Newspapers need to `do it different' on getting paid

April 08, 2007|By Jay Hancock | Jay Hancock,Sun columnist

Everything Sam Zell does, he told the Chicago Tribune last week, "is motivated by doing it best, doing it different, answering questions that no one else could."

Good, because different is what the newspaper business needs. Last week the real estate tycoon agreed to take control of Tribune Co., which owns The Sun, the Tribune, the Los Angeles Times and other papers.

His odds of reviving the company are long. But if Zell's aim is to change newspapers' business model rather than their content, he might be onto something. The problem isn't the journalism; soaring Web readership proves that. The problem is getting paid for it in the Internet Age.

Addressing the following questions that no one else has answered might point a way toward solving it.

Why do newspapers pay the Associated Press to distribute their expensive, hard-won stories to radio, TV, Yahoo and other enemies of newspapers?

Newspapers run AP as a collective, but the interests of AP and its members have never been further apart. The No. 1 problem for all media is promiscuous content distribution with low or no compensation.

AP makes this worse, striking its own deals and enabling newspapers in their role as content floozies.

Papers must regain control of their stories, hoard them under their banners and Web sites and stitch them to their subscribers and advertisers. If you want Yahoo viewers to read your stories, deal with Yahoo directly, as McClatchy newspapers agreed to last week. Quit AP or revamp it.

Why aren't more papers charging for online access?

Growing readership has persuaded publishers to seek nonpaying Web eyeballs and hope advertising follows. Much Web newspaper content probably will always be gratis. But most papers are petrified to even experiment with charging online. Somewhere in the mind of God is a business model that lets non-national papers collect online subscriptions.

Maybe Zell will discern it. He doesn't have to go whole hog. Choose one paper, create a micro-payment system for premium content, charge for a few high-demand items and see what happens. Heck, choose one blog at one paper and charge for a portion of the material. Surely The Sun's rock-star Orioles blogger, Roch Kubatko - Tribune Co.'s most widely read blogger - could generate paying clients.

If it works you'll start pumping revenue oxygen back into Tribune Tower. If it flops you've invested in wisdom.

Why have newspapers cut investment in circulation?

The federal "Do Not Call" registry, launched in 2003, was a great excuse for papers to stop recruiting subscribers. First they reduced hiring telemarketers, which saved money and helped hit quarterly profit targets. Then, of course, circulation fell, which saved even more on newsprint costs.

But you can see where this ends up, and it's time for papers to again spend serious dough on promoting their off-line product, which still generates most profits. This may involve better ad campaigns, reducing subscription prices or massive door-to-door sales. It also requires improved service for existing customers, which means reversing Tribune's transfer of its call centers to the Philippines, for a start.

Simultaneously, newspapers must push hard for Congress to enact a "Do Not Call" exception for newspapers similar to the one in Canada.

Why is almost all newspaper content treated as obsolete the day after it's published?

Much of what newspapers do - restaurant reviews, crime reports, high school and college sports stats, movie reviews - are valuable long after publication. Thanks to the Web and terabyte hard drives, they need never be out of readers' reach.

But papers are terrible about preparing old material for reuse. Instead of just sticking it in a searchable archive, they need to reorganize it by category for easy access. It's more like being in the database business than the news business, which is why papers don't get it. But it might increase readership or position archives as a revenue center.

Tribune's impending private structure is supposed to give shelter from Wall Street's glare to work these things out. Given the company's post-deal debt burden, I suspect true shelter will require selling the Los Angeles Times or other assets beyond the Chicago Cubs to cut the interest load.

But what then? The industry's answer to the bulleted questions would be: Because we've always done it that way.

It's far from clear that Zell will keep his promise to "do it different," especially in a constructive way. But somebody ought to try.

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