I don’t, as a rule, read the HBS Alumni Magazine too closely, but here is an interesting perspective on the decline of the newspaper industry from Roben Farzad, MBA ’05 and business journalist, who paints a bleak picture of the newspaper industry, declining in revenues and importance as the barbarians digitally storm in with their click-counters and lack of respect for the sanctity of the fourth estate and its industrious acolytes. There is little hope, he says, as the fundamentals of the industry are disappearing so fast that not even patient money taking over to run newspapers as museums would help much.
I would like to point Roben to the case, developed after he finished HBS, of Schibsted ASA, a Norwegian media company that, so far, is one of the few media houses that successfully has managed the transition to the web. As one executive at monster.com said to me recently: We dominate everywhere in Europe, except Norway and Spain, where Schibsted dominate. Schibsted was early onto the Internet, and managed to have a long term view (15 years) on their investments and the luck of selling out a few of their early investments before the dot-com boom, so that their portfolio did not look totally hopeless even in 2002. It helps, of course, that its top management (particularly Kjell Aamot) was convinced, very early, that the Internet was here to stay and fundamentally would change the newspaper business.
Now, their Internet revenues exceed those from their newspapers (partially because they dominate classifieds in Norway with finn.no), more people get their news from their web sites than from their (large) newspapers. VG.no, the largest news web site, gets half as many hits as Nytimes.com (and we are less than 5m people here in Norway). VG.no breaks every rule of good web design and, precisely because of that (according to Torry Pedersen, its editor) encourages browsing. Incidentally, Torry recently became editor of both the web site and the newspaper (which, at some point in the not-too-distant future, may become free).
And yes, they have different journalists working on the net and the paper. Only 10% of the material is cross-posted, because Torry wants it that way. No mixing – these are different media and need different kinds of people.
Schibsted is by no means out of the woods yet – but they have a far better chance than any other media group I know of. I think they should focus more on their considerable capability in search technology to create more targeted and specialized, "automated" web sites, as well as get their hand more firmly in search-based advertising. And there is still work to do on integration of their activities across their various media outlets. But Schibsted did something while the rest of the media industry (and most of its journalists) lamented the coming of this vulgarity called the Internet. And that is the beauty and the fear of disruptive technologies – that by the time you understand their impact, it is too late for the majority of companies. And those who work there.
The funny thing is, if you ask journalism students, the majority of them want to work for paper papers, not this vulgar web thing, where you have to publish right away, write quickly, and instantly know whether you are being read or not. A paper journalist files one item per day. A web journalist, according to figures floating around among journalists here in Oslo, posts, on average, six.
I recently heard an anecdote about a rock singer who no longer can make money selling records, so he had to do many more concerts to maintain his income. That forced him to lay of cocaine, since he now had to go to work much more often.
A few years ago, the Oslo press club had to close for lack of customers. Presumably, they were at work. What a loss….