Newspapers - an excellent place to breed new habits
An interview with Ken Doctor
Whenever I think about interviewing someone who has their finger on the pulse of the global news media industry, one of the first names that comes to my mind is Ken Doctor. His ringside seat at the greatest story ever told about our industry makes his insights both compelling and pragmatic because they are conceived through his thoughtful analysis of the issues and the facts.
Ken always shoots from the hip, telling it like it is, even when we don’t always want to hear it. But hear it, we must, because Ken has some great advice for all of us going into 2017…
Thanks Ken for joining me again this year to talk about “what’s new and what next” for publishing in 2017.
In the fall of 2016, you did an in-depth, five-part series about podcasting (which I highly recommend for our audience) saying, “We can mark 2016 as the year the podcast business came of age.” and raising the question, “How can podcasts help reinvigorate local media, at a time when print newspaper companies just shrink away?”
Podcasting certainly is becoming more popular with consumers and advertisers, especially on mobile. And we are starting to see some newspapers trying their hand at on-demand audio (e.g. The Guardian, The Washington Post and The New York Times). Why aren’t more newspapers and magazines diversifying in this direction as they are already doing with events, e-commerce and niche websites?
It’s an interesting question. I think that the bandwidth and the sense of that bandwidth adds so much to the local press; it’s so circumspect that there is very little real investment in innovation. There is investment in a few things, mainly in the pure commercial areas like marketing services and the event business. The level of editorial creativity is relatively low and the level of product innovation, even in digital, much less podcasting, is relatively low if you look at the digital products that we see from local companies.
So in the case of podcasting, I have not talked to local newspaper companies about it, but I would guess the answer for most of them would be: “Where’s the money in it?” It’s the same thing that I heard from regional newspaper companies when we talked about something called “mobile” five years ago. When I mentioned how the mobile audience is really growing, they’d respond with, “Yep, but there’s no money in it.” And then when asked about video, “I still don’t see the money in video.”
In all of these areas of innovation — we can go back even further with Search and other things — they have constantly been late to the game. They’ve been late in new technologies, new technology adoption and adaptation. As a result, by the time publishing gets into the game, the field is usually saturated by other people.
So does that mean that they also need to look at Augmented Reality and Virtual Reality in terms of innovation to shore up their businesses for the future?
I think that it’s wrong to think about it from a technology point of view, or a “What’s the new thing?” point of view. I think the right way for them to think about it is, “How do they satisfy more audiences, bigger audiences, and different audiences?”
There’s a range of techniques that are digitally-based in storytelling, whether it is video and Virtual Reality, audio and podcasting / audio-on-demand. All of these and many others are there, but you can’t go to them and ask, “Okay, how do we make money with this?” We need to ask, “How can we use something that gets an audience more deeply engaged?” And then look to monetize that audience.
Getting the audience, reader, listener, viewer, advertiser or sponsor to pay is not a quick fix. You’ve got to actually do something more for somebody and not just adopt the technology.
You’re talking about the engagement with the audience at a time when so many publishers continue to kill off the commenting sections on their sites and sending people off to Facebook, in a completely unmoderated, unengaged manner.
You said at the beginning of 2016, that the banning of comments was a symptom of a problem. But it’s becoming a much bigger problem, isn’t it? It’s becoming a plague.
It is, but it’s still a byproduct of the same thing. The amount of time people spend digitally with
a newspaper company is low because there has not been a real commitment from most of these companies to digital products that engage; commenting is part of that.
It isn’t easy to create a digital community, and clearly Facebook and the other social platforms serve a specific purpose. I cannot think of how local fits into that distinctly. We do see in the events area that the physical connection that people can make on a local community basis is something that can yield both engagement and moneymaking through sponsorship.
This is real community making, rather than just commenting, and I think that cuts to the core of the problem. If you’re going to be in the news business, you’ve got to be part of the community. Unfortunately, what the internet has exposed is that so many companies didn’t really feel part of a community. They wrote for a community, but they weren’t really part of it.
From your perspective, do you feel that the publishers are afraid of going into these directions because they think it will cost them too much money at a time when they’re cutting costs left, right and center, including the newsrooms?
Is it something that as industry players we need to educate them on and say, “This
is a low-cost exercise, but something that will yield long-term results in terms of that engagement.” What is it?
