Synopsis: In this post I identify five stories that I think underlie the assumptions McClatchy CEO Gary Pruitt makes in his April speech before Commonwealth North. For each I give some excerpts from the speech, explain the basic idea of the story, and follow this with my own comments. The five stories are:
Story #1: “Newspapers won’t go away, just some companies.”
Story #2: "While newspaper is our core business, we need to diversify. ⅓ of cash profits come from non-Newspaper operations"
Story #3: The invention of the internet is somewhere between the invention of fire and the invention of call waiting.
Story #4: We are running a business here.
Story #5: Newspapers are special; they're critical to community and democracy.
The Models/Stories
The things in the world we can see, hear, touch, etc. we liken to being 'real' , being the basis of fact. But we need models, the stories in our heads, that tell us which of the millions of bits of data we need to attend to and then how to interpret them. Mostly this is done unconsciously. People have different stories in their heads, therefore when they witness the same event, they often remember different things and come to different conclusions. So if you heard Pruitt's speech, you'd probably pick out different parts to write about. And that’s why people watch the same political debate on television and come to totally different conclusions about which candidate to vote for.
In this post, I’m trying to distill the stories, the underlying assumptions, that Gary Pruitt has about the newspaper industry, McClatchy, and the Anchorage Daily News (ADN). Some things he said out loud, other things I've had to deduce from what he said and didn’t say.
[Note once more: I don't have a transcript of the speech. The quotes are notes taken from the audio. I think I've captured it close enough to preserve the meaning, but I haven't gotten every word verbatim.]
Story #1: “Newspapers won’t go away, just some companies.” This is probably the key story underpinning everything he said. Newspapers will survive. He compares this with the dominant story ("conventional wisdom") which says newspapers are dying.
A supporting story for this is(26:45)In the Anchorage market between the newspaper and the unduplicated reach of the website, the ADN is reaching 8 out of 10 adults. And has a growing audience. It’s never been larger. So the fact that we’re dying in (and?) the conventional wisdom says [sense?] that our audience actually today is bigger than it was yesterday. [Sentence didn't quite make sense to me in the audio] More people want what we produce today than yesterday. That’s not the profile of a dying business. Best predictor of media company is that your audience is growing. We think that's a very positive long term measure for us
But we also recognize that in the short term, the newspaper model is under stress. As the internet takes share and we’re in a recession. So the best measure of how we’re doing currently is ad revenue and that’s terrible. That’s why the conventional wisdom pervades that newspapers are doing poorly.
- “We’re the last mass medium in the market."(25:30)
While other media are fragmented ( for example, there are more and more television stations so each television station gets a smaller share of the audience) newspapers have gone in the opposite direction and now there is only one newspaper in nearly all markets. So it gets all the newspaper market.
- The community has a common base of knowledge. Pruitt:
(20:20) Audiences have fragmented. And therefore it’s hard to build a common base of knowledge or a sense of cohesive community, because audiences are so fragmented. And that’s really one of the important roles that a newspaper can play. 'Cause no other institution can do that locally. Yes, when there’s a major news story, or nationally, an election, a war etc. Of course there’s a common base where you can talk about it, but locally it’s hard to build that base.
So while it’s important when you read a newspaper and you learn something in that article, it may be more important that, in the ADN’s case, more than 200,000 people are reading that same story and can communicate about it, can talk about it and can work together to try to solve problems or improve Alaska. That’s one of the reasons why it is great for newspapers to be the last mass medium. It’s important for public service but it’s also important as a business position, for business plan. Differentiates us from fragmentation and the other competitors others whose audience is falling more precipitously.
- No competition with other newspapers.
OK then, if people don’t necessarily want a common ground, will the newspaper monopolies be like the old television monopolies? Because there are no markets, will people have to stay with newspapers? or will they migrate to the internet? Do people really want to hold dead trees (new corpses each day) in their hands so they can read the same story everyone else in town is reading? What happens when a slickly packaged electronic newspaper, say the iRag or the iPape, becomes available? Will people abandon newsprint totally? Or will it linger while the newspaper generation dies off? Or will there be a renewal of newspapers just as there is a renewed interest in vinyl records?
