Former Cox Newspapers President Jay Smith weighs in on future of newspapers and role of Associated Press

I received a very thoughtful personal e-mail today from Jay Smith, retired president of Cox Newspapers and former chairman of the Newspaper Association of America and board member of the Associated Press, regarding my critique of the American Press Institute's proposals to help save the industry.

I asked him whether I could share it publicly, and he graciously agreed. The following is his e-mail on my previous post - How depresssing 2 - and the non-personal part of my response to him. (He also copied Tom Curley, president and CEO of AP, on his e-mail to me.)

JAY SMITH'S E-MAIL

To:
Subject: Your piece on Romenekso today

John: Although I’ve been retired for a year, I still look in on Romenekso. I saw your piece today and thought it made great sense. As one who wrestled with the so-called business model, especially in the last two decades of my 37 years with Cox Newspapers, I look back with regret on missed opportunities. The first occurred in the mid-90’s when several companies explored the possibility of acquiring Prodigy. Divided over whether the focus should be on classifieds or news, the group bickered until the opportunity passed and was missed. The second occurred more recently, but still can be salvaged.

It involves the Associated Press on whose board I served for several years. Individually, newspapers do not have the technological firepower to compete in the Internet world. Those that have (Cox with its AutoTrader.com entity; Tribune/Gannett with CareerBuilder have put their stakes in the ground). Collectively and on their behalf, AP does have the capacity to help newspapers develop new online businesses that can generate revenue, whether from subscribers or advertisers. More important, AP has access to a nation of newspapers. While few newspapers can gin up content on their own for which users will pay, there is content that, when properly collected and edited, does have real value. For instance, how much might, say, the soft drink industry pay for a daily report of EVERY news item of interest printed in every US newspaper? Such real-time information can be critical to anyone whose living depends on decisions made by the Coca-Colas and Pepsi-Colas of the world.

While this is but one example, you can let your imagination run wild and develop hundreds, if not thousands, of others. In effect, the AP can vacuum up and create a multitude of individual, albeit small, news and information businesses that collectively could approach something of real value for AP and its members.

Sadly, I fear, the leaders of newspapers and newspaper companies have yet to place their faith in such a venture. Until and unless they do, our former colleagues will continue to thrash about in pursuit of the salvation they so desperately need. Jay Smith, former president of Cox Newspapers, Inc.

THE FOLLOWING IS MY RESPONSE

Jay,

Thank you for your thoughtful response to my blog.

I agree with you that individually newspapers don't have the technological firepower to compete in the Internet world. I feel it's now incumbent on me to share on my blog some of my own ideas for how local news organizations committed to the role of furthering our democracy by informing and engaging the public can survive and even thrive in this new era. I'll try to do so over the coming weeks.

I agree with you that AP is one of the organizations positioned to help newspapers create new online businesses. In my corporate role with Scripps, I tried to work with AP to do just that. But it's not easy, as you know, when most folks at a newspaper are just trying to get their daily work done and AP has a million balls in the air. I don't think I was successful.

It seems to me that newspapers, even within large companies like Scripps, are essentially one-of-a-kind businesses in a world where that no longer works, unless you have a really unique product. Local publishers need to be part of a larger national network using shared tools and approaches. I look at what's happening with the iphone and the way Apple opened the door for developers to create new apps and think that local news organizations need to find some similar way to be on a common platform that is open to outsiders, of course with some gatekeeping mechanism to make sure new services/tools make sense. I'm just not sure how we get there. I don't think the industry can get there if all it does is try to hold on to its legacy revenue streams and its legacy business. One thing that concerns me is that newspapers don't seem to be working with local businesses to help them find their own foothold on the Internet and at the same time possibly place themselves in the middle of transactions. This might enable them to find a new revenue stream they couldn't have tapped before. When I read that the new iphone is going to be able to tell where the user is and provide information down to the block level, I think about how newspapers could hep local businesses participate in this new world. Those businesses are also at a disadvantage because they don't have the technological wherewithal either to make the most of the potential of this new era.

As I think you know, my background is as a journalist. I was publisher of the Rocky, but it was an unusual situation because the president and CEO of the Denver Newspaper Agency had revenue responsiblity. I think we've entered a different stage in our business where the publisher can't just be a chief revenue officer. I don't see how local news organizations will be successful if the publisher doesn't feel as responsible for content and services as an individual owner might have in previous generations. I also don't see how the walls between editorial/marketing/

advertising can remain in place. I think local news organizations need a clear and common set of values. But then I think they need to operate more like the way I saw CNN act when it was in Denver for the Democratic National Convention. The marketing people sat in the same room as the journalists. As it seemed did the advertising people. We're all in this together, yet you wouldn't know it from the way we run our organizations.

Thanks again for writing.

Best,

J