One of the perils of being the last editor of a deceased publication is that people want your help understanding why a 150-year-old civic institution could die. It's not always pleasant sifting around in the ashes. But the loss of the Rocky Mountain News has also given me a platform to talk to a larger audience about journalism issues that I think are important.
This is the talk I gave at Webcom 2009 in Montreal on Oct. 22, 2009. I hope the talk reflects a more refined and perhaps expansive view than an earlier presentation I gave at the UC Berkeley Media Technology Summit at Google in Silicon Valley.
Here's a link to a Quicktime movie of the presentation on Vimeo. There you can see all the keynote slides I used and hear me reading my remarks. You can also find the slides separately on Slideshare.com. The text is below.
While the talk contains the same lessons as my speech to Google, this version contains more and broader perspective on why the Rocky couldn't survive in the Internet era. It attempts to place what happened in a larger context.
Did the Internet kill the Rocky Mountain News?
And, if it did, what can we learn from its death?
Montreal, Oct. 22, 2009
“Bonjour. C’est un honneur d’etre ici avec vous aujourd’hui. Je suis desole que je ne pourrai pas donner cette presentation en Francais.”
The title of my talk is, “Did the Internet kill the Rocky Mountain News? And, if it did, what can we learn from its death?” To give the twitter answer, for those of you who want to get to the bottom line right away, here’s my talk in 140 characters:
“YES and no. Internet the fundamental cause of death. Economic collapse the final blow. Denver could not support two general interest papers.”
The lessons from the Rocky’s death will take a little longer to explain, and will be the focus of my presentation.
As we’re at the time of year when Halloween is approaching, perhaps a ghost analogy for my appearance today would be appropriate. I’d ask you to think of me as sort of like the ghost of Marley in Charles Dickens’ A Christmas Carol. I’m here from the Other Side to remind you about some principles I think are worth holding fast to in your professional life, principles I’ve had time to distill after the death of a publication with which I was so closely identified.
In the end, this talk isn’t about the death of a newspaper or how the Internet killed it. It’s about life, about business lessons for the Internet era. I come to you not as someone focused on the past, but as someone who’s looking to the future, someone who believes there’s never been a more exciting time to be a journalist. My hope is that our time together will give you perspective that will help you as you build the future, and not just at newspapers. While this will be a newspaper-centric talk, because that’s the core of my experience, I believe you’ll find that the lessons I’ve learned apply broadly across radio, TV, magazines and other media, too.
Before I subject the past to scrutiny, you need to know I don’t exempt myself from criticism for what happened. I was the top editorial person for the Rocky’s final 11 years and part of the business leadership team. I bear my own share of responsibility. I also must tell you that it’s a lot easier when looking back to see things that seem obvious to us today, but were a lot more difficult to see when we were in the thick of the fight, and most of the revenue growth and almost the total revenue pie came from the main print product.
I think it’s important to establish a common understanding of what we’re going to talk about. So let me start with a brief history. The Rocky Mountain News was Colorado’s oldest newspaper, founded in 1859 when Denver was little more than a hamlet of log cabins. The paper went on to cover the news in three centuries, from the Civil War to the War on Terror. It became so much a part of the fabric of Colorado that many readers called it “My Rocky,” a term of endearment rare for any newspaper. It was owned for more than 80 years by a deep-pocketed company, E.W. Scripps, that still today is controlled by the founding family.
Scripps started as a newspaper company, but navigated through the advent of radio, TV and cable - starting successful new media businesses each time. In the ‘90s, after going public, Scripps innovated with its free cash flow and hit a home run building lifestyle cable networks, including HGTV and the Food Network, now worth roughly $6 billion.
So some pretty smart people were at the top of the company that owned the Rocky Mountain News. Yet none of that was enough for the Rocky to survive in the Internet era. The Rocky published its final edition on Feb. 27 of this year, the first major paper to shut its doors after the economic crash of the fall of 2008.
On the day the closure was announced, Scripps CEO Rich Boehne told the staff assembled in the newsroom:
"You are the model of what a great newspaper should be. It's a tragedy for the industry that you disappear." He was talking to a staff that since 2000 had won four Pulitzer Prizes, a total topped by just six other newspapers in the same period. And the staff knew that from a circulation standpoint, when the Denver papers competed for readers head to head on weekdays, the Rocky came out on top.
