They call it Black Tuesday at the New York Times and Boston Globe where the layoffs come because the margins are squeezed.

The don’t even have a name for the buy-outs at the defiantly anti-margin San Francisco Chronicle, where leadership can neither grow revenue nor circulation and thus always loses money.

Staff reductions are also taking place in Philadelphia, and more soon at a newspapers near you.

It’s only September. For real fun, wait until October hits. You see, September and March are when the audit periods take place for the all-important “Publishers Circulation Statement” at newspapers across America. The September statement is published in October and those results are what support ad rates.

Just so there’s no October Surprise for Corante readers, here’s next month’s headlines today: In October metro newspapers across the country will post astonishing year-over-year declines.

The circulation fall-off at large metro papers will be between 9% and 15%. Smaller market and mid-sized market newspapers will fair slightly better. But across America, the average decline will be somewhere between 3% and 5% year-over-year.

Those bleak numbers will be a best-case scenario. Why? Katrina. Newspapers are the accidental beneficiary of the the Gulf Coast’s torment — readers eager for Katrina news in September will provide an offset to even the darker baseline circulation in the month. Katrina won’t help much, though, because it’s mostly a television and web story.

When the circulation numbers hit, general industry panic will ensue because they come at a time when advertisers finalize budgets for 2006. National advertisers, in particular will recoil from metro newspapers’ inability to sustain readership, much less grow it. Advertisers bet the winner. Newspapers are not acting like winners right now.

As advertisers chill, the pundits will get worked into a lather. It has already started in one quarter. And financial analysts, formerly sanguine because even weak newspapers deliver a decent margin, are sharpening their knives too. Warren Buffet himself looks to be cooling on the sector, despite his massive holding in the Washington Post.

Faced with admitting that readers duck and cover as newspapers get thrown at them, the industry will provide spin and false comfort. It will talk about “high quality readership” and suggest the fall-off is really because newspapers are dumping low-quality (i.e. free or sponsored) fake circulation.

Ummm, does that mean advertisers will get a refund from an industry that sold ads based on what it now admits was hallucinogenic circulation? No? Didn’t think so.

The “high-quality readership” blather gets scary when you ponder it at length. But we’ll leave that for another day.

The pro-industry spin will talk about combining web-site and print readers, which is disingenuous in exactly 1,465 ways. For example, does someone from Islamabad dipping in for one story on your web site have equal value to a seven-day-a- week local print subscriber? No? I’m shocked!

Nationally, the average time people spend on newspaper web sites is under four minutes. Clearly, people are reading a story or two and leaving. That’s not to say that online readership doesn’t matter — hell, online readership is my religion — but let’s be honest about how people use newspaper web sites. You can’t transform the media by lying to yourself about it.

To put the cherry on top of the “bad news is really good news” sundae, the industry will talk about “platform shift.”

Good old platform shift. It’s a popular idea among editors who, in reality, couldn’t attract a new reader with a free back massage.

The notion of platform shift — people moving from print to web just, you know, because — is a comfort to the media establishment as it suggests people still really, really, really love their product, they’re just selecting a different distribution mechanism.

Nonsense. The platform shift doctrine is a dangerous — and for some media companies, ultimately fatal — illusion that blinds the industry to necessary changes in the core product. Platform shift is the argument for the status quo: We don’t have to do anything different. We don’t have to change. We just take our super-wonderful content and shove it down a different pipe and everyone can retire happy.

Hey, platform shift is a no-brainer! Problem is, you need brains now to save newspapers. Active brains. Big ones. With fresh ideas and no fear.

Why? Because as readers flee and advertisers follow and confused newspaper executives fiddle with their Blackberries the one thing that almost certainly won’t be discussed as the cause for readership decline will be the product itself.

Of course, there is statistical support for the platform shift argument. Study after study demonstrates that readers are replacing print media with online readership of essentially the same content. The results are irrefutable. And these results are damned comforting if you’re after business-as-usual.

Unless, of course, one steps back and challenges the context in which the studies take place.

All of these studies — sincere as they are — have a pre-defined outcome. Of course people replace print with the same content online because they have no other option today. Nearly all online efforts of print companies are little more than shovelware. Media companies have not provided meaningful product differentiation between print and the web, leaving aside the odd multimedia package here and there.

Newspapers, in particular, position their online offerings as perfect substitutions for their print products and then they knit their brow at the results. Platform shift? Try platform monotony instead.

The spin of the traditional media continues: “It’s really all about brand anyway. We’re a trusted brand and we’ll blast that brand at you through any hose you want. Brand, brand, brand….”