And, are the other media - television, radio, the internet - really only in competition with each other and not the newspaper? Is there really a long term market for that newsprint that is safe because there are no other newspapers competing?
It’s a nice story, but is it true? The evidence Pruitt offers is slim, bordering on wishful thinking. He touts increasing readership, but the increasing numbers of readers he claims (I’ll get to that when I do the numbers section) are in electronic, not hard copy. And they aren't paying anything. I keep thinking about his dismissal of Wired Magazine’s editor. (See Story 3 below) Pruitt wants to believe this, but that doesn’t make it true.
And Pruitt himself starts hedging his bets.
Story #2: "Times are changing and while newspaper is our core business, we need to diversify. Today, nearly ⅓ of cash profits come from non-newspaper operations. We realize that newspaper alone is not enough. (21:45)
We’ll supplement [the newspaper] with direct mail, specialty publications, and reach those who don’t subscribe to the paper, and have internet, and deliver digitally to cell phones, smart phones, pda's.(25:30)Comment: Hmmm. Is newsprint just symbolic? Just like cars are rated in horsepower, McClatchy has to keep a vestige of the newspaper?
Story #3: The invention of the internet is somewhere between the invention of fire and the invention of call waiting.
The internet is the interloper that started stealing newspapers’ revenue by offering a better way to do classified ads. It can also tell the news as it’s breaking. And (we all assume) it has unlimited free pages. So, just how important is the internet and how will it affect newspapers? Pruitt asks
Was the internet like Gutenberg? Or just an important new medium like television?(22:45)Pruitt talks about inviting the editor of Wired Magazine to answer this question for his editors and publishers.
(23:00) We thought he’d be on the side of Gutenberg. I way underestimated this guy. He said, no, not Gutenberg. The internet is the most important development for human kind since the invention of fire. .. Well, if you're the editor of Wired magazine, then the internet is like fire to you. ..The same week, I read a column, written by a guy who is now one of our columnists, Dave Berry. He said it was the most important communications innovation since call waiting. .. We determined our strategy should be somewhere in the middle.Comments:
A. “well, if you’re the CEO of a newspaper company” then newspapers are going to survive. Should we discount what Pruitt says the way he discounted the editor of Wired Magazine?
B. I assume this part of the speech was just for laughs, but I’m not sure. Dave Barry is a humorist. Surely, Pruitt doesn’t take the call waiting comment seriously. So what is his actual conclusion of the importance of the internet for newspapers? If not fire, what? Back to Gutenberg’s printing press? If he really means in the middle between call waiting and fire, where is that? What about the automobile? Is the newspaper the horse drawn buggy? Is the newspaper the Pony Express? The rotary phone? The typewriter? Or is it the acoustic guitar, still here despite electricity? Or glass despite the introduction of plastic?
This is a good question, but Pruitt's answer - in the middle - doesn’t mean anything. Whatever it means, he then goes on to take action on it:
(24:15) We better operate the leading local internet business in each of our markets and have the leading internet site with the most traffic and the most revenue of all of the local sites. And we doI'm not certain this is true in Anchorage. But I'll get into this when I talk about numbers in a day or two.
Story #4: We are running a business here. Pruitt said this in various ways. He used the term "Legacy Costs," a sweet turn of phrase, which I understood to mean, those luxuries that we inherited from the old days, but that we can't afford anymore now that we're corporate and we were aren't making piles of money.
(28:00)So we’re going to have to get through this structural transition and recession, and you do that by looking at your cost structure and thinking well if we were a news company starting today, how would we be structured, not burdened by the legacy costs of the golden era, when you had a virtual monopoly? Trying not to fall victim to the same sort of difficult transition that the airline industry is going through.