I think there has been a short-term thinking for an incredibly long term. Even back in the days when there was less financial stress — when I was at Knight Ridder, which was considered to be one of the top and highest quality journalism companies — if anyone in the enterprise came up with any idea, the question was, “How is it going to make a significant profit?” That was the first question anybody would ask.
Today, with the financial strictures, we have Gannett announcing layoffs, Postmedia announcing layoffs, and The Wall Street Journal announcing layoffs, all within two days of each other. Today, the financial stress of all that has
“This is the new frontier, that you’ve got to figure out a way to encourage a new habit in reading. It’s all about habits.”
gone for so long makes it such that people aren’t even bringing up ideas that are going to cost money, or uses terms like development and engagement. So this short-term thinking has lasted so long, there is relatively little long-term investment. Without it we see things spiraling down.
We always looked at journalism being an integral part of the democratic process. If we continue to see the disappearance of local media, is that going to affect the state of democracy? Or will there be other players
that will step in, such as national papers? But really, who can fill in the shoes of the disappearing local media?
For the past 12 years I have been focusing specifically on this area and have really felt the failure and spiraling down of the local press throughout the Western world — in North America and Europe heavily, plus Australia, New Zealand and Latin America. That’s been my primary concern. What we see is that we have lost a great deal, but we just can’t put our finger on it; we can’t quantify it. There is so much reporting that is not being done and communities are poorer for it.
David Simon, a past reporter for the Baltimore Sun and creator of The Wire on HBO, reported on this before Congress at a typical hearing that talked about regulation, potential regulation and antitrust. When addressing the lack of local watch dogs, someone at Congress argued, “The Huffington Post has hired a whole bunch of people.”
To which Simon replied, “Well, when The Huffington Post goes down in Baltimore, where I used to work at the Sun, and they cover city hall, and they cover the cops, I’ll feel better about it. Right now it’s the holiday for corruption in America.” And it absolutely is, but we don’t see the corruption because nobody is reporting on it.
As to who is filling the gaps, there is a little bit here and there. The most interesting gap filler is public media. In a place like Los Angeles we’ve seen the Los Angeles Times newsroom drop from 1,200 to 500. Meanwhile KPCC, a public radio station in LA, now has 100 people (most of them journalists of one kind or another) creating local content.
WNYC in New York, KQED here in San Francisco and I’d say another six or seven stations are seriously investing in local news. Importantly, public radio has the mission most similar to newspapers. Although they’re nonprofit, and newspapers are for profit, they have a service component to what they do and this has potential.
I know a lot of people in public radio and public media, and there’s a lot of frustration that they aren’t moving quickly enough, and they haven’t moved quickly enough to fill the vacuum. But they are one major place we should look to do more.
Ironically, Nikolay, you bring up podcasting. This whole idea of audio, audio-on-demand and radio are great ways to disseminate news. There are parts of the world such as in Africa, Brazil and Russia, where radio has long been stronger than print. Radio and audio-on-demand have great potential for delivering real news, and not just the news in two minutes, but longer reports as you’ve seen on public radio. I think that’s a huge frontier, and it doesn’t need to be limited to public radio. When we talk about how a local journalism company — whether it’s newspaper-based or newspaper-centric or whatever — tells its story, audio can be a major part of it.
Another thing to watch into 2017 is that there are three companies now, kind of mini-chains, that are each trying to innovate a new, online-only, city-based model. One is represented by Denverite, which comes out of Gordon Crovitz and his partners in Denver, Colorado. They hope that station to be the beginning of a 15-city chain.
Another one is Spirited Media led by Jim Brady in Philadelphia and Pennsylvania. The third one is Charlotte Agenda out of Charlotte and Raleigh, North Carolina. They are all very similar and have the spirit of the old alternative press, largely run by people in their 30s. They are online-only and they’re smart publications. The big question there is how much scale they can attain, and we’ll watch that into the next year.
In your recent article on the ten storylines we’ll be talking about in 2017, you said:
“Whoever figures out a similarly addictive behavior to reading the 2016 federal election news post-election gets bragging rights for reinventing essentially what can propel the next generation of sustainable news companies. National, local, it doesn’t just have to be news.”
There’s something very tempting in that proposition, especially when you say it doesn’t have to be news. Is this something that you can elaborate on? We talked about the corruption and the role of media in democracy, but there’s more to it, right?
