Business model? What business model?

Here’s three thoughts for the corporate types who own and operate newspaper chains to consider.

From Joe Strupp of E&P who summarizes the recent rounds of newspaper staff reductions:

If fewer people are buying a product — whether it’s a newspaper or a can of soup — how does decreasing the quality of that product make it sell better? Newspapers cannot cover news better with fewer people. … understand that we are in tough times in this business and cost-cutting is needed. But systematically dismantling your newsrooms so drastically is foolish.

Now from Brian Lambert’s story in the Rake about newspapers’ identity crisis. He quotes former Minneapolis Star Tribune editor Tim McGuire:

There’s lots of planning going on in newsrooms,” said McGuire. (The post-McGuire Star Tribune will unveil its latest, long-planned makeover sometime in the coming weeks.) “But most of the orders to find solutions to the industry’s deepest problems come with one instruction: Don’t spend significant money. I know several editors who have been told to research some radical new solutions, but then told to do it on the cheap. Publishers want to restore excitement to newspapers without spending a precious dime of that twenty-one to thirty-five percent profit margin. [It] won’t happen.” McGuire added, “When your franchise is under attack from every angle and you are obsessed with inexpensive, incremental solutions, then you are guilty of harvesting, milking, or negligence.” (emphasis added)

And from Richard Reeves, who observed everyone on his subway car was reading a free paper:

The free newspapers are thriving all over the country now. That is because 80 percent of newspaper revenues come from advertising. And because overall circulation is in decline, there is obvious logic in getting more readers by charging less money. The strategy ends at and has reached the lowest price, nothing. That is the future, I think, and ironically, I also think that the free papers will become better and better in their news content, analysis and advocacy. Even when all the prices are zero — there will be elite exceptions like the Times and The Wall Street Journal — the people who will be the new market will figure out which products are better.

Methinks the people at the top — the ones with levers to pull that could change the face of journalism in a positive, productive way — do not understand journalism. And there’s growing evidence that they don’t really have a valid business model for the newspapers they own, either.

Discuss.

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