Joyce Terhaar

Executive Editor and Senior Vice President

The Conversation: What business model is best for news?

07/07/2013 12:00 AM

07/08/2013 4:06 PM

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Put executives from traditional newspaper companies in one room, and you will hear many strategies but no magic formula about how business models are evolving in today's disrupted publishing world.

There's the invest-big-in-print strategy launched by the Orange County Register. And there is the strategy of Advance Publications Inc., owner of the (Portland) Oregonian and other newspapers, to home-deliver newspapers only three or four days per week and push digital news consumption on other days.

Those were the extremes that attracted attention recently at the American Society of News Editors conference in Washington, D.C. The McClatchy Co, which owns The Bee and 29 other daily newspapers, is charting a middle course.

Even as the millennial generation and some Gen Xers prefer their news in digital form, many of you continue to tell us that you like to read the printed newspaper every morning.

Those of you who do will take heart in comments made at ASNE by Pat Talamantes, president and CEO of McClatchy. Under tough questioning about whether McClatchy would stop publishing a daily printed newspapers in the next five years, Talamantes responded that there was a "zero" percent chance.

Talamantes was joined by Gracia Martore, president and CEO of Gannett Co. Inc., and others who pointed to the importance of the daily newspaper reading habit of many consumers. Martore said Gannett certainly isn't considering pulling back from daily print publication because the company wants to increase engagement with consumers, not lessen engagement.

Reading the newspaper with a cup of coffee every morning is a valued habit for hundreds of thousands of you who make up our core audience. I regularly hear from longtime subscribers who don't want to lose the printed newspaper for that reason.

It's the kind of habit that other industries spend heavily to cultivate. Why mess with that?

A good chunk of how we all live our lives is a matter of habit, according to research reported by Charles Duhigg, a New York Times reporter, in his book "The Power of Habit."

Duhigg's excerpt for the Times looked at Target Corp.'s efforts to use data analysis to identify pregnant shoppers. Having a baby, it turns out, is a life disruption that causes people to change their shopping habits. Target wanted to attract those families before they formed a shopping habit elsewhere.

Duhigg wrote: "The reason Target can snoop on our shopping habits is that, over the past two decades, the science of habit formation has become a major field of research in neurology and psychology departments at hundreds of major medical centers and universities, as well as inside extremely well financed corporate labs."

A study from Duke University, Duhigg reported, "estimated that habits, rather than conscious decision-making, shape 45 percent of the choices we make every day." Upsetting a habit, then, is serious business. News executives choosing to do so now are focusing on other habits already evolving, particularly among younger news consumers.

On June 22, Publisher N. Christian Anderson announced that the Oregonian, an Advance newspaper known for quality journalism, would stop delivering newspapers to homes each day, and would instead deliver them four days per week while beefing up offerings of digital news.

In a letter to readers, Anderson acknowledged loyal readers had told the Oregonian "they really don't like the idea of not getting the paper in their driveway every day."

Anderson quoted hockey great Wayne Gretzky in his explanation to readers: "I skate to where the puck is going to be, not to where it has been" and then wrote, "In our case, the puck is online and on mobile devices."

That's essentially been the same message in New Orleans and other markets where Advance stopped daily newspaper delivery.

Not addressed in Anderson's announcement is the challenge publishers face today transitioning a business that has substantial costs beyond the newsroom journalism. Printing newspapers is a manufacturing business with investment in the pressroom, packaging center and distribution. Digital distribution avoids some of those costs – newsprint and distribution, for instance – yet also requires substantial investment in new technology. And when you consider digital news such as the e-editions published by The Bee and many newspapers, the cost of journalists designing and editing pages remains, even though newsprint and delivery costs go away.

By choosing to cut back on print and focus more heavily on digital, Advance is cutting some costs and certainly cutting back some of the multi-tasking within publishing companies. Yet it remains to be seen whether the company will lose print advertising – still a decent revenue source even as more advertising moves to the web – and most importantly, whether it will lose customers.

Aaron Kushner, the new publisher and owner of the Orange County Register, took an opposite strategic approach about a year ago, hiring more journalists and making the printed newspaper more substantial. It remains unknown how this approach will fare over time.

A Register story quoted Kushner telling staff, "The conventional wisdom is that you must put digital first if you are going to be successful. I believe there is actually only one thing we should be putting first, which is subscribers."

A fan of print, I'm with readers who count on their paper landing in the same spot each morning even as I first check The Bee's smartphone app.

As an editor in today's media world, I also watch the habits of young news consumers and know that many of them will never care about newspaper delivery even if they like coffee in the morning. They might be brand-agnostic as well, following links anywhere they lead on the Internet.

But given this period of transition in all our habits – not just news consumption – it's too soon to make publication of news an either-or proposition.

Many of you still want print. We'll keep delivering it. Others are reading from computers or tablets or smart phones. We will be on those platforms as well.

Some of you get news every which way because each platform has its own distinct advantage.

Newspapers give you an edited, packaged product designed to keep you well informed about not just what happened in the last 24 hours but the context and meaning behind the news. There's a beginning and an end to the newspaper, and satisfaction in completing it.

Smartphones and apps allow you to check in all day on headlines or sports scores so you can decide if you want to know more about something happening right now. Websites are a mix – you'll find stories that also are in print but rather than a single photo or graphic you can browse galleries, play with an interactive graphic, watch a video, check out a database or documents behind a story.

The mix of mediums provides a rich choice for readers. It also provides a path for journalism to evolve as audience habits change. Regardless of platform, the goal should be journalism that serves the community.

Reach Executive Editor Joyce Terhaar at (916) 321-1004. Follow her on Twitter @jterhaar. This column was modified from the original to clarify that the Oregonian is reducing delivery - not printing - of the newspaper to four days a week.

About This Blog

Joyce Terhaar is Executive Editor and Senior Vice President of The Sacramento Bee. She joined the newsroom in 1988 to cover business and development but has spent most of her tenure editing, first the local report and then, as managing editor in 1999, the newsroom's daily report. Contact Terhaar at jterhaar@sacbee.com or 916-321-1004. Twitter: @jterhaar.

 

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