The purchase of Knight Ridder Inc. by McClatchy Co., announced Monday, presents possibly the best opportunity to date to experiment with the next inevitable leap in journalism: jettisoning print.
Acclaimed as one of the few exceptionally run newspaper chains in America, McClatchy is positioned to turn a community into one served solely through electronic news delivery. It's time to see if a text media provider in a given city can thrive without daily paper throwers.
Why now? The reasons are many:
1. McClatchy owns 12 dailies, and will add 20 of Knight Ridder's cities (after it sells 12 other KR properties that it doesn't want), making it the second-largest newspaper chain in the country. With a reputation for good journalism (despite a mostly liberal slant), strong management, and Internet savvy, McClatchy has the resources and the know-how to approach such an experiment intelligently. If any company can succeed making the transition, it's this one.
2. Newspapers have been profitable, even recently — just not enough for their investors and for Wall Street. The trend has been continual cost cutting, which has led to diminished reporting resources and inferior journalism. At the same time, the cost of newsprint, the largest expense for a newspaper other than payroll, has increased almost 50 percent in three years, according to the Fort Worth Star-Telegram. Why not cut this outlay completely?
3. Also expensive are the carriers to deliver those papers to homes and businesses every morning before daylight. In this digital age, paying someone to get up in the middle of the night, burn their fuel, risk their lives, and beat up their vehicles, all to place an obsolete form of news product in customers' hands, is impractical.
4. McClatchy is keeping newspapers that are essentially the only ones in the cities they serve. So the incentive for subscribers to stick with them is high. Why not try to leverage this advantage in one city to push electronic delivery? Recent estimates show that up to 75 percent of the U.S. population has access to the Internet. Perhaps McClatchy could, through surveys, identify which of its markets has the highest number of newspaper subscribers who already have web access. Then convert 'em.
Such a move would represent a forced behavioral change for many media consumers, but it's one whose time has come. A parallel exists in the photography industry, with the end of film production by Konica Minolta, and Nikon's plan to sell only digital cameras. The transition is nearly complete, and it didn't take long. Why should newspapers wait?
McClatchy will have a number of communities in which it could attempt the switch. How about a university town like State College, Pennsylvania (the Centre Daily Times), home of Penn State University, where a higher percentage of residents likely surf the Web? Or perhaps a smaller market near a large city that is in many ways served by both? For example, the Herald in Rock Hill, South Carolina, could go strictly online while residents could still access the nearby Charlotte Observer in print, if need be.
McClatchy could offer strong incentives for current subscribers to read online, or receive their publication by e-mail. Cut the cost of a subscription in half, or more, for readers to access the news electronically. Give discounts for certain numbers of clicks on advertisements.
As the Wall Street Journal asserted, readers' habits have changed while newspapers are straining to adjust. The print media no longer have all the classified advertising revenue to themselves. But they do have a near monopoly on newsgathering resources in many cities, and for that reason alone citizens will be drawn to their product, regardless of its format. McClatchy and others would do well to use that advantage to move eyeballs to a less costly model.
One misconception is that website news services cannot exist without traditional newspapers, because that is often where they get their news. “The State of the News Media 2006,” a study by the Project for Excellence in Journalism released on Monday, said “the Internet…still relies for the heart of its content on print journalism, and if papers were to vanish it is hard to see what might replace them.”
Nonsense. Among the best and most popular news providers on the World Wide Web are the newspapers themselves. One is not exclusive of the other. In individual cities that wouldn't change; those with the strongest information resources would draw the most interest.
Newspapers are playing too safe, and if they aren't careful they will go the way of other companies that stuck with outmoded technology. As “CBS Evening News” anchor Bob Schieffer told USA Today this week in an article about the importance of the Web, “If the railroads had realized that they were in the transportation business, they'd own all the airlines today. Unfortunately, they thought they were in the railroad business, and that's what we have to keep in mind here. We're in the information business.”
That truth, of course, is no different for newspapers, which need to provide their product in the way the market demands it. Everybody else will just have to learn to get with the Daily Times — online.