So, why did the Rocky disappear? Looking back now on that difficult day, the word that stands out in Boehne’s statement is “newspaper.”
As one former Scripps executive told me in talking about what has happened to the newspaper industry, “We had all the advantages and let it slip away. We couldn’t give up the idea that we were newspaper companies.”
The first lesson I hope people who care about the future of local news take from the Rocky’s experience is this: Being a “great newspaper” isn’t enough in the Internet era. You have to know what business you’re in. We thought we were in the newspaper business. We were right and at the same time deeply mistaken.
At a newspaper, people largely think about tomorrow. In the Web era, you need to think of now and forever. Thinking about tomorrow isn’t enough anymore. Consumers today want services when, where and how they want them, and they want to be able to participate, not just receive. That means that thinking like a newspaper is not enough.
It’s understandable that we thought we were in the newspaper business. In the 1990s, Denver was the site of what was sometimes called America’s last great newspaper war. The Denver Post and the Rocky Mountain News had competed for 100 years and each saw the grand prize close at hand. Each wanted to become the only newspaper in town - something we thought of as “owning the Denver market.” We thought winning would guarantee a stable and profitable future. We misunderstood the competitive landscape.
The problem was we were fighting the last war. We didn’t understand what was happening to the playing field. Media companies used to think they were in control. That they could “own” a market. What we didn’t take into account is that in this new era, consumers were going to be in control. This reversal is the product of the Internet revolution and one of the reasons I believe it’s true that the Internet, and the change it represents, is the single biggest reason the Rocky Mountain News can be no more.
I believe that if we had spent more time trying to build the depth of our connection with the community using online tools from the very start, the fate of the Rocky might have been different. Which is why I think lesson #2 is so important. You must know your competition. Of course our competition was another newspaper. But that was the obvious competition. Much bigger competition - for people’s attention - was occurring elsewhere. We needed to experiment more, and yes, fail more, too. If we had, perhaps we would have been better able to build a range of publications, in print and online, that would have served our more diverse and demanding audience.
Of course, it’s important to note that the Internet revolution - this is the first Web page - parallels other major changes in our society that also impacted the Rocky’s fate. One is demographic. As a society, we are far more diverse today. While at one time a single general interest publication might have been able to connect with a huge audience, that is much more difficult in an era of fragmentation, not just media fragmentation, but societal fragmentation. It’s also important to note that the decline of the daily newspaper also reflects that more and more people are questioning the value of the basic institutional building blocks of our society. It’s not just newspapers or media that are looked upon skeptically by the public. The distrust extends to the courts, to Congress or parliament, and other institutions.
Why then do I say the Web killed the Rocky? Because the paper was the victim of a wave that kept building until it felt like we were being swept away by a tidal wave. It wasn’t a wave of technology alone; it was a wave of shifting attention, away from old media to new tools that gave people more pleasure, more power and more insight. Consider...The Web only went public in 1992, not 20 years ago. By 1999, just seven years later, more than half of Americans used it on a regular basis. In 2000, Craigslist started expanding to other cities from its San Francisco base, landing in Denver the next year. In 2001 Wikipedia went live. The next year it was Google News’ turn. In 2003, iTunes opened its online doors. Skype and Myspace launched the same year. 2004 gave us Yelp. 2005 YouTube and Facebook. 2006 Twitter. 2007 the iPhone. Fifteen years after that totally simple first Web page I showed you in the previous slide, we arrived at the iPhone. Talk about fast. Talk about a wave.
The result of the surge that became a tidal wave is that people have so much media and information coming at them that it’s a problem, something Google calls “attention management.” People have fast portable tools. Better computers. That means more competition for newspapers. The coffee shop shifted from a place where people read papers to a place where people find wireless connections to work on their laptops. Advertising follows eyeballs and the eyeballs were moving to the Web. So the money did, too.
A good example of this trend comes from my own paper. At staff meetings in 2006, I handed out a survey of media usage at the start of the meetings and gave back the collated results at the end of the meeting. At every meeting, the result was the same: People paid to be newspaper journalists spent more of their time reading news online than they did in print. And when you added in all the other things they did online, the contrast was overwhelming. They were living in a digital world and producing an analog product. A recipe for trouble.
