Friday, March 06, 2009

What We Can Learn From Newspapers

Shelf Awareness (SA) advertises itself as "daily enlightment for the book trade." It is primarily a newsletter for booksellers and people like me who are interested in what booksellers are experiencing.

Yesterday, SA showcased both sides in the free ebook debate. You need to subscribe here to read it.

In one corner, the Chief Operating Officer of a bookstore described Thomas Nelson's new NelsonFree program as "offering the trifecta, the compass that will guide the market."

On the other side, an author said:
Nelson's offer of free e-books as a bonus to the purchase of a book is like a carcinogenic snack. It undermines the established logic of pricing . . .

Surely book publishers can learn from the newspaper industry's bad tactical decision to offer their content free online. When a large sector of their paying content consumers went online, the newspapers tried in vain to assess an online subscriber fee. Consumers don't like paying for what had been free.
IMHO, the author completely missed what the newspaper industry's dilemma taught us.

Newspapers were slow to respond to the digital age. And the vacuum they created was quickly filled by lots of new players.

Newspapers report the news. Newspaper publishers were able to keep the price of the daily paper low because they were supported by advertising dollars.

Readers migrated online NOT because news was free; they migrated because the news they found there was more immediate and up-to-date than what a daily newspaper could offer. When I used to open my newspaper at 6:00 AM, I was reading the news as of six hours earlier. Today when I open my laptop at 6:00 AM, I am reading what has happened in the last hour.

Of course, once the readers shifted their locus, those advertising dollars followed them online.

I've told this story before. Last month, following my surgery, I was not permitted to drive. Since my friends and loved ones all work for a living and were not available to chauffeur me around during the day, I decided to advertise for a driver. At 9:00 AM on a Monday morning, I went online and, within fifteen minutes had posted my ad on Craig's List. Within three hours, I'd had 33 responses. That SAME afternoon, I took a test ride with the college student whose email I selected from the group of responses.

There is no way my local newspaper could have competed with that immediacy.

As I mentioned earlier, to compound the problem, lots of new players came on the scene. The news reporting industry decentralized as individuals began to jump in with their first-person accounts bolstered by cell phone photos of events in progress. Social networks like Twitter are only too happy to pass along news as it occurs.

Way back in April, 2006, I did a post called "Are You Infected" here. The point of that post was to talk about the viral fashion in which information is communicated on the Internet. I likened it to the spread of disease described in Bernoulli's disease propagation model:
Bernoulli postulated that an epidemic begins with an infected host. The host comes in contact with other persons. Those persons will either be susceptible to the disease or resistant to it. Those who are susceptible become infected; those who are resistant do not. The newly infected persons then go off to interact with a new generation of people, and the process is repeated again and again, spreading the disease.
Again, it's tough for an industry that depends on correspondents getting to the location in order to report the news to compete with that immediate local "reporter" who speaks the language, knows the people, has his own cell phone camera and a social network only too happy to "publish" his news and spread it.

A couple of weeks ago here, I quoted an op/ed on the newspaper industry that said the "challenge for papers today is to determine what content readers will value enough to pay for it online."

If newspapers cannot compete on reporting the news, maybe they should sell different content . . . in-depth analysis, popular columnists, etc.

Newspapers ignored (or more accurately, "dithered over") the growing crisis they faced for too long. My personal belief is they were so confident of their "professional" status winning out against "amateurs" that they didn't take action. By the time they began to shift their focus, they were already fighting a losing battle.

If you want a parallel to the book publishing world, that unwitting arrogance is where you need to look. The Big Six publishers are so confident of their dominance in the industry, that they are failing to adapt to consumer's changing habits fast enough or dramatically enough. Unless they begin to "hear" their customers and meet those customers' needs, they are going to find competitors popping up all over the place, willing to offer what they refuse to give.

There are publishers who are adapting. I've written about Thomas Nelson and Harlequin previously. Although on the surface they are very different (Nelson is the world's largest Christian publisher and Harlequin is the best-known romance publisher), they share some similarities. First, they own a specific corner of the market, their niche, if you will. But they've also shown a remarkable willingness to think outside the box--trying new initiatives and abandoning industry truisms. And, finally, they listen to their customers and pay attention to what they learn.

I had a friend who opened a store about ten years ago. When I had the time, I'd go over to help him. I quickly noticed a worrying dynamic. Customers would come in, asking for a specific item, and he would try to convince them to buy what he had in stock . . . which was MUCH more expensive. Over several weeks, a lot of potential customers asked again and again for the same item. When I asked why he didn't put in a supply of what they kept asking for, he told me that HIS product was a much better one.

Six months later, he closed the shop.

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