The killing print newspaper gangs must be very happy today because this wise astrologer-journalists has seen the stars and her veredict is final:
”For daily print newspapers, the end is here.”
Maria Barron, the Astrology Examiner is (sic) a journalist with a mystical streak who studies the stars from 10,000 feet high in the Rockies’ Front Range.
Oh, dear, this is a serious business adviser!
Let me start by saying that INNOVATION was born in Brazil, as our first clients were O Estado de S. Paulo, RBS, O Globo and Editora Abril.
Twenty years ago, the newspaper market in Brazil was in very bad shape.
But after democratic elections, the media started to look for innovations, change and new ideas.
These were great years.
And now the changes of the past are paying off with a market that’s growing.
Quality papers are up.
As are popular ones.
Metro and regional, too.
Folha de S. Paulo reports today the good news:
Circulação de jornais aumenta 5% no Brasil
The circulation of newspapers is up 5%: 4.35 million copies sold everyday in 2008 against 4.14 million in 2007 (IVC figures, the national ABC system).
The projections for 2009 are also positive.
Pictured is the new CORREIO of Salvador, Bahia, relaunched by INNOVATION in 2008, and one of the fastest growing newspapers in Brazil today.
Rebekah Wade, editor of London’s Sun, in her 2008 Cudllip Lecture:
” A quick analysis of our industry in 2008.
The ABCs of our national daily newspapers show that last year 382,000 people stopped buying a daily paper.
And if you look at this chart – is it a coincidence that the biggest losses are where we’ve seen the biggest cuts in journalism?
Of course, the answers to our industry problems are more complex than that.
Last year, we gave away over 163 million copies in bulks to maintain these levels.
We listed 270 million foreign sales.
We gave away 120 million free CDs and DVDs – of questionable quality and at enormous cost – just to rent readers.
We paid our retailers and wholesalers over 800 million pounds in margins that have outstripped RPI.
And while 1,400 corner shops closed, it’s been years since we developed alternative new routes to market.
We saw another increase in the number of free newspapers. In 2008 we distributed 639 million copies.
The huge growth in digital still doesn’t pay for high quality journalism.
We give away our expensive editorial content free online without an economic model that compensates for the loss in traditional revenues.
The rising cost of news and magazine print is in double figures and there is the small matter of the recession.
But despite all these challenges, there are huge positives. Especially if you compare our industry to television.
Despite the credit crunch, 3.5 billion daily newspapers were sold last year with an estimated 1.8 billion pounds in advertising revenue.
Of course like any business in a recession, we have to cut costs and drive revenue to survive.
But cost-cutting in this business only works if the savings are reinvested in journalism.
Yes, man!
Picture by PA.
In 2001, Leo Bogart – INNOVATION’s New York Director at the time – introduced me to a very fine journalist, Lawrence K. Grossman.
He was the distinguished former President of NBC News and of PBS.
And a few years later, in 2004, Lawrence sent me an interesting paper presented at the Breaux Symposium about Should the Government Subsidize the Press?
His 2004 ideas were quite unique.
And prescient of today’s concerns.
You can download it here, and read from page 163 in this PDF with the full transcript of his paper at the 2004 Breaux Symposium.
The New York Times now has published a revival of these old ideas, but ignoring Lawrence’s original arguments in the matter.
Shame on them!
But at the same time, I have to say that I don’t agree with the Sarkozy subsidies to save French newspapers.
And I don’t agree that endowments will save American newspapers either.
What we need to save is journalism, not newspapers.
What we need to save is free reporting.
Free editing.
Free distribution.
And the free press.
I’m sorry, but subsidies or endowments will only promote the laziness of managers and newsrooms.
More financial caviar in today’s leading editorial from The Guardian about The End of the age of excess:
“Leaving the bankers to design the reforms would be like allowing tigers to design their own cages”
Right on the spot!
“Read the classics until you are excited by them,” he once advised would-be writers.
“The basic teaching tool writers must use are other people’s books; the classics.”
John Updike by Zach Trenholm.
Oh boy, I am having a real blast reading the print edition of The Guardian everyday.
Like today’s paper, with a superb double spread from a new chapter of the Road to Ruin series that presents the bonuses and salaries of the best bank robbers during the current financial crisis.
Or this financial caviar from Simon Jenkins’ brilliant column, Common sense has no place on the Brown-Darling Titanic: As the economic ship goes down, all lifeboats are for bankers, however hopeless they might be. Let the steelworkers sink.
Just to test it, some black pearls:
Ever since Alistair Darling hired a posse of City bankers to advise him on recession, they have recommended that he give money unconditionally to banks.
As the Titanic sinks, they cry that he cannot let bankers drown.
They are our friends.
Let steelworkers sink, but keep the boats for the bankers.
…
Stupefying amounts of taxpayers’ money have been given to banks, and with no conditions attached.
It has been nationalisation without responsibility, nationalisation as charity.
…
The Germans are doing the right thing.
They are issuing vouchers to people to spend on German-made cars.
The money goes straight from the consumer to the producer, thus keeping the dealer, the factory and the steelworker in business.
None of it sticks to a bank.
…
This is not a matter of left or right, socialism or markets, free trade or protectionism.
It is common sense versus stupidity.
Stupidity is winning.
Bravo!
And one reader’s comment:
The UK had 29.5 million taxpayers in 2006–07. Now the government has spent nearly 200,000,0000,0000 on the bailout. They could have given the same amount of money to the tax-payers, 6,800 pounds each. These tax payers would have used it to cut their borrowing, pay off their part of their mortgages and spend to stimulate the economy. The money will end up with the banks anyway.
More on how to manage newspaper companies in a recession.
Focus on your “core business.”
A few days ago, I said to the Philadelphia Inquirer’s David Sullivan that if everything fails in the U.S. newspaper industry, the final solution is not Carlos Slim, but EL CORTE INGLES.
This $20 billion company runs the largest Spanish Department Store (“THE ENGLISH CUT”) with more than 60 shops and more than 700 million visitors annually, and has a terrific management and sales team.
A few years ago, I met the Maverick head of its Human Resources Department and he told me the secret:
“As soon as we are going to open any store in any new city our first priority is to hire the best sales people.
“So we shop in the best stores and we hire the best sales people on the spot.”
Go to any EL CORTE INGLES and you will find that the secrets of this fabulous Spanish chain are:
1. Good quality products, not cheap, but at a fair price.
2. Total customer satisfaction guarantee. “If you don’t like it, return it. No questions asked.”
3. Great sales force reminiscent of the troupe from Nordstrom stores in the U.S.
4. A serious financial management that has made the chain a “de facto” big bank operation.
5. Focus on just the core of their business: pleasing customers.
What newspapers can learn from EL CORTE INGLES is this:
Keep the focus on your core business and make customers happy.
But what is the “core business” of our newspaper industry today?
Well, Jeff Jarvis would say that it’s “the conversation with your communities.”
That’s fine with me.
I would say, though, that newspaper companies are no longer just editorial operations to find, edit and deliver information, charging advertisers and readers, but “social institutions” to provide us with what Neil Postman called “understanding.”
Yes, “understanding” is our core business.
Not just plain talk.
Pure facts.
Old news.
Or commodity information.
But analysis.
Explanation.
“Understanding.”
For EL CORTE INGLES, it is “customer satisfaction.”
For newspapers it is selling “understanding.”
We are in the “understanding business.”
Again, as O Globo says:
In paper.
Online.
Full time.
INNOVATION
