Is it time to call the butcher?
In the keynote yesterday, Robert Picard made an amusing (and very apt) analogy between the life cycle of a dairy cow and the newspaper business. The title of his talk may sound dry and academic, but he gave one of those rare presentations that combine cogent and useful conclusions with entertaining delivery.
“When the cows get older, they produce less milk.” Newspapers are a mature industry; their markets are stagnant (and declining). Income from the print side will steadily decrease over time.
Less than 10 percent of Internet use today involves news, and most of that is reading headlines at the aggregators’ sites.
Five trends discussed:
- Erosion of audience base (and the audience is what you sell)
- Erosion of advertising base
- Online and broadband capabilities (and mobile devices)
- Employee morale has eroded and stress is rising: Content creation requires staff who want to work and who see a future in the business
- Owners of capital see greater opportunities for growth elsewhere
So the aging cow is now being squeezed hard. Shareholders and boards of directors don’t care if they ruin the cow’s ability to produce milk. As all dairy farmers know, no cow is able to produce milk forever. That’s just a fact of nature.
Newspapers hate failing — at anything — because they’ve had 200 years of success. Innovation requires failure. So (you guessed it) newspapers have always been slow to innovate. And I would add that they innovate VERY incrementally, not wide-scale, and rarely holistically.
I didn’t get a photo of this slide, but I think I can describe it adequately. Picture a green line that slants upward from left to right. Overlapping it, picture a red line that slants downward from left to right. It looks like an X, stretched out horizontally. The green line is online revenues — which are ascending as print revenues (the red line) are descending. The key is where the two lines cross. At that point, the newspaper will be earning much less than it used to. But to benefit from the still climbing online revenue stream, the organization would need to maintain staffing levels — to continue producing good journalism products.
But squeezing the old cow means you slash staff and budgets.
Journalism is not a dairy cow, you see. But the owners of large news organizations are treating it like one.
Picard is Hamrin Professor of Media Economics and director of the Media Management and Transformation Center, Jönköping International Business School, Jönköping University, Sweden. This spring he has a fellowship at the Joan Shorenstein Center on the Press, Politics and Public Policy at the Kennedy School of Government, Harvard University. The title of his keynote: “Cash Cows or Entrecôte: The Influence of Interdependency on Physical and Virtual Newspapers,” presented at the International Symposium on Online Journalism. Picard has written numerous books about media economics.
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Categories: ideas
[...] G. Picard impressed me as an awesomely smart person when I first saw him speak at a small online journalism conference a few years ago. Later I found out that he’s [...]