Media Industry Changes Reflect Broader Economic Change

Here’s a talk I gave to the Mary Our Queen Men’s Club meeting Monday night.  I tried to address how the business shifts that we are seeing in the news and media industry are reflective of those being felt across many different industries.

This is clearly completed thought.  There are many more thinkers who would do a much better job presenting these thoughts.  But, I hope my remarks open people’s minds and got a good conversation going.

Media Industry Changes Reflect Broader Economic Change
by: Chris Sweigart
February 16, 2009

As many of you may have noticed, the news business is going through a lot of changes lately.  The concept of change might be familiar to a lot of you.  “Change” has become the mantra of social, business and political life lately.

There’s a guy who became one of the most powerful men in the World advocating an idea called “change”.  His name is Barack Obama.  Maybe you’ve heard of him.

Whether or not you agree with the changes Obama promotes, you can’t deny the seismic shift we are all seeing in our industries and businesses.

While the recent economic downturn has brought a lot of heartache, pain and loss (in the news business we use the cliche “tough economic times”), it has also opened the door for innovation in almost everything that we do.

In the news business, we have seen a dramatic shift in the way news and information is collected, and more importantly, distributed.

Every month, every year that goes by, fewer people get their news from television station (like mine) and even fewer are getting the newspaper delivered to their front doorstep.

Maybe I’m different from many of you, but I cannot tell you the last time I held an actual hard copy of a newspaper in my hands and I work for a company that owns 85 daily newspapers, one of them being a pretty big one, USA Today.

I can also tell you that I rarely watch the local news on television.  And you’ve probably heard that I work at a television station, IN A NEWSROOM.  Can you believe that?

Based on that information alone, many of you may assume that I’m a pretty uninformed guy.  I probably have no idea what is going on in the World around me. But if that’s your assumption, I’m hear to tell you, you’re wrong.

I consumer more information on a daily basis than many of you could possibly imagine.  My days are inundated with updates from news and information providers from all over the World.

I don’t have to tell all of you where I get this information.  You already know the answer.  I get it from the Internet and it is all delivered directly to me at my computer and on my Blackberry, with out me paying a penny for it.

Now, a lot of you have probably heard this kind of talk before.  The Internet is going to change everything.  I’m sure you get it.  But, let me tell you how the Internet is changing the news business.

In the old days (like 10 years ago) newspapers and television stations were able to connect communities by gathering and delivering relevant information.  We enabled the communities to share information.  We did this by gathering, sorting and delivering news, information, entertainment and advertising through the mass distribution of our broadcast signals and our printed products.  We made a lot of money doing this because there were very few competitors and the barriers to entry were very high.

But, today, we’re facing a very different World.  No longer are the barrier entry high.  For about $100 a year and a little bit of time, somebody… anybody can start their own news organization online.  The number of people who are directly competing with large television stations and newspapers, traditional news outlets, is growing exponentially every day.

Granted, for $100 a year, this guy is not going to be able to put nearly as many people on the street as we can and he’s not going to turn out the volume of content that we can, but there is something he can do very well, that we, the big media company, can’t necessarily do: He can serve a niche.

Odds are many of you have a hobby or a very particular business.  It is something you are passionate about.  It is something you know a lot about.

Let’s assume for a minute your REALLY interested in fly fishing.

We all know there are tons of magazines, websites books and guides all about fly fishing, right. My company, Gannett, may publish one of those magazines.  If you’re into fly fishing, there are probably a ton of information sources out there, just for you.  Well, maybe?

Let’s narrow it down a little bit.  Let’s say you’re really interested in fly fishing, but only in North Georgia, because you don’t have a lot of time or money to take exotic fishing trips to wherever fly fishermen dream of going.

If you’re like other hobbyists you probably keep a pretty good journal of where the good fishing spots are and at what times of year the fish are biting.  Maybe you keep track of which flies are the most successful and which ones really don’t work.  If you really think about it, there’s a lot of useful information there, if you’re into that kind of thing.

So, let’s say you take that information and you start your own North Georgia Fly Fishing blog.  You start writing about your experiences.  For a little while, it’s like your own personal diary, because not many people have found your blog online yet.  But one day, you meet a fellow fly fisherman and you get to talking.  You share your experiences with each other.  Then, at the end of the conversation, you tell him you’ve posted a lot of stuff on your blog.  You give him the address and go your separate ways.

Some time later, you login to write your next post, and you notice that you might have dozens of comments about that stream you wrote about last time.  Turns out that guy who met on your last trip had a fly fishing blog all of his own and linked to some of the things you wrote about.  So, a lot of his readers are now reading your posts and information is being shared back and forth.

This is where the cracks start to show in large media companies, like mine.  In the past, our entire business model has been focused on serving mass audiences.  We produced content that was acceptable across all demographics.  We wanted “hits” that drew huge audiences so we could sell advertising at huge rates.  We would never spend the money or the time to produce content focused on such a niche as North Georgia Fly Fishing.  The margins just weren’t there.

But today, the consumer does not have to accept whatever we’re feeding them.  The consumer can leave us and find greener pastures that more closely suit their interests and needs.

This revolution is being made easier by the advent of e-mail, Google, and social-networking sites like MySpace and Facebook.  Those companies allow people to connect with each other and share relevant information, often circumventing the “big media” all together.

Google has been particularly successful at reaching their goal of “organizing all of the World’s information”.  You know how it works.  Just go to Google.com, type in what you’re looking for and less than a second later, it’s right there in front of you.

The important lessons of this for my business and perhaps yours, are these:

1. We should identify what are strengths are.  Which consumers do we serve, or do we want to serve, really well.  We should find our niche, and be dedicated to serving it.  And when we find guys that write about North Georgia Fly Fishing, we should direct interested people to him, not try to ignore him or worse, try to do better than him.

2. We should join the conversation.  Notice, I didn’t say we should start the conversation.  Odds are, the conversation has already started, we just haven’t found it yet.  By joining the conversation, we are meeting our consumers where they already are and instead of talking to them, or at them, we are talking with them.  And perhaps most importantly, LISTENING to them.  Remember the old saying “the customer is always right”?

Over the next several years, there are bound to be unfathomable changes to the my business and all other business.  New books will be written on economics that throw many of the old rules out the window.  And, I’m willing to bet that we’ll all be smarter, richer and happier because of it.