On News

The TiE Oregon event on Unfolding News was a frank and insightful discussion anchored by newspaper veteran Peter Bhatia and news entrepreneur Steve Woodward.

News about newspapers is either increasingly dire, or dramatic. The list of defunct newspaper continues to grow. Online, a news mogul mulls withdrawing news content from the Google index. Sitting face-to-face and talking with thoughtful people with real stories from the trenches quickly brings into focus the salient issues.

Here are some of the key points from the discussion.

1. Newspapers have historically been highly lucrative for their owners, providing greater than 25% margins. This is a for-profit business which is protected by constitutional amendments, and has enjoyed special dispensation such as preferred postal carrier rates and legal protections.
2. Printing presses have modernized, computerized and become efficient, yet they are costly to operate. Home delivery of printed news (in its American form) involves a large distribution organization.
3. Yet, print ads are highly lucrative. A full page spread in a metro newspapers such as The Oregonian may cost upwards of $12,000. Assuming a daily circulation of 300,000, that’s the equivalent of $40 CPM. For comparison, online ad payouts are generally a small fraction even at $5, and typically just fractions of a dollar.
4. Newspapers are thus faced with the Innovators’ Dilemma. Their product offering with current technology is highly lucrative, enjoys wide margins, and faces certain decline. Yet, their organizational structure and DNA cannot embrace the cheapness of blogs and technology mediated aggregators.
5. Newspapers are vested in their identity around investigative journalism, political coverage and social issues. Sadly, unlike financial and business news (Reuters, WSJ) or trade news, a paying market for such news content is non-existent.
6. Newspapers and news staff are proud of their objectivity. Perversely, the audience for and profits in non-objective formats for political coverage (Rush, Lars, Glenn et al) are much higher.

With challenges like these, it was refreshing to see Peter’s upbeat outlook about the future. Combining technology with editorial expertise, pioneering new content domains such as hyper-local coverage and securing a funding model for investigative journalism, Peter is confident that newspapers will thrive in the emerging Internet and device-centric world.

Steve provided great insights about the art and craft of news reporting as well as some of the radical innovation underway. Steve is of course acting on the future, with Nozzl Media close to releasing a real-time mobile distribution and monetization engine for publishers.

Thanks and all the best to Peter and Steve.