(41:15) What if we started a news company today, what would it look like? What would we focus on? So you need to think about what is the core competency and core experience of the newspaper and its website? You need to think about the reader and the advertiser. And what experiences he or she is having as a reader or advertiser and make sure those are positive experiences. Maybe we can’t do everything we used to do because of the competition and media mix. And so you have to focus on what you do that’s most important. The very technology that challenges us on the revenue side - internet, digital technology - also allows us to operate more efficiently. . . Not every job needs to be staffed locally. Things can be done remotely, computer systems can be centralized. Other companies are specializing in doing businesses we had to do before and increasingly what you have is a transforming business based on technology not just on the revenue side, but on the cost side. What it means is that newspapers become smaller, more specialized organizations focusing especially on news and ... selling advertising.
Comments:
No question about it, McClatchy is a large, publicly owned corporation that has to answer to Wall Street. Many of the family owned newspapers that didn't sell out to bigger corporations bit the dust. A few questions:
A. Can a corporate, bottom line oriented paper stand up to advertisers who disagree with editorials? Or will they cause a paper to block a story that is critical of a big advertiser who might remove their ads?
Or perhaps this is where being a monopoly pays off. Pruitt told a story about not endorsing the wife of the largest advertiser at the Fresno Bee when she ran for local office. And right now it appears that (in part) the ADN's editorial support of AGIA (Alaska Gasline Incentive Act) has spurred full page ads to counter the editorials. Maybe this monopoly stuff works.
The real question is what will the corporate heads think is core, is disposable? McClatchy is still an independent newspaper corporation. But most of the big newspapers are parts of larger corporations that aren't run by people with journalism training. (It appears that Pruitt "became a publisher after helping the company [as an attorney] go public" and, from what I can find online, that his training in journalism was on the job as an attorney and in other upper level positions.)
B. Pruitt also said
90% of original reporting is done by newspapers, not television or radio. In most markets, the newspaper newsroom is larger than all the other media.Will that still be true if "not every job needs to be staffed locally?" To be fair, perhaps, he meant that many of the administrative and technical jobs could be done distance, not reporting jobs. But the ADN announced this week it will cut a 11.9% percent of its news staff while cutting about 9% overall. Will expensive investigative journalism that is critical to the newspaper's partnership with democracy, as Pruitt phrased it [See Story #5], be cut for easier stories about bear encounters and lost hikers?
Story #5: Newspapers are special; they're critical to community and democracy.
(56:30) Newspapers do some things very well. . . Once a day, it will stop the world and inform you. And you’ll get professionally edited and selected stories about what’s most important for you locally and internationally, and hopefully some entertaining news as well. And that’s a very valuable thing in life. It organizes it well for you. It’s convenient, it's portable. There is content there that isn't online. It is a different product and some people like that. Bill Gates likes that. Once a day he wants to stop and read that news. He also goes online for news.
[Sunday, 10:20am - Speaking of professionally edited, I just looked at the article on the Mayor's Marathon on the front page of today's sports section:
Jerry Ross felt his race unfolding nearly flawlessly. Granted, hard miles lied ahead, but his pace was perfect.Ouch.]
(28:45)From the early days of this country, newspapers have been indispensable in creating self government in the US. I know, this is where you roll your eyes. But I actually believe it. In terms of having sufficient knowledge to participate in society, the founding fathers knew this. Democracy and journalism have been more than neighbors, they’ve been partners all these years in this country.Comment:
When my blogger friends badmouth the ADN they point to their favorite example when several bloggers, but no ADN reporters, covered the Alaskan Republican Convention (I was out of the country at the time) where the Lt. Governor announced he was challenging our Congressman in the Republican primary. My response to that is that we get to choose our stories, but the ADN has to cover everything, has to be the paper of record for what goes on in Anchorage and Alaska. And it's vitally important to have organizations that PAY people to report. So I think there is something to this. I don't roll my eyes, and I'm sorry he feels the need to be so defensive about it. That isn't a good sign.