The Rocky’s first foray onto the Web came in 1995, the year Netscape, Windows 95 and Amazon all launched. The newsroom partnered with another major newspaper company in a site called Fastball, providing Colorado Rockies stories and data. To give you some perspective, that same year Colorado’s leading television station put up a Web site, but all it had was a picture of the station’s building, its address and phone number. No links or news at all. At that time, believe it or not, much of the talk about “new media” at many newspapers was about things like AudioText, where users could call in and select different categories of news, and fax on demand.
The Rocky had been burned in the new media world before. In 1990, it made what it considered at the time a major play, launching an electronic service called the A LA CARTE EDITION. The paper sent software to a few thousand users who requested it, many of whom had 300 baud modems.
You can see from this introduction to our first electronic service that we couldn’t help thinking of ourselves as a newspaper company right from the start. We wrote that the goal of the new edition, was “ultimately to strengthen and preserve the printed daily newspaper.”
The service was shut down after about 9 months, I was told, because “we just couldn't show that it was having any measurable impact on retention of print subscribers and it wasn't producing revenue.”
Right from the start, new offerings were measured by what they did for the core product, not on their own merits. A big mistake.
The Rocky’s first Web site, this is the home page on the very first day, grew out of the newsroom’s night copy desk crew, a few of whom had learned some HTML. It was a bottom up effort. There was no advertising involvement. Under the direction of the senior night editor, a small team built a Web site that went live on March 1, 1996. The Post had put up a site late the previous year so we knew we needed to do it, if only because we couldn’t let them have a leg up on us anywhere.
The launch of the site was a perfect example of how the attention of the paper’s leadership was on print, not on new possibilities. We were wrestling with a decision to pull back print distribution to 13 counties adjacent to Denver, a money-saving move to match the $5 million in savings we believed the Post had achieved by narrowing its printed page. We cut about 30,000 circulation, or 10% of our total, in one day. The Post kept delivering to all 64 Colorado counties.
On the day before the Rocky opened its doors to the world online, the page 2 column by the editor began: “I have never been much good at saying goodbye. But that is my task today for many loyal readers of the Rocky Mountain News.” It wasn’t until the fourth paragraph that he introduced the Web site. He wrote: “Nonetheless, some of our key stories, features and photographs will still be available outside our new service area. This will be possible through our two new electronic ventures.” It would have been so easy to say something like “I have good news and bad news.” But no, the attention was on the subscribers we were losing instead of the new services we were offering.
The message to the newsroom at that time regarding the Web site: “Do not let it interfere with the print edition.” And as managing editor, I made sure that we kept our focus on the print competition.
We knew the Web was a place we needed to be. But we didn’t have a clear strategy. Mission. Or objective. It was a “complement to the paper,” as we said in our initial “About us” page.
Which brings me to Lesson 3: You have to have a strategy and you have to be committed to pursuing it. We perceived the Web site as a newspaper online, as a complement to the paper, not as its own thing. That’s not a strategy for success.
Senior management’s focus in the 1990s was on keeping the newspaper alive. Again, to be clear, that’s understandable, at least to a point. We were fighting for our lives and the money then lay in print. We didn’t understand the Web or new technology and didn’t have the time to learn much about it. We weren’t a consumer-driven company, except that we knew our priority was to get papers on the porch on time in the morning. Otherwise, we feared our subscribers would switch to our competitor.
Without clear objectives, an organization stumbles from one priority to the next. The 4th lesson: You must know your goal. On the print side, we had a clear objective. But our online objective kept changing. Of course again this is somewhat understandable; the online world was also changing rapidly.
Because the Rocky’s newsroom was unionized, management felt it had to quickly make a decision about where to house the new service, if it wanted to avoid union rules governing the new enterprise. We moved it out of the newsroom almost right away, and it wouldn’t come back until “the war” was over, five years later.
Which brings me to lesson#5. Legacy labor/management relations and organizational structures cannot be allowed to dictate how a new operation works. Keep new ventures free from the rules of the old.
Even without a clear goal or strategy, the Web team - and the company - did go on to do some interesting things.
