The sad news from Colorado, Detroit, Minneapolis, Miami, San Francisco, Chicago and Philadelphia, where great newspaper brands are collapsing, doesn’t deserve too much attention.
It’s not the death of newspapers but the end of an era of greed, bad management and, more importantly, a lack of re-investment in the core business.
The World of Pulitzer died.
The New York Herald died.
There always will be casualties.
Like in any other business or industry.
But the newspaper implosion in the USA has very specific reasons.
I got a message today from one of our best British senior consultants, and I will quote him because what he says makes a lot of sense:
If your newspaper is boring, people will stop buying it.
If it is essential to their lives they will go on buying it, and more will buy.
The US problem is very different to the rest of the world.
I believe what he says about the shift to internet in US particularly being a self fulfilling prophecy.
In US it is nasty to go & buy a paper and they are BORING in general.
In most places in the world one buys a paper from a person one knows & can talk to them each day.
In 1981/2 financial year we (UK newspaper industry) were delighted to make 9% profit/turnover.
In fact Bradford did 8.9% that year and Pearsons were delighted & we had a chairman’s party.
By 2003 corporate MDs were being sacked for failing to make 40%.
The corporation directors had to make their bonuses, which we of the 80’s didn’t get to the same extent.
In 1982 it was 10% to salary.
By 2003 people were getting 150% or even bigger bonuses and some in “Fleet Street” were receiving over $1M even in production.
The products got more and more boring so people stopped buying, so staff were sacked and enthusiasm fell etc.
Down the drain we go in a nice spiral.
All fuelled by greed when enthusiasm and connectedness and news was what people wanted to buy, not cost saving and a few people’s wealth…
When we were in Harvard 2005 the message was clear – the proprietors didn’t know how to fit the market with their profit expectations so they substituted technology.
Of course that is feasible and is what we do.
I’ve been reading many books I was delighted to find in the COOP in 2005 – so many I had to buy an extra suitcase – and all of them decry the greed motive killing the US newspaper, radio & TV industries, encouraged by the business barons who want to hide what they are up to.
Morals just like a cowboy movie.
Milking wealthy industries is an easy job, and stupid and incompetent managers can do it.
But today, real managers are needed more than ever.
A lesson that my father used to teach me with these Spanish words, which, unfortunately, are very difficult to translate:
“Para las cuestas arriba quiero mi burro, que las cuestas abajo yo me las subo.”