Creative Destruction and Newspapers
I love reading the newspaper. I like the feel of the broadsheet in my hand, the anticipation of turning each page to see what’s next, and the sense I get of being plugged into the world through the rhythm of daily reading. I am a newspaper loyalist, and I’m an endangered species.
That, of course, is not news. Newspapers are shrinking and their circulation shriveling, like a mirror reflecting the Internet’s growth and expansion. Politicians and pundits (including many newspaper editors and publishers) who aren’t schooled in business don’t recognize the absolute and inescapable law of creative destruction. They wring their hands as if what’s happening is a tragic thing. I see it simply as the way of the world.
To a news consumer, the Internet offers many advantages over ink and paper, from timeliness to portability, affordability to dialogue. And for a generation of readers spawned in the wake of the Web, getting their news online is not only better than in print, it’s more natural. Even old guys like me who love the sound of the thump on the driveway in the morning increasingly turn to our Macs and Blackberrys to keep up with breaking events.
But while the Internet is rapidly replacing ink, paper and newsstands, the Web is to news as an aluminum can is to Coke – a terrific way to deliver the product but not the source of its value. Newspapers are struggling because newspapers are confused – they forgot they were in the business of building an audience and focused instead on selling the audience (to the advertisers who increasingly bore their cost of operating). That was fine as long as they had a monopoly on distribution, but it led them to spend their limited resources on adding more ink colors rather than more color to their ink. Now that advertisers have (ultimately) infinitely more choices, newspapers are stuck.
But the answer isn’t so difficult. The key to the future of the newspaper industry lies in its past. There will always be a market for news, and newspapers still have core competencies in gathering, reporting and interpreting what’s important to their readers. If they do their job well, they’ll continue to be able to provide the exclusive content for which readers will pay, regardless of whether or not it results in ink-stained fingers.
The more the newspaper industry focuses on ‘news’ rather than ‘paper’, the better off it (and we) will be. That will enable it to embrace evolving distribution opportunities and find new sources of revenue and competitive advantage. Just like every other industry must do.
Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of “When Growth Stalls: How it Happens, Why You’re Stuck, and What To Do About It.” Learn more about him at www.WhenGrowthStalls.com and at https://twitter.com/whengrowthstall.
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