Scripps partnered with another newspaper company to produce an outdoor recreation site called “Go West,” another short-lived effort because costs so exceeded revenues. The Rocky bought an online real estate service. It built web sites for customers. It became an internet service provider.
But the Web leadership kept changing, which meant new marching orders; there was tension between corporate and local leadership about direction on the Web; and staff turnover was heavy. Indicative of the struggle to find a strategy was how the name of the site kept changing. It started as Denver-RMN.com. (A really catchy url.)
This was a typical story page.
You probably noticed that it appears we had little interest in advertising. But we already knew that the classifieds might be an important franchise online.
Then we changed the site’s name to InsideDenver.com. We thought the Web was going to be more about what to do than about news. (The story is that Denver.com was available but the $50,000 price tag was considered too steep.)
Finally, we chose to go to our newspaper name, RockyMountainNews.com, despite how unwieldy it was as a url.
We generally saw the web as a few advertising boxes we could sell. We didn’t see the value of audience. Scripps bought sophisticated software to run its cable and newspaper Web sites. Although it tried to put the focus on readers, in the end it let technical people develop a culture based on how they wanted technology to work - stable and secure - rather than putting the priority on remaining nimble in a rapidly changing world. We kept trying to build perfect systems, slowing our progress, instead of working iteratively.
And in Denver, we thought we needed to reinvent everything for our market instead of accepting solutions that would work across the company.
What did we discover? That the people running a new business need to be free to do what’s best for that business, regardless of the potential impact on the old. That’s lesson #6. Why couldn’t newspapers have invented something like Yelp? Probably because editors would have gone ballistic over reader reviews with misspelled words and would have felt uneasy with reader contributions being given priority. The Rocky’s Web team producing InsideDenver.com used the slogan, “Before you go out, go InsideDenver.com,” that could have led in that direction. But the mission was changed because InsideDenver didn’t sound like a newspaper and didn’t encompass the idea of our all-important classifieds.
A pivotal moment - perhaps the most telling about the paper’s approach to the Web - came on the morning of April 20, 1999 when two students opened fire at Columbine High School. The world was watching.
At that time, we had one content producer whose job was essentially to shovel the newspaper onto the Web. The Web team was on the first floor of our building. The newsroom on the third. After news of the shooting broke, the producer came to the newsroom and asked the city editor for any news he could give him. “I’m not giving you anything for the Web site,” he remembers being told. “They’ll steal it.” They, in this case, was The Denver Post. The culture of the newsroom at this point was still to save any possible scoops for the morning paper to keep the Post a day behind us. The Rocky’s Web team ended up relying on our TV news partner for its reports. Even with that, the traffic numbers that day weren’t matched for two years. Neither the Rocky nor the Post won an Eppy Award for coverage of Columbine. That was taken by the Boulder Daily Camera, which didn’t have anywhere near the resources of the two Denver papers to cover the story. But both papers won Pulitzer Prizes for their print coverage.
But on the same day we blew it online, we learned the most important online lesson for a newsroom: It pays to share your content in real time. We decided to give all our best photographs from the high school to the Associated Press as soon as we had them in our computer system. The result, the Rocky pictures you’ve just seen appeared on front pages around the world the next morning. The staff saw the tangible benefits of sharing in real time. The quality of their work captured the attention of the world and raised the paper’s profile. That day was a turning point for how the newsroom worked with the web, although the results wouldn’t become fully visible until a few years later.
In 2000, the owners of the Denver papers called a truce. The Rocky was bleeding money and the Post was heading the same direction. So they asked the Justice Department to approve what’s known as a joint operating agreement, which allows newspapers to merge business operations while maintaining separate and independent newsrooms.
The agreement, written in 2000 under the direction of two seasoned newspaper executives - William Burleigh and Dean Singleton - didn’t even mention the Web. Even though by that time more than 104 million Americans had internet access and spent an average of 4.2 hours a week online, the Web wasn’t perceived as central to the success of the new business. It was believed that savings from combining the business operations of the two papers plus the ability to raise advertising rates would produce very healthy returns for both owners. Instead, what happened was that classified revenues dropped by more than $100 million a year from the start of the JOA to the end, and national and display categories tanked, too.