There’s a lot more to it. That was a storyline number 10 – a bit of a wildcard. Last March, I wrote about The New York Times’ design of their smartphone product where I said they had reinvented page one, finally, for the digital era — finally meaning 2015/16. We now have a model for the age, where the desktop pages never really replaced print in a satisfactory or engaging way.
What I was referring to in that storyline is this: in this era of the most incredible presidential election in anybody’s memory, there was a little feature in The New York Times that showed the relative percentage points between Hillary Clinton and Donald Trump over the summer. I don’t have the actual numbers, but when I talked to people anecdotally they said, “Oh, my god, I check that like five times a day!”
Just yesterday there was a tweet from someone I don’t know, that said, to that same point, “This is a must-read for anyone teaching or learning about journalism in colleges. This is the new frontier, that you’ve got to figure out a way to encourage a new habit in reading.”
It’s all about habits.
In the old newspaper days, a habit was wonderful and we thought it was the “end all” of the world, which meant you read the paper once a day. With this new poll results feature the Times has created something that people can check throughout the day, creating a new habit.
There are other things that people can check such as sports, etc. The challenge is figuring out what a media company can provide that would get people checking over and over again in a smartphone product.
On October 24, 2016, The New York Times announced it was buying a little company called The Wirecutter for US$30M. The Wirecutter does the best reviews about home electronics on the web. Wirecutter is all about home electronics of any kind, small and large. I tweeted that I thought it was a very smart acquisition, because it will lead people to use their site much more frequently. Sweet Home is another one – it’s all about reviews for home-oriented products.
This is the kind of application that will keep people coming back to a site, because it’s providing an actual service. My challenge to publishers in that post, which I was thrilled to see picked up by a college professor, was, “Okay, stop whining about what you lost. What is it that you can create that’s an essential check-in for people today?” It could be news, but it’s more likely going to be information. There’s a wide frontier of what local media companies can do in terms of detailed information about their cities, about what’s happening all the time, about the history of their cities, etc.
There are apps like Detour that make unique GPS audio walking tours that could be harnessed by newspaper companies. It’s finding new essentiality and then mastering the product development that’s going to bring it to a new level of habit to the new news consumer.
That’s interesting, because we’re all familiar with the old phrase, “addicted to news,”
but this puts a whole different spin on it. Newspapers need to find ways to get people “addicted to fill-in-the-blank.”
The irony of that — and this is one of my other critiques of the business — is that the newspaper was always about much more than what happened yesterday in the city. That was relegated to the metro section which tended to be, a lot of times, the most boring part of the newspaper.
I came up through the feature section which contained content about how you take care of your family, how you deal with health issues, today’s weather and what’s on TV? Developed over the decades, newspapers served all these and more needs in people’s lives. Then the internet blew it all up. The weather page was once one of the most read sections. Today, we don’t need it or many of the other features we used to read because they have all migrated to the smartphone, outside the bounds of the newspaper app. And in a lot of cases, the newspaper app doesn’t even exist.
Newspapers can’t recreate that old world. But unless they do more for readers and citizens, the business is going to be tiny and it will continue to recede. To get more money you have to do more and you have to do more smartly. It doesn’t mean just doubling the number of stories you’re going to write.
Ken, you called for uberfication of news as the next big thing in publishing, referencing Fresco. In the past few years we’ve seen some growth in mobile journalism (mojo) – a new breed of reporters with a multi-hat role of researcher, camera person, director, editor, publisher, distributor, and marketer of multimedia content in real time. What do you think about these new forms of journalism, and their future in mainstream media?
I wrote about Fresco, and I think it’s a really smart operation. If you look at Fresco, the great use of it and the great interest in it is by local brands. So far it’s been the Fox regional stations that have used it almost uniformly and by themselves. Fresco is a really interesting example of young entrepreneurs, incredibly young, 22,24, figuring out how to take the friction out of a system that had too much friction in it for too long — meaning that there are people with smartphones everywhere that can take pictures and send them out to a central place.
But why it works, and why there is an ecosystem, is because there is a substantial local brand in the marketplace – in this case the TV stations that people know, which is a source of both aggregation and curation. It’s not using everything, but they’re curating with what they think is useful, and has the power of presentation, both on the air and online.
“I really do think, so sadly, they [old brands] are committing suicide.”
I think it’s that dynamic balance with something like Fresco that makes it work. I visited the guys that put that company together in downtown New York; and why it works is that you don’t really need to be a journalist.
I chided them in the column about calling their people “citizen journalists”. They’re not really journalists, they’re picture takers. They can authenticate the picture, but they’re not adding an interpretation other than where they stand and take the shot.
