Saturday, February 26, 2005

Fee, fie, faux self-flagellation

Our mightiest newspapers turn into fumbling klutzes when they write about the industry's drooping credibility, swooning circulation and eroding advertising share.

Inevitably and embarrassingly, they fail to address these problems with the rigor and intellectual honesty they typically train on topics that don't directly involve their economic self-interest. Coincidence? Perhaps.

Instead of dealing forthrightly with what ails it, this introspectionally challenged industry over the years has developed a highly stylized form of faux self-flagellation. It goes like this: Editors and publishers wail that they have a problem, flail themselves for needing to fix it and then sail ever closer to the edge of the world without changing a damn thing.

Recent outbreaks of Faux Self-Flagellation Syndrome were observed in San Francisco and Washington, D.C. This tale of two cities is also a tale of two guys named Phil. You can't tell the Phils without a scorecard, so here goes...

Phil A, the Phil of the first part, is Phil Anschutz, a man determined to make a small fortune in the newspaper business by starting with a large one of $5 billion, give or take. Phil A is said to be reclusive, because he isn't doing a reality show like Martha or Donald. I just think he's out of sorts, because two-thirds of his former net worth was wiped out when the Bubble erped.

Phil B, the Phil of the second part, is Phil Bronstein, a former globe-trotting, pistol-packing, once-nominated-for-the-Pulitzer Prize journalist who achieved early fame in San Francisco for breaking the ankle of a political hack he sucker punched during a lively discussion at his newspaper's conference table. Phil B gained later fame as Mr. Sharon Stone when he was bitten by a Komodo dragon while tiptoeing through its cage at the L.A. zoo. More recently, he appeared in a series of TV commercials, where, playing the role of editor of the San Francisco Chronicle, he vowed, once and for all, to make the city safe for gourmet dining. Did I mention that Phil B actually is the editor of the Chronicle, the nation's 11th largest newspaper?

Phil A and Phil B wound up on a collision course when Phil A last year bought the San Francisco Examiner, where Phil B previously had been editor. Phil B moved to the Chronicle in 2000 when his employer, Hearst, bought the Chronicle. Still with me?

Since buying the San Fran Ex, Phil A has been operating the newspaper as a free tabloid, challenging Phil B and the Chronicle for readers, if not advertising market share. Encouraged by the rising circulation of the unsolicited free newspaper he dumps at a growing number of high-demo homes in the city by the Bay, Phil A decided to take his show on the road, launching a new giveaway tab in Washington, D.C.

The appearance of the upstart Ex on its doorstep inspired the Washington Post to mobilize a correspondent to look into the state of the newspaper business. Following is the lead paragraph of his penetrating findings:
The venerable newspaper is in trouble. Under sustained assault from cable television, the Internet, all-news radio and lifestyles so cram-packed they leave little time for the daily paper, the industry is struggling to remake itself.
In comments buried in the predictable yadda-yadda of this article, Phil B improbably became the first editor of a major American newspaper to effectively endorse not only the free distribution of the print product but perhaps its outright abolition.

"I could argue pretty forcefully," quoth the Post quoting Phil B, "that the free model and the non-newsprint model is what we're looking at in the future."

The comment is remarkable not only for Phil B's boldness but also for the fact that his embrace of the free newspaper model is not mentioned at all in the lengthy story on free newspapers that ran in his own (not-free) newspaper just days before the Post article. What was good for the Post, evidently, wasn't worth a gander for Chronicle readers -- or advertisers.

Will all due respect to Phil B, we don't have to stop the presses just yet. Newspaper executives can save the industry if they quit trying to preserve, protect and defend the comfy mass media business model that has carried them into the handsome offices, salaries, stock-option plans and retirement accounts they enjoy today.

The one-size-fits-all media model, which was great while it lasted, won't work in a multichannel, multimedia age of instant communications and nearly infinite choice. It needs to be replaced. Newspapers, like other legacy media companies, now have to learn to efficiently capture audiences where they find them by creating smart, new, media-agnostic products that leverage their prodigious brands, market strengths and advertising relationships -- while they still have them.

This is not tinkering. This is radical change that will cost time and money and likely lead in the near term to lower profits and, most likely, lower share prices. (You could argue that a truly rational market would applaud a strong strategic initiative, but that's probably hoping for too much.)

The problem is that the smart men and women who run newspapers -- even the ones who, like me, have journalism degrees -- can read their bonus plans and do the math. Senior executives are not going to take the radical steps necessary to save their institutions until enlightened investors adjust their expectations -- and modify executive compensation programs to protect the innocent.

Until everybody gets real, the newsrooms, the suits and even the stock market will continue dancing around the frightening, festering story that dares not speak its name.


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