The JOA did offer one significant benefit to our Web efforts. It gave the papers enough economic cushion to make them feel comfortable enough to negotiate new flexible contracts with the Newspaper Guild to move the Web editorial team and programmers back into the newsroom - this time at the very center of the room, not in a dark corner on the 1st floor, a symbolic move to try to indicate the site’s importance to our future.
This was critical to the multimedia and database creativity that followed on the Web. And I think it was critical to our growth in traffic, from roughly 600,000 uniques a month in 2001 to 2.2 million a month when the paper was put up for sale.
But again, the focus in Denver when the agreement went into effect in early 2001 and for the next few years was on print. The Web in many ways became even more problematic. The papers had two basically similar Web sites using different content management systems and supported by a third advertising system. Instead of focusing on new media and new ways to serve audiences with niche print, online and mobile products, the owners spent $130 million to upgrade their printing plant (they knew they would achieve savings by doing so) and $100 million to build a new headquarters on a prominent site in downtown Denver. The Web was essentially in limbo for a long time, with the Web leadership on the business side continuing to turn over, making it hard to gain any traction except in the newsroom.
Still, we produced some work of national - even global - caliber such as Final Salute, which won two Pulitzer Prizes.
A related story in our coverage of the war at home was called Wake for an Indian Warrior. The slide show that was part of the story of the first Sioux to die in Iraq had somewhere in the neighborhood of 2 million page views.
Despite the many such successes on newspaper Web sites, it’s not clear that the newspaper industry understands the Web today, after all these years. Clearly, it hasn’t figured out the business model. And I think it’s safe to say that it’s only partially figured out how to serve readers online. That’s partly because you need to get the right people into an organization, people who can see and seize new opportunities. Which brings me to Lesson #7: If you want to compete in a medium, you have to understand it.
A good example of our lack of understanding of the Web came in 2005 when Denver took its first big leap online under the JOA. This was the same year YouTube went live. Executives in Denver perceived a need for a vehicle to compete with weekly newspapers, which they thought were taking local ad share. In response, the Rocky launched YourHub.com, a network of more than 40 “citizen-journalism” web sites serving the Denver metropolitan area. All content appeared online first. Most came from readers. The best content of the week - again, almost all from readers - was published in 18 weekly zoned print sections. The first site went live that spring. But guess what? Google couldn’t find it.
The company that built the site was a key contractor for a major newspaper company and worked for other large companies, but it didn’t adequately understand search engine optimization and built the site in such a way that it didn’t show up in Google searches, although Yahoo and MSN did find it. We weren’t smart enough as a company to know that needed to be a basic requirement of the project and didn’t know how to evaluate programming to make sure it was. (I don’t have to tell you that if Google doesn’t find a site, its opportunities are very limited.) Ultimately, it was Scripps employees at Shopzilla who studied the architecture of the site and advised us how to rebuild it so it would show up in Google search rankings. See what I mean about the importance of having people who understand the medium they’re working in?
Another example from that effort. Craigslist had come to Denver four years earlier, but we still couldn’t get the classified advertising leadership to agree to compete with Craigslist by offering free classifieds on these community sites, even private party under a certain dollar amount. The argument went on for almost a year, a year we sent the message to users that we didn’t understand how they wanted to use the web or that advertising content was valuable to them.
One of the things that was new to newspaper people on the Web was the ability to track users in real time. For the first time, we could actually understand what our readers were doing. My lesson from that, the 8th in my list, is that any online operation needs to “Measure, measure, measure.” While newspaper companies had experts managing circulation accounts to make sure they met the requirements of the Audit Bureau of Circulations, they were less committed to an intense focus on web data. I think newsrooms and entire news organizations have to use data more to guide their allocation of resources.
By the end, Scripps’ former Web VP felt we were cooking on all cylinders as a news Web site. But that’s probably too generous a view. I think we had far to go.
This, for example, is our section for the Democratic National Convention in Denver.
And this is a guide to the city from that same period.
This brings me to Lesson #9: Ask yourself: Without R&D, how are local news companies going to get out on the edge and develop new offerings? Now that newspaper companies are filling the bankruptcy courts, they’re scrambling to find ways to survive on the Web. But their efforts seem mostly about making money off their current offerings. You don’t see them developing Yelp, YouTube, Twitter, Facebook, etc. I think they still could develop successful new services. But it would require something they haven’t historically done, research and development.