Do you see the industry trending towards entrepreneurial mojos, working directly with distribution channels and platforms, reducing the need for traditional publishers as we know them today?
No, for a number of reasons. Journalism is a skill, and while there are people outside newspapers that know how to write, interview and report, they are relatively few and they’re not going to do it haphazardly for a US$50 payment here and there. I think that kind of thing is very useful, but it’s very limited.
And this question of brand is still hugely important locally. I don’t see any kind of scenario where people just randomly look to Facebook or Twitter for news that has no brand identification about who is certifying local information. I don’t think that’s the world that people really want. The problem has been, of course, the local media business model.
In the TV world, we believe in companies like the new Scripps and others that have been consolidating and investing in digital technology and digital journalism. There may be enough money in a city for one or two substantial news operations that can become broadcast and digital. But they believe that the brand is very important there.
Similarly, the news brands that can manage that transition (and that jury is really out) they have a lot of power. One of the ways that tronc, Inc. board chairman, Michael Ferro (who I’ve criticized in a number of ways over the years) has been very smart is that he saw the potential in Fresco, “Well, you don’t have to be a TV station to use Fresco. If we use Fresco in Chicago and Baltimore and Hartford, we could be a source of a lot of news video online.”
I think he had it right, but he has so much other stuff wrong that it kind of overwhelms his plans. I think there are great applications there, but they’re going to be through a local brand.
Does this theory hold true even for the younger generation that doesn’t necessarily have the emotional connection with a brand? I have a 20 year-old, and we’re in a market that is dominated by two newspapers that are owned by the same company. He’s aware of them, but he doesn’t trust them and ranks them no higher than any of the local bloggers or news his friends shared on Facebook.
It’s a fascinating question. I go back to the alternative press of the 70s and 80s, which developed out of quite similar circumstances of daily newspapers not serving a need with the younger populations. Your situation there in Vancouver and in Canada is truly amazing with the — and I hesitate to use the word — ‘power’ of Postmedia and the monopoly that it has. And yet, it is wasting away as a company.
“You’ve got to get to the point where you have a majority of your revenue being from readers by supplying quality content through really good digital products.”
That’s why we’ve seen this tremendous development in the last 18 months of those smartphone and locally-based chains in Charlotte, Pittsburgh, Philadelphia and Denver. Those businesses are getting really good traction and are all aimed, not quite at your son at 20, but at people in their mid-twenties to late thirties who want a voice.
All of these companies also have journalistic sensibility. That’s why we’re seeing this level of interest while old brands are just fading away. I really do think, so sadly, they’re committing suicide.
There is the desire for some kind of organization — perhaps Facebook Vancouver. Maybe Facebook does it, but I don’t think so. I think there will be others who will try to organize around a local brand, and we’re just starting to see that happen now.
Last year we talked about 2016 being the year of platforms. We’ve just finished a year with Instant Articles and there have been both outcries and few of praises about Facebook and its tweaking of its algorithms. What’s your take on where Instant Articles are going?
I think that the year of the platform has been fairly dissipated. I talk to a lot of publishers and metrics companies that work with publishers at the top of the food chain and who have the ability to see what’s going on with traffic across titles. If you look at Facebook, with all of the publicity that has happened over the last year, especially with Instant Articles and other programs, the traffic impact of what they have done, with all these changes, is negligible.
Overall, the amount of traffic that most news publishers get, national and local, from Facebook has not changed much from a year ago. What’s up is Instant Articles at about 10%, while newsfeed traffic is down about 10% because of the algorithm changes there. The social sharing that people do themselves is about the same. The Facebook Boost program where publishers essentially buy views/links, that’s about even.
This has not been a huge year of change in Facebook, and Facebook is by far the biggest phenomenon out there. I think publishers that have the business intelligence and data analytics to actually figure it out, recognize that social is very important for continuing to feed the top of that funnel with new, younger customers. They believe that’s very important. But they also know that only a small percentage of those people are going to become really engaged readers and paying subscribers.
I think it’s getting clearer and clearer that in terms of how social platforms should be used, it is really a resource allocations decision. It is imperative for news brands to keep their identity and for people to understand that what they are offering comes from that news brand. It doesn’t come from Facebook, just like it didn’t come from Yahoo, even though they were doing a distribution deal ten years ago. Publishers need to really emphasize the quality and the trustworthiness of their brand.
