business and the Internet offered the most interesting feedback. We share a passionate interest in our times. We ask ourselves: How do we invest the next ten or twenty years of our professional lives in the most rewarding ways? On the DIS, his first question focused on the French media landscape: Which newspaper would I transform into a DIS? A quick scan of the current media properties followed. Libération and Le Monde are just coming out of painful restructuring episodes, with substantial staff buyouts. For Le Monde, assets sales give it temporary oxygen. But for both of them, the tank empties within two years at most. Above all, we agreed, their bosses are way too Internet-averse and too self-absorbed to morph into agents of change. And, as the final touch to the picture, their boards of are in morose capitulation mode. Le Figaro? To sum up: the publisher is 68 (following a twenty years sentence as the exec VP of the biggest European TV network, TF1), the owner is 83 and immensely wealthy (the heir of Dassault aircraft maker dynasty).
— Transform, I retorted? Hell no. Forget the fact there is no patient anyone could operate on. Think of the time and money required for such a fundamental turnaround. I don’t want to transform, I want to build !
— Well then, forget it, said my interlocutor. You’ll have an easier time finding €30m to acquire and (try to) transform a property into a DIS, than getting €20m to build one from scratch. That’s the way things work around here. We managed to agree on one thought: For the French press, the situation has not gotten dire enough to trigger the clarion call to radical change. We’re not yet at the bottom of the J-Curve (see Monday Note #43). Minds and guts remain tuned to quick fixes, socially and politically more manageable — today.
In France, what I call the “Miranda boards” make things worse. They’re like the suspect pinned down on the hood of a police car who hears the zealous officer read him his Miranda rights: French board members “have the right to remain silent“. The Miranda board is merely a rubber-stamp chamber, structured for the ultimate form of French coziness: populated by friends, members of trusted networks, Grandes Écoles or freemasonry. In France, the independent board member is an alien notion. There is no shortage of excellent candidates, of course. But, here, the real function of boards is the preservation of the status quo, not evolution (or revolution). Looking at the boards of major newspapers in France there is no risk of unseemly disturbance. Most are in capitulate to the inevitable mode.
By contrast, the board of the Washington Post Company is a wholly different entity. It includes prominent people such as iconic investor Warren Buffet, Internet mogul Barry Diller, Columbia University Chairman Lee Bollinger or Xerox CEO Anne Mulcahy. A potent mixture of intellectual firepower and business acumen. And the person reporting to this assembly is of an equal caliber. Yes, Katharine Weymouth, 42, is a member of the Graham family that developed the Post; but she stands as the opposite of nepotism “à la Française” (being in a sunny mood, I’ll skip the list of French media properties in the hands of incompetent offspring). As recounted in this great profile in Condé Nast’s Portfolio, Ms. Weymouth served in all sorts of positions inside the Washington Post galaxy, from in-house counsel to head of advertising (staff: 450!). She knows the drill. And she’s up for change: “… It’s going to be cutting costs and developing new products and trying new things—throwing a little more spaghetti against the wall. Some will stick and some won’t. I don’t think there’s a magic bullet that is going to turn our industry around”.
Since boards aren’t likely to push for anything but timid adjustments, who will be the true agents of change? Chances are markets and readers will. Let’s look at recent data. To protect what’s left of our trade and to have any hope of building something sustainable, we have to fight on three fronts:
- First, the audience’s money in absolute terms, i.e. how much can we extract from the reader — directly or indirectly, newsstand price and/or advertising revenue per reader.
- Second, still the audience’s money but in relative terms this time, i.e. our percent share of disposable income versus other items such as entertainment.
- And third, we also compete for the audience’s time. How much of it do we have versus other pursuits such as TV.
A large part of the audience historically faithful to news is now beginning to evaporate. The Pew Research Center surveys news consumption habits in the United States. Recent findings point to a disturbing trend: the shrinking readership of print is far from being compensated by audience gains for online information. In the last two years, the number of people claiming to have “red a newspaper yesterday” dropped from 40% in 2006 to 34% in 2008 (and from 34% to 27% if we specify “print only”). In the meantime the “Web only” readers have doubled indeed, but from a mere 2% in 2006 to 4% in 2008.
Even worse, ten years ago, a quarter of the population below 25 admitted not getting any news at all. Today, this proportion rose to a third of this same segment! The last Pew survey is not exactly swelling with optimism (read the full report here)
At least, the Pew survey confirms the need for diversifying the number of news sources. Especially since “checking the news” as opposed to abiding by the traditional “news appointment” becomes a dominant trend. Hence the rise of the smartphone. Give someone a Blackberry or an iPhone, you just made a news addict: 37% of smartphone owners check the news several times a day; that number is only 4% for regular mobile phone owners. This holds promise for the future of the DIS: today, smartphones penetrate only 15% of the American population (vs. 83% for all cellphones), and the success of the iPhone indisputably shows that the quality of the interface is a boost for online consultation (Google said there are 50 times more mobile searches coming from the iPhone than from any other mobile handset). The affordable smartphone is a recent phenomenon and cell phones are renewed roughly every eighteen months. (Sooner if we believe Steve Jobs.) As a result, we can safely forecast a steep rise for wireless online news.
For the print media, the crisis is a historic one, it calls for radical measures. Today’s symptoms do not reveal yet another economic cycle, down today, back upwards tomorrow. No, we are inside a structural, irreversible change. And the numbers will get worse.
I had many conversations this past week about the DIS. The objective hurdles are many. But everyone agreed: subjective factors are the ones that matter the most, determination and leadership at every level. Resolve is required to strive in a context that, up until now, rewarded fiddling with a known formula rather than taking the risk of a truly different, radically, new at the root one. Easier said than done, I know, but that is how political or economical empires have been won or lost. –FF