So, as you can see, there are many reasons to say that the Web killed the Rocky Mountain News. But it’s not quite that simple. Let me explain why I also said, “No,” in answer to the question whether the Web killed the Rocky Mountain News.
While the digital revolution is the fundamental force reshaping our media, I don’t believe it means that Denver can’t have a significant multi-platform local news organization that continues to put ink onto paper. However, the city clearly can’t support two papers of essentially the same size with essentially the same mission, and that was what the owners were trying to do.
It could have just as easily been the Denver Post that folded. The main reason it was the Rocky that closed was that its owner had a very different view of the short-term future, say the next five years, for newspapers in metropolitan markets. They saw nothing but losses and risk in the future. Scripps is a public company. The Post is privately held and its owner has a great deal personally invested in the paper, not just financially but emotionally. He was ready to stay the course and try to make it work.
So when the market collapsed and the specter of another Great Depression raised its head in the fall of 2008, Scripps decided it needed to get out. That’s why the economic collapse was the final blow.
I believe one newspaper with an owner who can make decisions quickly can build a future in Denver, despite the opportunities both papers missed over the years. But there are no guarantees. The digital wave is powerful and the fixed costs of daily newspapers are a burden that could sink many more or make them mere shadows of themselves.
To conclude, I’m concerned that many newspaper companies are making the same mistake in this decade that the Rocky made in its final decade and a half.
Newspaper companies have to look for ways to answer the needs of the people in their communities. They have to know what business they’re in. We thought we were in the newspaper business. It seems like that’s what too many still think. They’re not. They’re in the news, information, knowledge and connection business. And when I say connection, I don’t just mean connecting readers with their community. I mean connecting buyers and sellers.
Which brings me to the final lesson: Know your customers. If newspapers would spend more time trying to understand their customers instead of focused on their own internal issues - such as which newspaper department should get credit for Web revenue - they would be more likely to be successful. That’s a hard switch for traditional manufacturing operations like newspapers to make. But I don’t think I need to explain why it’s essential. The following quote explains the dilemma newspapers found - and may still find - themselves in.
“We were not used to the market telling us how things should be. We were used to telling people what we thought they needed and how they needed it,” is how a Scripps marketing exec put it. That has to change.
So, given my experience at the Rocky, what are some things I think local media companies should do if they want to thrive in the Internet era?
They should think bigger at the same time as they think smaller. They should look for opportunities to scale. They’re still too focused on unique, market by market solutions. Newspapers can’t think anymore of building or selling one monolithic audience. They need to build many niches and many audiences. Interests align across geographies, so there’s no reason that everything they do need be limited to their “markets.”
To do what I just described, I think local news organizations are going to have to be open to new kinds of partnerships, to working with others instead of trying to do everything themselves, to sharing revenue and content. The I-phone APP model is something newspapers should explore. Apple built a platform and lets others use it. Couldn’t newspapers work together and build community platforms that others would want to develop?
Local news organizations need to grow revenue rather than fighting to protect the piece of the pie they already have. They need tools to serve readers relevant advertising and they need to be able to deliver targeted audiences to advertisers.
Local news organizations should give consumers more control. They’re still thinking too much about themselves and not enough about what the consumer wants.
They should stop looking longingly in the rear view mirror at 30% margins. It’s certainly arguable that those margins came at the expense of the future of the franchise. What happened was that the publisher became a chief revenue officer instead of a chief product officer, the way Steve Jobs or other successful tech business leaders might see themselves or that newspaper pioneers like Hearst and Scripps saw themselves.
And, finally, the most difficult recommendation of all, local news organizations should stop making decisions about new business opportunities based on how they’ll affect their legacy business. The main newspaper cannot dictate the shape of the future.
Now that you’ve heard from the ghost of a dead newspaper, I hope you feel that the lessons I’ve gleaned from my experience at the Rocky Mountain News are helpful in thinking about your own situation. I don’t come to you to attack the Internet for killing something I loved. I come to you to praise the possibilities of the digital world and to encourage you to experiment without fear. I don’t want others to succumb to the same fate as the Rocky Mountain News. I want to see others thrive. I’d be happy to take any questions.
As a reminder, here are the 10 lessons I’ve discussed today. I’ll keep them up during our conversation.