But I do take issue with one of Pruitt's comments:
Most blogging going on, while it can be helpful, is opinion writing, not original reporting.I'm sure this is true. But I suspect that most of what's written in the ADN, if not opinion, is NOT original reporting either. Blogspot lists 9200 bloggers in Alaska. While this number surely includes defunct blogs and falsely identified blogs it's a reasonable starting point since we have Wordpress and other blog platforms as well. If one percent of Alaska bloggers (92 total) wrote two original stories per week, that would be 184 original stories a week. I dare say the ADN doesn't do that.
It is an awesome responsibility to tell a community, "Here, these are the most important things for you to know." Blogging democratizes that process and allows voices that normally wouldn't be heard to help determine what the community should know. But Pruitt would, rightfully, say, who can read 9200 blogs? Or even 92? That is a problem, but one that newsreaders and Google and the blogs themselves are overcoming.
I too have internalized a similar story about the critical linkage between journalism and democracy. It's why I'm spending so much time on this blog commenting on the ADN and on blogging. But democracy and efficiency do NOT go together. Fair processes and in-depth reporting are not cheap. Doing what's right is not as easy as doing what's expedient. Nowhere in Pruitt's speech - except maybe when someone asked about Rupert Murdoch - did he address the inherent conflicts between McClatchy's business needs to be efficient and make money and journalism's traditional roles that he lists in this last citation. He talks about the business needs and he talks about democracy, but not about how they can live together. He glosses over the inherent conflicts and says we can do both, no problem:
(20:45) Great for newspapers to be the last mass medium. Important for public service and also good for business plan.OK, these are my thoughts on the models or stories or you could even call them assumptions that underlay Pruitt's speech.
Let's review Pruitt's underlying stories, at least the ones that I saw in his speech.
Story #1: “Newspapers won’t go away, just some companies.”
Story #2: "While newspaper is our core business, we need to diversify. ⅓ of cash profits from non-Newspaper operations"
Story #3: The invention of the internet is somewhere between the invention of fire and the invention of call waiting.
Story #4: We are running a business here.
Story #5: Newspapers are special; they're critical to community and democracy.
If we look at these stories grouped together like this, we can start to ask whether any are mutually exclusive or whether, in fact, all of them can live comfortably together. As I look at them I see two groups:
- Stories # 1, 3, and 5 are stories that support the idea that newspapers can and/or should survive
- Stories #2 and 4 are about the importance and requirements of business
If that is the case, I'm betting on him jumping to the Business Model chunk of ice.
But we also have to ask, "What is this thing he calls "newspaper" that is so essential to democracy?
Is it a medium - paper and print?
Is it content - stories about the community and government?
Is it function - creating self government? selling advertising?
It seemed to me that he glossed over these and said: it's the customer - the reader and the advertiser. So now democracy means the market. I guess that is a form of creating self government.
Of all of these, it seems to me the medium is much less important than the function. But Pruitt does argue that the medium is the function - that as the only mass medium in the market it is the only medium that can engage the whole community in the same stories.
Using the models I've collected over my lifetime, I've abstracted what I thought was the core stories of the speech to try to understand:
a. what's going to happen to my local newspaper
b. what's going to happen to newspapers in general
c. collaterally, what might that mean for bloggers
d. what might this all mean for democracy and what do those who are concerned for the state of democracy in the US need to start doing.
In the next day or two, I'll post on the numbers that he offered in his speech.
Being a blogger has advantages. While I don't have an editor to correct my typos and dumb factual errors, I also don't have an editor who tells me what I should or shouldn't write about.
AND I don't have an artificial deadline.
I would like to know haw much of their problem is because they took on so much debt when McClatchy bought out one of it's competitors.
ReplyDelete"Jerry Ross felt his race unfolding nearly flawlessly. Granted, hard miles lied ahead, but his pace was perfect."
ReplyDeleteMistakes are going to be made in any newspaper (look at how many corrections the New York Times runs daily, but unfortunately, the layoffs last week hit the copy desk pretty hard... I hope that doesn't mean we'll see more of this.