Business thinking tends to run in generational cycles. For the last 15 years or so, the fashion in business thinking has focused on the ascendency of The Brand. Instead of being product oriented, modern companies tend to be brand driven. There are precious few companies left that fuse the two orientations — think Apple, which defines itself entirely by its products and thus gets a brilliant brand in the process.

Brand logic is the bulwark of defending the status quo. Product logic is where the revolution comes.

When it comes to a war between products and brands, products almost always win in the end.

A few examples:


  • Ford and Chevrolet had the great brands in the 1960s. In the 1970s, the Japanese ate Detroit’s well-branded lunch by focusing on products
  • Sun Microsystems assured us it was the “dot in” and could rightfully claim to be at the core of the early internet. But the company collapsed becaue its products didn’t meet the needs of the marketplace. We all used Sun. And then we all stopped using Sun. And now, some us are returning to Sun again because — amazingly — it is becoming a product-oriented company once more.
  • Sony was exciting when it was all about products. It became passe and complacent when it started to think too much about what the Sony brand meant. Now Sony is in a panic because while it’s still “the lifestyle company” it has discovered that innovation is thwared by brand logic. Sony tosses in its sleep mumbling: “Apple. Ipod. Samsung. Apple. Ipod. Apple. Apple. Apple.”
  • Microsoft has one of the best-known brands in the world and yet finds itself flailing against the open source movement, which is all about product.
  • And indeed, the internet itself is all about products. The notion of brand in this space is much more fluid than it is in other places. Brands don’t confer protection on the net, products do.

More or less, you start talking about brands when you don’t want do anything new. New ideas chase their own outcomes and sometimes those outcomes are corrosive to the brand. Tough.

Traditional media in general, and newspapers in particular, shall pay a grievous price for excessive brand consciousness. In a worldview filtered by brand, it’s logical to take what you do in print and plaster it unaltered online. In a brand-driven universe, constistency matters above all. Don’t want to violate that brand promise, do we?

And if print readers migrate to the web because you’ve given them nothing else to do, at least the brand is intact.

Or it will be until barbarian products arrive to sack your neat little branded cities.

So what if….

…newspapers were to become product focused rather than brand focused? The old modes of thinking will crumble. The print problem and the digital opportunity will be viewed as separate, but entwined, issues.

Digital media will be recognized for exactly what it is: a full medium in its own right, with its own internal logic, unique advantages, specific shortcomings and opportunities. Newspaper companies will begin to ask the proper questions about digital media, instead of simply mumbling about cannibalization and print.

What are the right questions? Just a few starters: what form should storytelling take online, what is the natural and robust role the community plays, what does geo-focused and just-in-time news delivery look like, does data presentaion itself become a story, what does true interactivity looks like, how can the social conversation be distributed now, what level of personalization is valuable and what level is numbing to the intellect, how can digital media provide real value to local advertisers?

A product-driven newpspaper would look at digital media and say, what can we do differently here and how does the digital product differentiate itself from a print product?

A product-driven newspaper would look hard at its print results and come to the only sane conclusion possible: readers leave print because the print product is broken. It’s not a product people want, so they walk away from it. They happen to walk to the web because, well, to date the industry has offered nothing more than a straight-up replacement.

Rather than shrugging and saying “it’s just the web’s fault” serious questions need to be asked about the print product. Print still works when editors and publishers — who need to start accepting real accountability — deliver the right product.

Across the world, people return to revived print products. You see it when formats change to compact, you see it when newspapers return to locally focused news (like the “20 Minutes” newspapers in Europe), you see it when upstart free newspaper products arrive and topple the 100-year-old brands of the incumbent newspaper.

A clever newspaper makes its online product do one thing and its print product do something else. Some players are finally moving in that direction. Example: the Denver Post and its smart effort at hyper-local online news.

Proper differentiation between print and online products encourages people to use both. The industry’s current direction of creating undifferentiated products simply ensure readers will switch media.

If newspapers fix their print products circulation will grow — change format, revive local coverage, alter the hierarchical approach to the news, open the ears of the newsrooms and get reporters back on the street where they belong. If you want to get really daring, re-imagine print newspapers as a three-day a week product rather than as a seven-day a week product.

As a practical matter, print newspapers only make money three days a week anyway. Imagine the interplay between a seven day a week digital product and a densely focused (and wildly profitable) three-day a week print product . Each doing different things. Each serving readers and advertisers in different ways.

Unfortunately, it appears the brand fetish/platform shift paradigm is the dominant one right now. No less than the New York Times itself is promoting this view of the world. And of course, Tuesday’s layoffs demonstrated the inevitable payoff of this old-world thinking.

Newspapers, meet precipice.

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