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April 16, 2015, 9 a.m.
Business Models

Newsonomics: Are local newspapers the taxi cabs of the Uber age?

Local newspapers still act as if they’re monopolies — despite all the new players eating away at their audiences’ attention. Is there room to adapt?

Traveling recently, I found myself needing transport from an offsite car rental facility near Portland’s airport. I called a recommended local taxi company and asked if it could pick me up there and take me downtown? “Yes,” came the answer.

“How long?”

“Soon as we can get there,” came the less-than-helpful reply.

I’d have used Uber, but the city of Portland wrestles with the usual taxi/Uber issues, some real, some laughable and all rendered largely irrelevant by the creative destruction of digital efficiency. Soon, new Uber frontman David Plouffe will go mano a mano with Mayor Charlie Hales at a TechFestNW (“A Frank Conversation About Innovation and Growth Across The Sharing Economy”), as Oregon’s biggest city rereleases Uber onto the streets.

Using Uber last month at Austin’s hyper-kinetic and taxi-impaired SXSW conference had spoiled me. Twenty minutes separated my hotel from the action. Taxis? If you got through to a switchboard, operators offered a three-to-five-hour time frame for pickup. With Uber, so long as I deftly maneuvered around surge pricing, I could spot, Pac-Man–like, the potential convenient pickups on my iPhone.

All the info I needed sat on the phone, making payment known and easy. The cars were in better shape; the seat belts even worked. The drivers, two of whom had joined Uber five days earlier just in time for SXSW, offered more engaging conversation than taxi drivers usually do.

If you’ve used these services, you’ve probably experienced the small aha moment when you realize how getting from here to there has been made relatively easier. Then you may wonder: How could Uber make so easy what taxis have made too hard?

Then, given my near-pathological interest in the future of the news business, it got me thinking. Weren’t too many local news companies the taxi operators of news? They still talked (as I’ve heard in recent discussions on the buying and selling of newspaper properties) about “owning” a territory — despite the competition building around them. They still act largely with a monopoly mindset. Their points of consumer access haven’t kept up with what other companies now achieve. They still offer way too many hurdles to finding out news and information. They still make it harder to buy advertising than they should.

To be fair, thinking of newspapers as the taxicabs of the Uber age might be too simplistic. Certainly, Uber’s purpose is ridiculously simple: Get me from one place to another. Uber reduces much of the friction involved in that movement — the frictions of anxiety, waiting, payment and safety. We digital humans love friction reduction, in everything from voicemail retrieval to bill pay to buying tickets online. As soon as we saw Uber (and Lyft) reduce hassle and simplify our lives, we adopted it. Of course, the ride-sharing companies have had to do a lot of complex, behind-the-scenes heavy lifting to create such consumer simplicity, including fair-enough deals and incentives for drivers. It’s impressive tech, of course, but more importantly, it’s a relentless focus on what a consumer wants.

It’s that consumer obsession — or the lack of it — that makes too many local newspaper companies the taxi operators in this metaphor. As taxi companies have overvalued their medallions (now asking for bailouts, as digital disruption has destroyed value that wasn’t really there), the largely monopoly local daily press believed their brands demanded respect in the new era as much as in the old one. Need a ride? Call a cab. Need the news? Read the paper.

Did we expect to see Uber emerge out of nowhere six years ago? No — but as soon as we saw it, we knew what to do with it. Do we see Uber-like news alternatives emerging today? Hardly. We can argue that sites like Billy Penn (“What Are They Thinking: Jim Brady’s Mobile Millennial Philadelphia Local News Adventure”) break some new ground there, but there are so few local news startups trying to do things differently.

Mostly, though, it’s the national/global format experimentation — from Vox to Circa to Daily Beast to AJ+ to BuzzFeed and more — that plays with the ideas of news friction reduction. The whole explainer and how-and-why pushes — anticipating readers’ questions about the news and answering them directly — offer one spoke on the news friction reduction wheel.

In the local sphere, it’s in “information” that we can see the profound inroads into former newspaper territory by Uber-like competitors. For 20 years, Angie’s List has been providing service about services. For 10 years, Yelp has helped us find chiropractors, mechanics, decorators, and hot spots. For 17 years, OpenTable has taken the wait times out of making restaurant reservations. For 15 years, StubHub has steadily perfected itself, though it still works on reducing friction. Check the first screen of your smartphone and see all the life-easing local services that crowd out news apps.

Just recently, we see a new round of friction reduction around local information, as Amazon and Google make large investments in the home services industry.

Ironically, local newspaper companies once served as those great marketplaces of news, information, and services. Find local contractors? Decide where to eat out on Saturday? Figure out where to buy tickets? The newspaper — through its classifieds, service directories, display ads, editorial listings, and more — offered analog pathways to doing stuff in our communities.

Somehow, in this ungainly digital transition, newspaper companies mostly bungled away their advantages, opening themselves up to nibbling competition, first for audience and then for the revenue that inevitably follows it. Sure, some companies tried to connect with or partner with these services, but meaningful results are hard to find. The conventional wisdom is that all of this transactional business is now in someone else’s domain. The truth: Newspapers were never only about the hard news that consumes the home pages of newspaper sites and mobile fronts. They did so much for readers that they commanded (and deserved) that 20 minutes of engagement time daily.

So what’s to be done now? Is it too late? Let’s divide our thinking here into those two areas: news and information.

Information — connected, actionable information — is the kind of thing that StubHub, OpenTable, Angie’s List, and Yelp (among numerous others) have done so well. Recreating them makes little sense.

The answer may lie in a kind of curation — not news curation, but community information curation. Could the next generation of local news companies — whoever owns them — recreate themselves as centers of information? What would that look like? Our most important question there: What is it that local consumers now want that don’t get, or that they could get better? (Schibsted, in its native Nordics, is a leader in answering these questions.)

News is an open frontier. We hear the marketplace opining that there isn’t much money to be made in creating local digital news; almost all the now $500 million in digital news money investment is national or global oriented. For those willing to apply Uber-like thinking to local news, that’s great — it’s wide open territory, with little competition. If I were a local publisher or editor or journalist or marketer, I’d start with this chart below, acknowledging some of the ways that local newspaper companies act indeed too much like taxi companies.

How local newspapers are too much like taxi cabs in the Uber age
Taxi Newspaper site
Mobile access Low-level Low-level
Time Payment, receipting, time-consuming, credit card transactions hit & miss List-like navigation; too few avenues to easy-to-find info; little connection between reading and shopping
Work Finding a phone number, getting put on perma-hold Navigation is newspaper-like, not reader-oriented; too few connections to city services, “things to do”
Memory Receipt provides little/no info No trail of stories, “my stories”; poor related or contextual archived stories
Branding No national taxi company; who to call when in a new city? No national access point for local newspaper news and information
Price Unpredictable; can be taken for a ride; often too high. If paywalled, price/value proposition for consumers is underwhelming

Talk it through, poke holes in it, add to it. Then add a third column and see what Uber-like friction-reduction therapy you can apply. Ask questions like these:

  • What kind of friction do your local (would-be) readers want removed from their experience?
  • How can you radically simplify and yet delight with the depth that only a local newsroom can offer?
  • What can you borrow from the national innovators?

In the stirrings of new local media — from new venture capital entering to solid investment in Boston and Washington D.C. to the local-forward ideas emerging out of this week’s NAB TV conference in Las Vegas — there’s a new thirst for innovation. In this sharing economy, perhaps it’s time for local news companies to ride along with, and borrow from, non-news innovation.

Photo by Nick Harris used under a Creative Commons license.

POSTED     April 16, 2015, 9 a.m.
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