A place to post the stuff rolling around my brain.

Want to save the newspaper industry? Get Jeff Bezos on the phone!

Posted: March 6th, 2009 | Author: admin | Filed under: gfurry | Tags: , , , | Comments

Everyday it seems I hear a story about a major newspaper or magazine laying off lots of people or shutting down completely. This isn’t new but it is happening at a much faster pace than in the past. I will admit I have never worked in the publishing industry and I may not have all the facts but I do know why I don’t get the paper delivered to my house anymore.

Why should I pay for a newspaper when I can get it online for free? I subscribe to my local paper as well as several larger Newspapers via Google Reader. I see all the headlines and click through only to the stories I am interested in. Yes the same stories that would be delivered to my house. In some cases in tomorrows paper. I also follow breaking news via twitter feeds from the local TV stations.

OK I know what you are thinking. You like to read the paper on the train, in a boat or you like the feel of the paper. Sure I get that. That is what your Dad did and your Grand Father before him. Great. I can appreciate that. But times are changing and you just may need to change with them. I would rather have my paper online than not at all. If a radical change doesn’t happen soon your local paper may just have to close its doors altogether. This is not about what you want this is about the money.

As far as I can tell everything in the paper would transfer to digital. It is not like some days you also get kittens with your paper. So you switch to digital and you would leave people behind. Yep just like digital TV. Get over it. There are also ways around it.

The second cut is the deepest. The first change is moving everything to digital, that should be obvious. The second cut is where lives are involved. As I mentioned before I don’t know how all this works but I am guessing there are a few big expenses that could be cut immediately that would greatly help a struggling Newspaper.

Stop the presses! Yes this is a big one, shut down the presses. No more paper and ink to buy. No more pressmen, no more delivery people, no more giant building to hold the presses or fleet of trucks to deliver the papers. Yes this would hurt. Ask yourself this question, what is more important to a newspaper, the guy printing the paper or the talented writers that fill the pages? The paper would survive with with only one of these people. The current trend seems to be cutting everywhere.

Time to step it up a notch! Someone get me Jeff Bezos on the phone! Going digital means more than just putting all your content on the web. People are already paying you to deliver your paper why not keep taking their money and keep delivering your content. Notice I said content, not paper.

This is where it gets interesting. Amazon just started shipping the Kindle 2. Looks like a great device for people that like to read. Would I buy it? Close to $400 is a lot of money for me when I already have decent reading devices called my computer, my iphone and the book. Why not a subscription? Well I am sure Amazon already thought of this and they found that people don’t like subscriptions. Sure I get that, I don’t like them either. What if you could get a free or discounted Kindle for the price of a subscription you were already paying for? Hmm that might just work.

Its all in the fine details. Newspapers buy Kindles at Amazon for a discounted price based on volume. They then give everyone of their subscribers a free Kindle instead of delivering the paper. People continue to keep paying for their paper but now it is delivered straight to their Kindle.
Kindle streams of revenue. Now all of the Newspaper subscribers have a kindle that they can also subscribe to national papers, buy books and do all other things that Kindles can do.

Since the newspaper just paid Amazon for a Kindle how about they get a cut on everything one of their Kindle users buy? This would help pay back the Kindle and also be another income stream from the customer and the customer wouldn’t know or care. Is this a risk? Absolutely! Would it work? Hard to say. I think I would start paying for my paper again if I got a free Kindle. When the Kindle came out I was amazed at the pricing for newspapers. Most cost as much on the Kindle as they do for a regular subscription, that is crazy. Why pay the same just for convenience. It has to cost the papers less to distribute on a Kindle once the initial switch to digital is completed.

This was a stream of consciousness post, there are lots of details I intentionally left out of missed altogether. Please tell me I am a genius, an idiot or somewhere in between in the comments. Heap praise or poke holes in this plan.

Update – It seems others are picking up on this idea.