It’s also a resource allocation decision when you compare investing in other technologies and communication strategies such as podcasting, VR, video or newsletters (which can have an incredible open rate that leads to a lot of engagement). The comparative investment there then becomes a fairly simple question, “How much more effort and money do I want to put into working with Facebook, or Snapchat, or Twitter? Because I have a sense of what that ROI is in terms of my reader return, compared to putting more into newsletters, or podcasts, or video.” I think increasingly that’s how publishers need to look at it.
They need to do it from a very reasoned, datacentric point of view, and not by moving from one alarm to another, thinking: “Oh, my god, we’re late on video;” or, “Oh my god, VR… what are we going to do?” or, “Oh no, Facebook’s eating the earth; do we even need our own site anymore?” It’s a matter of stepping back, understanding who you are, and running your own business.
Google AMP was getting some good reviews when the first set of results started coming in. But there appears to be no successful monetization strategy for mobile as of yet. Are you seeing anything out there that you feel is on the right track in terms of addressing the mobile advertising challenges?
Yeah, I think there are. Mobile advertising is the fastest growing type of advertising in the country. There are models that work, but local newspaper companies, again, have been late to the game. The most successful models I have seen are ones that are coming from national companies that have moved strongly into branded content, native advertising, and use the smartphone as one platform for that content. They’re selling audience and they’ve got the analytics that show the audience they’re getting, including the segments on the smartphone and rate they’re paying for it.
Publishers need to have the insight into their audience and they’ve got to sell audience, not the device. They need to know where their audience is using the smartphone and when. The display and use of branded content obviously takes an agency-like approach, but when done properly these kinds of ads are getting really good rates in the $20-$40 range.
If most of those doing this are national companies, why aren’t regional companies investing here?
They’re still stuck doing old-fashioned (it feels funny to call it that), but old-fashioned digital display ads. Digital display is basically selling space for an ad – the part of the internet business that is now declining the most rapidly. In terms of advertising on a smartphone, it requires a different kind of sponsorship-sell or native advertising-sell in order to engage with an audience that is partly using the smartphone. Those pieces have not been put together by many local media companies.
The other thing about smartphones that I think is really important is the whole movement to- wards reader revenue. There is never going to be a time that any of us can see when newspapers are going to regain the kind of dominance they had in advertising. It’s why I’ve written so much about how imperative it is to depend more and more on readers who are a more stable source for the majority of revenue. The companies that are closest to transitioning – The New York Times, Financial Times, The Wall Street Journal and The Washington Post — are moving this way. On regional levels, a few papers like The Boston Globe and the Star Tribune are moving this way. The national papers are close to 60% reader revenue; regional ones are getting close to 40-45%.
You’ve got to get to the point where you have a majority of your revenue being from readers by supplying quality content through really good digital products. Take the example of The New York Times’ habit-forming Clinton-Trump poll. If you can make yourself essential enough where you have a check-in function on the phone – some national news media do it, but very few local ones do – then the main monetization of that smartphone in this mobile revolution is reader revenue. Advertising revenue, secondarily, will come through native advertising and sponsorship.
Last year your advice for publishers for 2016 was all about them investing in business intelligence/analytics. You outlined the case for it just in the past couple minutes talking about how that leads to establishing a sustainable monetization strategy for mobile. If you were to add one other piece of advice for publishers in 2017, what would it be?
I would tell them to please listen to 2016. It’s so fundamental to everything that’s going on, and I really believe that if you don’t have your business intelligence operation strongly in place at the center of your local media operation by 2020, it’s a recipe for disaster. It is literally moving that fast.
This year I would add smartphone product development to the whole push on business
intelligence and analytics. Mobile accounts for 55-60% of all usage now, likely growing to 75% by 2018, which is why the entire news thrust, presentation, creation and thinking should be smartphone-first – not digital first, but smartphone first. The desktop is fading fast, especially for younger populations, but also for all.
I’ve written that the desktop is the new print, and you can see that in terms of its usage and the great drop-off in advertising already. So it’s really smartphone-first product and business development pervading the thinking of news organizations.
I’d probably put it in the order of smartphone, print, desktop, and tablet at this point. If I were going to develop a product, it would clearly be smartphone-based because of the usage. Then you’ve got to look at what it is that each other media do uniquely well. Print does things very well, for some people right now, and obviously most of the money’s still tied up in print.