Newspapers can’t innovate — need “Switzerland Inc.” to survive

September 5, 2006 | Matt Marshall | Comments | |

Tom Mohr.jpgTom Mohr ran the online properties of Knight Ridder, the second largest newspaper company in the country, until it was sold to McClatchy this year.

He has just written a piece for Editor & Publisher, which is the equivalent of a Clarion call for action for the newspaper industry. The nation’s struggling newspapers desperately need to join forces and form a single company (which he calls “Switzerland Inc.”) to help them survive in the new world. Right now, they’re mired in internal bickering.

It is instructive that after twelve years of the consumer web, not a single example of breakthrough online innovation has emerged out of a newspaper company. Not in recruitment. Not in auto. Not in classifieds. Not in shopping, directory, new ad models, or content aggregation.

We know Tom from our days at the Mercury News, when we talked with him about a possible VentureBeat partnership with Knight Ridder. He was very engaged. This E&P piece is laden with examples, a great summary for those of you in the media industry. In short, old news is getting killed. The truly breakthrough online successes—Google, Yahoo!, MySpace, Amazon.com, Monster, eBay, Wikipedia, Shopzilla, etc.—have emerged from teams led by internet-savvy visionaries and loaded with tech DNA .

We bumped into Mohr recently, who told us about his new gigs. He is an “executive in residence” at Charles River Ventures, a Silicon Valley venture capital firm, which means he helps the firm evaluate new opportunities in the media space, and provide operational advice to firm’s investments in that area. He is also director of the New Media Innovation Lab at Arizona State University.

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Matt Marshall is editor and CEO of VentureBeat. Follow him on Twitter at @mmarshall, and follow VentureBeat on Twitter at @venturebeat.

  • In the past I subscribed to Forbes, Fortune, Inc, Red Herring, Venture, Computer World, Computer Reseller News, Byte, and Time. I also subscribed to The Wall Street Journal and my local newspaper. Now I subscribe to none of them. I get my news online.

    At its peak in 2000, The San Jose Mercury News had a Sunday circulation of 326,839 subscribers, according to the newspaper. Last September, the company counted 278,470 Sunday subscribers, a drop of about 15 percent. Revenue from the company's help-wanted ads fell to $18 million a year from more than $118 million, according to the paper. The newsroom was whittled to 280 people from 404, a 30 percent decline.

    Magazines are probably in the same boat, especially those that focus on the younger generation and technology savvy people. I wrote a blog on this subject today.
    http://dondodge.typepad.com/the_next_big_thing/...
  • Newspapers!? I don't have time to read thi
  • The Economist cover story from a week ago was on this same subject.
    http://www.economist.com/opinion/displayStory.c...
  • I disagree with the Manifesto's overall theme. It seems more like an approach to cram the new disruptive innovation (online opportunities) onto yesterday's processes and cost structure.

    Cramming has a very high risk of failure and typically follows these steps:

    * Dismiss the new innovation as inferior or incomplete initially;
    * Improve the new innovation to their higher standards;
    * Graft the innovation, once it is good enough, onto their current products;
    * Maintain current business model;
    * Maintain current business processes.

    Newspaper publishers can step out of the muck of the Online Manifestor and consider only four simple questions, inspired by a clear-thinker:

    * What is it that information consumers value and pay for?
    * What do newspaper companies need to become to deliver that?
    * What will we do about it?
    * If the newspaper business is dead/dying, why is Metro International expanding and gaining share in 21 countries?

    More details on disruption of the media at:

    http://www.ondisruption.com/my_weblog/media_mel...
  • I have to agree with a lot of what Mohr says, especially his comments about standardization and consolidation. What's happened in newspapers has happened in other industries -- consumption habits evolve and traditional industries get hit with newcomers taking advantage of newer technology, processes, and lower costs. Here's my own review of his article:
    http://www.ddmcd.com/newspaper_crisis.html