Media Management Center      MediaInfoCenter      McCormick Fellows      Kellogg School of Management      Medill

Get Smart About Your Readers: Ideas & Insights
Wednesday, October 15, 2008

Building the local media company of the future

(Rich Gordon)

TV stations and newspapers in local markets have been extremely successful businesses for many decades, but their futures look cloudy now as readers, viewers (and even worse, advertisers) move away from these mass media products in favor of more targeted media.

For digital services that focus on national content and audiences, I am pretty optimistic that advertising revenue (and, in some cases, a dose of user payments) can support the costs of creating original content. The proof can be found in sites as sites as diverse as Marketwatch.com, ESPN.com, About.com and CNet News, which are bringing in real revenue and paying content creators with the proceeds. Improvements in digital ad targeting should make it possible to generate even more revenue - and produce more content.

But what about local markets? Especially in small and medium-sized communities, a single product (a newspaper or a TV station) won't produce the profits their owners came to expect in the 1980s and 1990s. And standing by themselves, they may not remain profitable at all. That's why most companies owning local media are now working on a multiplatform, multiproduct approach - trying to touch as many people in their markets as possible with as many different products as are needed. In this vision of the future, every product is a niche product, and a newspaper or TV station might simply serve the biggest niches.

Still, even if this is the right strategy, it leaves open the question of how to organize a local media company so it can (1) understand its actual and potential audiences; (2) create new products efficiently and effectively; (3) identify and capitalize on the right business models for these products; and (4) develop culture and business practices that enable the organization to be nimble and willing to take risks.

Along with six master's students at Medill, I'm getting a look at how one company is reorganizing itself for the 21st century local media landscape. Gazette Communications, which owns the daily newspaper (58,000 circulation daily, 65,000 Sunday) and the ABC affiliate in Cedar Rapids, Iowa, is sponsoring a digital innovation class that I'm currently directing in Medill's master's program. The students, including two who are completing our master's program after previously working as computer programmers, plan to build a digital product that connects young adults in Cedar Rapids to each other and to local news and information.

You can read more about the class here and here on the PBS Idealab blog, and follow the students' work on their Web site, Crunchberry Project. (The name comes from the aromas commonly wafting around Cedar Rapids, thanks to the nearby Quaker Oats cereal factory.)

The rethinking at Gazette Communications starts at the top of the company, with CEO Chuck Peters. Peters, a lawyer by training, previously served as president of Amana Refrigeration and as director of a telecommunications firm called Lightwaves Systems. Coming from outside the newspaper industry, Peters is not bound by the traditions and assumptions that have guided local media in the past.

At this point, the reinvention of Gazette Communications is playing out on three fronts:
  • To reach new audiences, the company has created a new division geared to creating niche products and redefined the mission of other parts of the company to support niche products

  • At the newspaper and TV station, the staff is being encouraged to experiment based on a Web-first model, and new job descriptions are being created.

  • The company has launched a separate technology company, based in Chicago, that is trying to put together the technology platforms a local media company needs
Let's take them one at a time.

Niche products approach
Gazette Communications has created a separate division devoted to niche products. Sara Sinnard, the director of niche products, has almost a dozen people working for her to identify the market for and direct niche products. The first of these niche products is launched: Iowaprepsports.com. The current version of the site mostly contains journalism about prep sports, but the company plans to add online community features such as commenting/forums and photo sharing.

Another niche product - a print/online entertainment guide called Hoopla - is on the way. It's being promoted (lightly) at Hooplanow.com.

When it comes to niche products, the new division is clearly in charge. Product managers who work for Sinnard are given responsibility for different audience segments and then oversee niche products geared to that segment. Other divisions of the company (for instance, newsroom, advertising, technology) serve in a support role, providing whatever services are needed to make a niche product successful.

Newsroom experimentation and restructuring
In June, the Gazette hired a new editor, Steve Buttry, who came from the American Press Institute, where he helped lead the Newspaper Next initiative to spur innovation at newspaper companies. His third day on the job, Cedar Rapids (and other communities in Iowa) suffered a record flood that inundated several neighborhoods near the Cedar River and destroyed most of the first-floor businesses downtown. On our visit to Cedar Rapids last month, we were told that once damages are totaled, this flood will end up being 6th worst in U.S. history.

