By DIANA HALL
Newspapers that layoff journalists to survive massive changes in the industry are making a mistake, says the author of a new study that applies a Harvard business professor’s theory on disruptive technologies to the news business.
David Skok, the managing editor of Globalnews.ca, told Ryerson journalism students and faculty members that quality journalism is invaluable because it results in in-depth stories that matter to consumers.
“Time and again, I witnessed once-mighty news organizations tackle revenue challenges with cost-cutting measures. These measures, in turn, have worsened the revenue challenges, putting us in a downward spiral that is sped up exponentially with the advent of new disruptive technologies and increased competition,” Skok said during the Nov. 12 presentation organized by the Ryerson Journalism Research Centre.
Skok said the Toronto Star, with its unique, reliable investigative reporting, is one of the only successful attempts by major Canadian newspaper to exploit potential niche opportunities.
Other news organizations, he noted, have adopted different strategies to survive. Forbes, for instance, responded to challenges to its business model by using its powerful name brand to attract knowledgeable analysts on subjects of particular interest to readers, as opposed to relying on a roster of staff reporters. These intellectual contributors triggered a loyal readership following.
Skok’s presentation, “Breaking news: mastering disruptive innovation,” was based on a report he co-authored with James Allworth, a Harvard Business School graduate, and Clayton M. Christensen, a Harvard business school professor who developed the innovation disruption theory.
The theory, outlined in the Neiman Reports publication, posits that upstart organizations disrupt traditional industries because they “establish a foothold at the low end and move up the value network – eating away at the customer base of incumbents.”
This applies to the newspaper industry, Skok said, in that newcomer businesses have disrupted the traditional business model by catering to demand at the bottom of the market for fast, cheap access to news stories. For instance, The Huffington Post, an Internet-based aggregator, attracted legions of readers by compiling the best slices of news from a range of respected sources and offering it for free.
Twitter is also a major agent of disruption, he said, because it addresses a modern demand: “I’ve got 10 minutes to kill, help me fill it.”
And Metro newspapers are successful, the authors argue in the report, because their marketing strategies also involve asking what job needs to be done and then addressing that need. Metro is a uniquely successful print publication because it addresses commuters’ desire for easily consumable, entertaining and up-to-date news.
“The stories are intentionally made short and punchy with the intention of being easy to read, with the aim of allowing readers to be able to complete the entire issue within 20 minutes, which is the average time, they calculated, for your daily commute,” Skok said.
“Disruption is inevitable,” he warned. “It’s how incumbents can react to it that will determine who dies, who survives and who thrives.”
Skok and his co-authors said expanding and charging for copywriting services is one way newspapers could make up for revenue losses due to declines in general circulation and print advertising.
The report made it clear, however, that traditional publications can’t charge for content simply because managers want a return on the cost of production: the news that’s being sold must be worth it to the reader.
“The content must be so compelling that users will pay for it,” the report says. At the same time, Skok said during his presentation, “legacy” papers should discard fluffier, quota-satisfying “vanilla news stories.”
During a question and answer session following Skok’s presentation, Ryerson journalism professor Paul Knox suggested there is still place for traditional news organizations that are trusted sources of reliable news.
“That’s not that organization saying ‘here’s what you want, and so we’re going push it at you.’ That’s a relationship that grows over a period of time,” Knox said.
Skok insisted, however, that news organizations need to look ahead instead of behind and experiment with business models that might give them a fighting chance.
“The trick is to get in front of this disruption – and this is tricky because for news executives it means trusting a theory instead of the quarterly reports,” he said.
Skok said it’s a responsibility – and a risk – that news organizations need to take if they want to survive: “If we as journalists can’t make the case, the business case, for why journalism needs to exist, no one else is going to do it on our behalf.”