It has been just over a month since Hunter Clauss and I relaunched the Center Square Journal. As I expected, Hunter has turned out to be a helluva writer and editor, helping to make CSJ into a great news product that more and more people in Chicago’s Lincoln Square, Northcenter and Ravenswood Manor neighborhoods read to keep up with their community. Our readership is growing and CSJ is gradually becoming part of people’s regular media diets.
Hunter’s talent and ability has allowed me to almost totally focus on the business side of CSJ, which is nothing less or more than sales, sales, sales. No, we are not breaking even yet – and I’m not taking any money from the business either–but I am making inroads and learning a lot.
As I’ve been making my sales calls, a few thoughts about news media have crystallized for me.
1. Sales work exposes the flaws and reveals the true value of a product.
This is a “duh” statement for anyone who has spent a day making sales calls (or knocked on doors for a political candidate) but it needs to be repeated since it is the bedrock of everything I’ve learned in the past month.
In the context of news media, I believe that most of the public dialogue about news has conducted by journalists and those with journalist tendencies. The result has been too much discussion about ethics and mission and not enough about product and what consumers–advertisers as well as readers–really want.
When you repeatedly talk with potential buyers of your product you experience a fiery crucible that reveals what’s good about your product and what is unneeded. For CSJ I’ve learned the true value of local, local, local. Advertisers desperately want a channel to talk to the customer around the corner. We do that very well at CSJ. So now we focus on that and little else. You will never again see a story in CSJ that could reasonably appear in any other publication.
2. News media is a product, not an art. It should not be romanticized.
Again, I think because journalists conduct most of the public dialogue about news media there are too many people who dreamily recall cigar-chomping men hammering out stories on manual typewriters while wearing bad hats. This is a dangerous habit. You should run from these people as if they have the plague.
To cite Bill Wyman again, newspapers and TV news have thrived on the predication that they provide direct access for advertisers. Those days are gone. Despite zillionaires buying the Chicago Sun-Times, Chicago Tribune, New York Times and Wall Street Journal with no clear business model, the rest of the news world needs to keep a clear focus on figuring out where the money is in this business.
This does not mean news media should become nothing but TMZ and Huffington Post. Those are excellent products – in the same way McDonald’s hamburgers are an excellent product. Discussions about news media need to begin with the question, “Who are our customers and what can we charge them?” before anything else. Otherwise you invite large scale money hemorrhaging and eventual bankruptcy.
3. Brand value is everything in news media success
Unlike a Mercedes-Benz or a McDonald’s hamburger, news media is an intangible product that requires long-term consumer interaction to obtain a consistent identity. This is a tricky business that requires clear thinking and vigilance on the part of editors, publishers and sales staff to ensure readers and advertisers are getting the same value messages.
For instance, for CSJ I realized that while readers may value the local focus of our publication, so do advertisers–and so I made it part of my sales pitch. Hunter and I talk about what kind of stories we should be covering and I tell prospective advertisers about those decisions. I believe this conveys to them that if they advertise with us, they become part of a publication that provides clear value to the community–just as they do with their own products and services.
The brand value for CSJ readers and advertisers is reliable, high quality, hyperlocal news. This means clear writing, no opinion, hard news that stays strictly within our coverage boundaries. For instance Hunter and I recently discussed whether we should write about openly gay State Rep. Deb Mell’s engagement announcement. In an age when most news consumers click through four or five publications a day as part of their news diet, we decided that while Rep. Mell represents a part of our coverage area, hers was a statewide story thoroughly covered elsewhere.
What else could we write about that day? The Food Network taping a show in a neighborhood bakery and a local alderman’s reluctance to vote in favor of allowing Wal-Mart to expand in Chicago. Nobody else wrote about those things and we think we brought more value to our readers and our advertisers. Local news, local readers, local advertisers.
4. Large media organizations are caught between a need to lower prices, a reluctance to eliminate outmoded, expensive media structures and unclear brands
This is important: While Hunter is drawing a salary from CSJ, he is far from getting rich. And I am far from getting paid. We are pouring in our own sweat equity with the hope that we’ll eventually create something sustainable.
This is exactly what Steve Jobs and Steve Wozniak did with Apple. What Henry Ford did. Hunter and I are building a new business in the proverbial garage. It is cheap and we have no legacy expenses. It is a tremendous competitive advantage in the news business: We have no shareholders or lenders monitoring our revenues and it provides us with tremendous flexibility with our product and with pricing.
From what I hear from people inside large media organizations and from my own outside observation it seems that leaders at companies like the Chicago Sun Times, Chicago Tribune, the New York Times and the Wall Street Journal know they have not yet hit the floor for advertising prices. Yet they are also reluctant to really cut away at their companies–and they still have not identified their brands.
And no, I don’t think news organizations have made the real cuts yet. ABC News’ 25% layoffs this past week and plan to create “digital journalists” seems to be the right direction. A few years ago I read about Brazilian TV reporters who would carry small Digital-8 cameras, shoot their own footage, do their stand-ups using tripods and then edit the footage themselves. Yes, it probably looks less polished, but in the YouTube era I think we can expect news consumers to accept rough edits and poor framing in exchange for more news choice.
As for brands, I am puzzled why the New York Times and the Wall Street Journal are preparing to engage in a local news war. If is this where the advertising is, then Carlos Slim and Rupert Murdoch should invest their billions in tabloid newspapers and slim down the Times and Journal to staffs that can be sustained by their national coverage.
Locally, I can’t for the life of me figure out what the Tribune and Sun-Times are supposed to be. A brawny city news tabloid for the Sun-Times? A publication of record with “higher end” reporting for the Tribune? Then why does the Sun-Times still pay Lynn Sweet? Why does the Tribune have a tabloid edition and a broadsheet? Pick a direction, slim it down. Go through the crucible.
5. Revenue is the cheapest kind of money.
It’s not a new saying, I know, but I most recently heard Linda Darragh, Director of Entrepreneurship Programs at University of Chicago say it at March’s MIT Enterprise Forum here in Chicago. She said it at the end of moderating a discussion about the value of obtaining investors versus bootstrapping a new enterprise.
Almost every successful enterprise (biotech excepted) has had a period of bootstrapping where the concept was proven out by making sales. Successful sales can make an enterprise more attractive to investors–but it also alleviates entrepreneurs from the pressure of investor payback concerns.
And as I said in Point 1, going through the sales process helps you determine what works and what doesn’t.
Those who want to create successful news media enterprises should begin not with the question, “Where do I get investor money?” but, “How am I going to make money?”
If you can’t provide the answer to that question, no amount of money from the Knight Foundation, Carlos Slim or AOL.com is going to save you.