Jeff Jarvis on How Bankrupt Newspapers Can Start Over — Before It’s Too Late

Tweet: Here’s what I think bankrupt newspaper companies should be doing.

The AP lists the status of six newspaper companies that have declared bankruptcy: Tribune, Freedom, Philadelphia, Sun-Times, Journal Register, Star-Tribune, representing 66 daily newspapers among them.

Mostly they are using bankruptcy merely to restructure the debt they shouldn’t have gotten themselves into in the first place — the debt that nearly killed them. Often they are leaving in place vestiges of the legacy management that made those bad decisions and did not make the brave strategic moves the digital age demanded. Tragically, none of them has used the great if difficult opportunity bankruptcy gives them to reinvent their businesses and themselves, as I suggest here:

Bankruptcy enables a newspaper company to shed its past. It can get out of contracts and leases for paper, printing plants, delivery, trucks. It can also get out of labor contracts, reducing severance costs. That is terribly painful but I fear it is as inevitable as the end of the ITU (the typesetters’ union). It offers a one-time chance to rethink, reinvent, and rebuild the company for the future. Is it better to stretch out the pain and never get anywhere? And if tough decisions and actions are not made, the likelihood that the company will die and all will be lost only increases.

This is another reason I say that the future of news is entrepreneurial. Given the opportunity of market leadership and 15 years since the introduction of the commercial web and then, failing that given the opportunity of bankruptcy to change, the legacy institutions can’t bring themselves to do it for any of many reasons: It’s too expensive to change and cut back; it’s too painful to corporate valuation and ego built on size over profitability to reduce the scale of the company; it’s too difficult to shift the culture (especially after much of the best talent left with buyouts); the strategic vision just isn’t there. Whatever, the tale is too often told.

Even so, it’s not too late for the legacy institutions. Perhaps foolishly, I refuse to give up on them. If these companies took just one or two papers each among their 66 to experiment with new models, to radically rethink and resize them and to learn instead of demolishing their old institutions brick by brick, they and their still-dying industry would be much better off; they might find a new way.

I consulted on my former employer, Advance’s, project to do that in Ann Arbor, killing the Ann Arbor News and starting a new, blog-based, community-based company and service, AnnArbor.com; the industry should be watching and learning from it. That’s one model, but my no means the only one. Our work at CUNY in new business models for news(funded by the Knight Foundation) presents another vision, also not the only one.

Before it is too late, I’d like to see these companies — especially companies still in or going into bankruptcy — try more models:
* staying in print but splitting up the functions of the company andoutsourcing everything possible;
* investing in a widely distributed network of independent local and interest sites with the company adding value with curation and sales;
* creating a pure ad network;
* creating a very high quality product and — yes — charging a lot for it;
* creating a series of special-interest niche services and, in some cases, publications;
* creating the still mostly free but higher value craigslist with more curation for quality and more services;
* experimenting with new services for local merchants — especially those too small to ever have afforded big, inefficient newspapers — including helping them succeed through Google, Yelp, et al;
* creating citizen sales forces to scale while serving those small merchants;
* what else?

A few days ago, I had a related email discussion with John Paton, head of Impremedia, which rolled up a number of publications to become the largest Spanish-language publisher in the U.S. In the process, the company has made the difficult decisions to shrink by outsourcing and finding efficiencies and focusing and has changed its culture to put digital first. The industry should be watching these efforts as well. John asked why legacy companies are these days so often counted out in the discussion of the future of news. I recounted my views, above, and added that entrepreneurs have an easier time building from the ground up than big institutions do trying to rebuild from the top down. But I ended saying this: How can the legacy companies stay in the game? By acting like entrepreneurs, by bravely facing the new realities and by making bold moves to utterly transform themselves. It’s by all means possible. But it’s hard. And it’s rare.

There’s still a minute before midnight to try.

This post originally appeared on Buzzmachine.com

Jeff Jarvis blogs about media and news at Buzzmachine.com. The author of What Would Google Do? (HarperCollins 2009), Jarvis is associate professor and director of the interactive journalism program at ...read more

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