During and since the flood, the newsroom has been converting to a Web-first approach for local news, featuring a wide variety of staff blogs, extensive use of Twitter to post breaking news updates, and live-blogging events using CoverItLive software. At least 30 people on the paper's news staff, as well as CEO Peters, are using Twitter. The live-blogging tools have been used to cover prep sports, a visit by Republican candidates John McCain and Sarah Palin and a real-time Q&A with Buttry.

Even before Buttry arrived, the paper was working to find ways to use digital tools to build communities of interest in Cedar Rapids. The company gave Annette Schulte the title "content ninja" and tasked her with developing a strategy for digital content and online communities. She's been posting regularly about these topics on her blog.

A few weeks ago, the newsroom appointed Jamie Kelly to a new position titled "social media guide." Among other tasks, he is responsible for maintaining the "Notes from the Newsroom" blog and using social media tools such as Twitter, Facebook and Digg to help build traffic to Gazette content.

The newsroom is handicapped, however, by a lack of technological tools to foster community conversation, input and debate. Both the Gazette and KCRG allow commenting on articles, but Buttry, Schulte and Kelly are all anxious to have more robust tools for interaction with members of the community, including social-networking capabilities.

Rethinking the technology model
Peters, the CEO, has become convinced that the traditional newspaper and television production model no longer works. Content should not be created initially for one platform and then reconfigured for others. He has written about the problem on his blog in a post called Newspapers Backwards:
We... try to cover a two county area primarily, another six counties to a lesser extent, and another eight counties to some extent. We do so in a way that is somewhat interesting to most people in the form of stories. Then we chop it up and put it online.

But, that is not how people live. I live in a rural neighborhood with a one mile circumference, am part of school, church and business communities, and several communities of interest. County lines don’t matter to those communities. I would like to know items of significance to those specific communities, developed by people who care about the communities, to be available to me in meaningful context wherever I am.
Newspaper Next proposed that newspapers position themselves as a "local information utility." Buttry has expanded the concept, relabeling it "C3 - Complete Community Connection." Peters has adopted Buttry's term to describe a local media company that will serve (as Buttry puts it) as people's "connection to community life - news, information, commerce, social life, recovery."

Peters thinks media companies need an entirely different approach to managing content. "In many cases our current model presupposes that info gatherers (reporters) gather info based on the media they will use for distribution, a preconceived limiting paradigm," Peters writes in describing an "Integrated Content Management Framework." A media company cannot predict how people will want to use different content, and there may be unforseen opportunities to generate revenue by reusing content once it's been gathered. To maximize the value of a media company's content, Peters says, content needs to be stored in a database and "tagged" or categorized in many different ways.

Meeting with my students, Peters fleshed out this concept by describing a Twitter "tweet" (140 characters) as perhaps the most elemental unit of content. Imagine that you're covering a live event with a series of 140-character updates, each potentially supplemented with a photo, video or audio file. With these assets stored in the right production system, people running any of the company's media products could assemble the appropriate package for its audience.

It may seem a little futuristic, but Peters' company is investing to try to make it happen. It has created a subsidiary called e-Me Ventures, based in Chicago, to license and/or build the technology platform that would store and tie together all of the content collected by journalists or submitted by people in the community. Peters has been speaking with industry groups and seeking other media companies interested in investing in e-Me Ventures.

If you're interested in following the evolution of Gazette Communications, many of its key leaders are blogging regularly about what's happening there:
By Rich Gordon (richgor-at-northwestern.edu)
Rich Gordon is Associate Professor and Director of Digital Technology in Education at Medill School of Journalism at Northwestern University.


AddThis Social Bookmark Button

Permalink
Posted at 9:13 AM
Email this post:


Comments:

Heads-up, Rich. We've now soft-launched The Fan Zone, the community component of IowaPrepSports.com. It's off to a slow, quiet start. It can be found at http://iowaprepsports.ning.com/

Posted by Anonymous Annette Schulte at October 15, 2008 4:30 PM



 

Post a Comment


Links to this post:
Create a Link


Get Smart Blog Main Page

Most Read Posts








Search the Get Smart Blog

©2008 Readership Institute • 301 Fisk Hall • Northwestern University • 1845 Sheridan Road • Evanston, IL 60208-2110
phone: 847.491.9900 • fax: 847.491.5619 • email: institute@readership.org