  • Kurt Knippel
    That is an excellent idea. The physical news paper is a relic of the past and should be done away with. So much more could be done via the electronic delivery. Sadly the #1 revenue stream of the newspaper is selling ad space. The #1 worst competency of the old media is web design. They would first have to translate how the ad sales paradigm works on the Kindle....no more full color, no more inserts. Its great for the reader of course and for the environment.
  • Greg Hildebrand
    Greg,
    There was a recent article on businessinsider.com that printing and delivering the NYT costs twice as much as providing a Kindle to every subscriber. No doubt the physical newspaper is going the way of the buggy whip.
    My concern is the news gathering that these papers are providing. It seems that the journalism that once was regarded as the main product that local newspapers provided is being replaced by submitted first hand observations of participants. And as anybody involved in crime will tell you some of the most unreliable evidence is from a single witness. And honestly newspapers have been their worst enemy when it comes to quality journalism, cutting newsroom staff to save operating expenses, relying on this type of submitted copy to fill editorial space.
    In my opinion Kurt has a good handle on what is keeping the newspaper industry printing and that is the display ads and inserts. In marketing the number one statistic is how many people see my ad. The newspaper industry has done studies to show that appox. 2.5 people read every printed copy of the paper. And this number goes up with multiple days in the paper. Webstats are a little harder to play this math with. Combine this with the level of sophistication of the local retail merchants, and online sales of ads gets a little more difficult, but it is starting to change. People are beginning to realize that marketing next to local content on the World Wide Web is still marketing to local consumers.
    If you are ever in Plymouth stop by the newspaper, perhaps we can discuss this over lunch.
  • gfurry
    The advertising part is hard but not impossible. See my comment below about how coupons could work. As far as the studies are concerned I don't doubt those but there is a fairly easy way to provide better data.

    Have users for the kindle. Have a family of 5? You get your Kindle from the newspaper and they input all your family members. When dad picks up the Kindle he first clicks the dad button and then reads the digital paper. When he passes it off to mom she click the mom button and so on. While this does make it hard to share sections at the breakfast table it would tell you exactly who read what.

    Part of the reason for this post is that I see cuts being made to the talent rather than the fluff. If you cut your best talent you get what you deserve. Hopefully by cutting the press and delivery you could afford to keep the talented staff and hire some more vetters for the public submissions.

    I would love to discuss this over lunch sometime.
  • gfurry
    Color will come and the ads and coupons could work electronically. Picture an ad section on the kindle. You could click a checkbox on all the ads you want to see and all the coupons you want to use.

    The kindle would email you a page of links to the websites of the various companies or even to the papers own website where the full color ad would be shown. For coupons the selected coupons would appear on a special page that you could easily bring up while at the store so it could be hit with a scanner at the checkout counter.
  • reality check
    Why would you want to pay for news content and a Kindle when you can already get all the news you want for free on the internet via your computer, iPhone, etc? The only people interested in this deal would be those who see another reason to own a Kindle--because they are book readers. And there aren't many of those (according to parapub.com, 80% of Americans did not buy or read a book in 2007). By comparison, Pew Research says 81% of Americans consume news on a daily basis.

    Incorporating color and video into the Kindle could change all that. That technology will take a while to arrive still, unfortunately not in time to save most newspapers.

    Lastly, the math just doesn't work. Online ad revenues are only 20% of the ad revenues collected from print ads. Cutting all paper, ink, presses, delivery, etc costs does not represent 80% of the budget, so you still have an unsustainable business.
  • gfurry
    I would guess that people that still read the paper in paper form either aren't comfortable with computers or like the portability of reading in paper form. The kindle is also much easier on the eyes than a computer and/or iphone.

    There would be no print ads after shutting down the presses. The online ads and print ads would be combined. The people who pay for the paper now would continue to pay for it but they would get it on a kindle. Others I suspect would pay for a subscription to their local paper to get a free kindle. I know I would.
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