Google's Eric Schmidt Gives Whining Newspapers Some Tough Love

Congratulations are in order to Google CEO Eric Schmidt for sticking it to all the whining newspaper companies by giving them some tough love.  They deserve it.  This is a group of managers that have ignored the changing landscape in their business for YEARS.  And now, they sit and complain about Google who they think isn't doing them any favors.  Before I comment further let's take a look at a few key points from Eric's article:

"So when I think about the current crisis in the print industry, this is where I begin—a traditional technology struggling to adapt to a new, disruptive world. It is a familiar story: It was the arrival of radio and television that started the decline of newspaper circulation. Afternoon newspapers were the first casualties. 

Then the advent of 24-hour news transformed what was in the morning papers literally into old news.  Now the Internet has broken down the entire news package with articles read individually, reached from a blog or search engine, and abandoned if there is no good reason to hang around once the story is finished. It's what we have come to call internally the atomic unit of consumption."

Newspapers historically had two revenue models - subscription and advertising.  Now, I've always hated newspaper advertising because well, it doesn't work anymore, it is boring, and you can't track a damn thing about it.  However, the folks that have been running these businesses have sat around watching their classifieds get eaten up by eBay, Craigslist, and Monster.com.  

Then along came real advertisers who realized that you can't trust a subscription number from a newspaper company and you have ZERO idea of the results of your print campaign; the only valid reason to advertise in a newspaper is at the hyper local level like my own Observer Tribune for Long Valley-Chester-Mendham and that's because their website sucks.  Anyone, the most popular reason marketers advertise in a newspaper today is to feed their own CEO's massive ego.

So what's an old monolithic, plodding company supposed to do?  How about borrow a page from other old monolithic companies - like the old telephone business.  You remember calling cards don't you?  That cute little plastic card you used to use to make calls from pay phones?  Well you can still get them and if you used them at one of those quaint things, you pay super high rates for that convenience.  And that's what newspapers should do with their paper copies.  How about starting here....

1. Carve off a significant part of their organization and focus EVERYTHING on their internet business. EVERYTHING.  You are nothing without it.  
2. Repeat after me - Google is my friend.  Google is my friend.  Google sends free traffic my way.  Yes perhaps you don't get subscriptions from it and perhaps you want to try and shut them off, but then at least work with someone else who provides the same kind of tools (here's a hint, there isn't anyone right now).  At least look at Google as a free advertising vehicle.  You remember what those are don't you?  That's the product that you sell to poor unsuspecting marketers today... 
3. Then whatever is left behind should turn into a cash cow - jack up the paper rates even further.  You like reading the Sunday paper while eating breakfast - great, pay more for it.  You like reading the sports page in the can - great pay more for that right. You need an old paper edition in your hand because you don't want to carry a Kindle or an iPhone - pay more for that privilege.    
4. Stop advertising for your subscription business offline - that includes direct mail, TV, and radio; any paper subscription business advertising - just stop.  Take that money and either help your profit/loss or pay for another news reporter.  It is a COMPLETE WASTE OF TIME.  Anyone who knows about your business knows they can get a subscription; if they haven't yet, they WILL NEVER buy it and you won't get any NEW people - they all carry iPhones (not really but you get the rant).
5. Stop offering any paper discount promotion.  This is your cash cow.  You need to make sure you cover these costs and make as much money as possible - before it is all gone.  Anyone reading it in the can or Sunday morning is doing it for entertainment - make them pay for it.
6. Pay your reporters as much as you can.  That's your competitive advantage.  You create content and other than the NY Times political reporting, you create good, well researched content. 

You guys have made Google blink.  They need your content.  They are reaching out to you.  They want to help you.  You should take Schmidt's olive branch and spend a TON of time with their engineers and figure out something great.  And, please stop whining.

PardonMyFrench,

Eric