Business of News: As Consumers ‘Tidy Up’ and Bundle, Publishers Must Rely on the Strength of Local Journalism

If you want to understand how to save the newspaper business, start by moving out of a house you have lived in since 2000.

I did that recently. In addition to piles of clothing, decorations, furniture, pots and pans we no longer need, I found myself making the “toss or keep” decision on hundreds of CDs, Blu-Ray discs, DVDs or—yes, even VHS tapes and music cassettes. (Thankfully I had gotten rid of the 8-track tapes in a previous move.)

I paused as I tossed one last boxed set from Steve Winwood that I purchased around 2001 for about $75. I can stream every song he ever recorded as an individual or as a member of Blind Faith, the Spencer Davis Group or Traffic on one service for about $10 a month.

As I continued to dump thousands in movies and music, I comforted myself with the mantra, “I can stream it. I can stream it.” The shift in media in less than two decades is profound. Any movie, song, game or TV show you want you can stream.

The question we all face in the newspaper industry is how to compete in a world in which the chief competitors—entertainment companies and technology companies—have collaborated and adapted to the new world. Journalists still celebrate incremental changes in our technology approaches to advertising and news content, but let’s be honest, the competitors are PhDs while we are in high school when it comes to this stuff.

Not only do these competitors perform better in the technology world, they often take our greatest asset—local content—to drive audience and profit for themselves. We must stop that content rip-off if we hope to survive.

A group of new executives are trying to fight the power. They are working in the halls of Congress to stymie the supremacy of the Silicon Valley tech giants whom they feel have merely created better delivery technology and rely on our news content. It’s an awkward position for publishers to be in—lobbying those in an effort to save the industry while at the same time trying to provide disinterested coverage of all of their votes. But their only hope is to work together and walk the line between lobbyist and news executive.

As an industry, we must put all our energy into this effort while the technology companies have never been less popular or weaker politically in Washington. Their technology expertise is so far greater than ours; we will never catch up, so we must play our strongest hand—journalism. There is a place for us.

The major moves in the technology and entertainment world involve bundling what consumers want—entertainment, such as music and movies, gaming, and broadcast stations. The world we will see in the next few years will be populated by a half-dozen bundlers. Some will offer their own content and others will aggregate content. But the ease for consumers will be great. Stream any kind of information or entertainment to any device you own and pay one price.

What the bundlers are missing is good local news content. Only Apple News has made a serious effort to combine serious journalism from major organizations. The others have been content to take our content and offer us a few pennies. That model will starve us to death.

For the good of the nation, newspaper company owners must convince Congress to regulate the monopolistic practices of the large tech companies and create a free-market approach to bundling that allows news organizations to be paid fairly when their content is distributed. This is critical. The world of bundling will make it difficult for many individual paid content sites—such as the ones provided by local newspapers—to survive in the decades to come. Consumers will want to pay one price and find local news elsewhere.

Making deals with the bundlers to offer our content leaves major portions of the distribution to them and the content to us. A similar battle is already being waged by the movie companies and musical artists who saw their distribution methods disrupted by the streamers. At first, they fought back. But now the smart ones are clinging fast to their artistic property and allowing others to handle distribution. 

Tim Gallagher is president of The 20/20 Network, a public relations and strategic communications firm. He is a former Pulitzer Prize-winning editor and publisher at The Albuquerque Tribune and the Ventura County Star newspapers. Reach him at tim@the2020network.com.

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2 thoughts on “Business of News: As Consumers ‘Tidy Up’ and Bundle, Publishers Must Rely on the Strength of Local Journalism

  • November 22, 2019 at 7:52 am
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    “Find local news elsewhere”?
    The overwhelming majority of all cities and towns in the USA are small, and they are covered by only one news outlet: the local daily or non-daily newspaper. In most places in the USA, there is no “elsewhere.” Having lived in New Mexico, you know that.

    Reply
    • December 5, 2019 at 10:57 am
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      Well, yes, they can find local news in New Mexico on three local televisions stations that still are viable, and a handful of local bloggers.

      Reply

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