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Aug. 10, 2016, 9:49 a.m.
Business Models

Newsonomics: After John Oliver, the you-get-what-you-pay-for imperative has never been clearer

“It’s not experimentation that is most needed. It’s execution, and execution based on the value of smarter, rather than dumbed-down, local journalism.”

Can John Oliver’s 19 minutes rivet attention as all the bolts and screws continue to come undone in the local news business?

That seems a hope against hope — and yet 3.7 million YouTube views of his Sunday evening HBO program say something. Oliver offered no new revelations, but he connected the dots as he has so expertly done week after week on Last Week Tonight since its April 2014 debut. It seems to be Tronc — the ridiculous renaming of a once meaningful Tribune brand and the company’s unintentionally self-parodying promotional videos — that sent Oliver and his merry band of writers into action. They depicted the local press landscape as an increasingly barren one.

Michael Ferro’s Tronc (X or M), of course, is only a logical progression in a local news(paper) business that has long lost its way. There are of course numerous remaining (if awfully quiet) credible publishers, but they’ve been joined in the trade by so many crude cost-cutters, charlatans, and cowardly executives. They damage the search for a real turnaround strategy.

The wider public shouldn’t need the anti-bullshit brigades parented by Jon Stewart to connect the dots of press decline, but apparently it does. John Oliver and Samantha Bee have not only emerged as leading voices in the culture — I believe they’ve emboldened journalists, from The New York Times’ Trump-checking teams to CNN’s Brian Stelter, whose incisive work is now getting the wider recognition it deserves (and whose “Fox-sent-me-on-a-date-with-a-spy” tale is now opening eyes to the resemblance between the Roger Ailes scandal and Hackgate, the major U.K. newspaper scandal Rupert Murdoch has almost buried amid concerns about his outdated management style).

As Oliver tours the ravaged newspaper landscape — from Portland’s Oregonian to the Sheldon Adelson-seized Las Vegas Review-Journal to the easy pickings of Tronc to how much TV still rips and reads local newspaper news — those of us too close to the business can newly see how far the business has fallen just this year.

Amid it all, let’s for the moment just focus on Oliver’s simple conclusion:

A big part of the blame for this industry’s decline is on us and our unwillingness to pay for the work journalists produce. We’ve just grown accustomed to getting our news for free. And the longer that we get something for free, the less willing we are to pay for it. And I’m talking to you, watching this segment on YouTube, using the Wi-Fi from the coffee shop under your apartment. You’re killing us. Sooner than later, we’re going to have pay for journalism, or we are all going to pay for it. Because if we don’t, not only will malfeasance will run amok, but the journalism movies of the future are going to look a lot more like this.

At that point, Oliver introduces Stoplight, a hilarious four-minute Spotlight parody, one that may still not seem funny enough to those in increasingly tronckified newsrooms.

That’s simple, but it’s not simplistic.

In fact, it may take a comedian to emphasize the point that is right in front of us: The decades-long subsidy of high-priced print advertising is all but over. It is now readers who must pay to keep informed. This isn’t a new notion at all — it’s one that has most eagerly seized by national and global newspaper companies, like The New York Times and the Financial Times.

All have crossed over — they receive more than half of their revenue from us, the readers. Reader revenue is helping each of them build a sustainable digital future. None is there yet, but they’re far closer to getting there than the local press, where readers pay only about 30 percent of the expenses.

Oliver focused, properly, on local newspapers. That’s all but four of the U.S.’s 1,350 or so dailies. Across an expanse of 3,000 miles, that’s where most of us used to get our news, and that’s where we’ve seen half of the newsroom workforce sent packing, including many of the most experienced journalists. Why haven’t America’s local newspapers crossed over like the Times?

That’s the logical question that pops out of Oliver’s rant.

“There is going to be a lot of experimentation and evaluation of new business models,” wrote Newspaper Association of America CEO David Chavern, in his criticism of Oliver. In fact, the newspaper industry has been saying this now for almost two decades, with Chavern, new to the industry as of a year ago, to be excused for his take. It’s not experimentation that is most needed. It’s execution, and execution based on the value of smarter, rather than dumbed-down, local journalism.

In fact, most regional publishers — the few independent publishers I’ve highlighted over the years offer the primary exceptions — have failed to apply what the Times and FT have learned. It’s true that the Times is national, and now global. Consequently, it can draw upon a large universe of potential digital subscribers. That scale, though, isn’t the only answer of why reader revenue works so well for some companies but not for the vast majority. In fact, my research shows that the Times and FT convert their audiences to paying customers at a rate of about five times better than do regional papers. So it’s not just size of audience — it’s also what you do for the audience.

Chalk up two reasons for the the Times and FT success. Both provide more value to their readers — and both are smarter about how they charge. They haven’t simply erected a paywall and put most of their content behind it. Most essentially, both still publish enough daily original reporting to maintain daily habits for subscribers. That’s the journalism that should be at the root of the journalism business. Both publications have seen cutbacks, but both maintain robust, experienced, and increasingly innovative newsrooms.

Compare that to the ungodly decline in numbers, knowledge, and know-how in so many regional newsrooms across the country. For most daily publishers, the business logic is counterintuitive — cut the news staff in half and charge twice as much for the remaining output — and consumers have responded understandably by walking away.

Further, both the Times and FT think about product. The newspaper was the “product,” though we never thought of it as one because it was so singular and so long-lasting. Our digital world, though, both offers the opportunity (and the demand) to think “product” when screen sizes, video storytelling, and social sharing open new horizons.

In March, I highlighted the Times’ smartphone product — I believed it finally offered a copyable future for the press. My almost-eternal optimism has been dinged a bit since; I’ve seen practically no borrowing of the many good ideas the Times presents every day. How could that be? In a world so desperate for new funding — for reader revenue — how can an industry shrug its shoulders at such a compelling model of mobile engagement and proven subscription payoff?

It’s not just content and its presentation that form the building blocks of the majority-reader-revenue era we need to enter. Paywall technology providers tell me they are puzzled by how slowly publishers have been to test new niche payment schemes, potential new products, and personalization. It is an industry focused on milking short-term profits at the expense of long-term business success — and civic service.

At home and in my travels, I talk with so many former local daily newspaper readers. They have lost a habit, as their print products became shadows of themselves, and as digital products just seem to offer a bunch of headlines, not a new news experience. We can count on a few hands the number of news publishers both seeing the potential of and investing in their news products. John Oliver may exhort his viewers to become paying local news(paper) readers, but unless we see new investment and new vision, his plea will have little chance of succeeding.

The truth is too many Americans now suffer — after years of local news diminution — a loss in local news muscle memory. That’s not going to be easy to rebuild. In fact, I think it requires a new bargain. Publishers willing to invest in their communities and news companies need to provide more and ask readers to pay more. I believe they will, if the bargain is fair, real, and well executed. In truth, that may be too many ifs, but I think it’s possible. Maybe even John Oliver could lend his face and his name to such a new news deal.

Photo by Eric Liebowitz/HBO.

POSTED     Aug. 10, 2016, 9:49 a.m.
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