This article below, from the Thursday 9/28 edition of USA Today, was written for the newspaper business. But substitute "radio" for "newspaper" and you have the prescription that was delivered so well at Summit 11 in back-to-back panels from Gordon Borrell (Borrell Associates) and Jason Calacanis (Weblogs, Inc./AOL).
Gordon provided the data - how local online revenue is just waiting for radio to earn its fare share. He pointed out that stations are so focused on attacking one another to capture the diminishing share of local radio dollars that they're missing the larger opportunity in online revenue.
And then Jason's hard-hitting speech went right to the heart of the problem by pointing out that adding units and cutting costs are the quickest way to make a tough problem even worse. He underscored the notion that radio has some great assets - reach, sales, and production - all of which can be marshalled toward the creation of content that can be sold and marketed to local advertisers. As he pointed out, none of the biggest Internet players have figured out the local opportunity. This is what radio has always understood.
To reinvent radio (or as the NAB put it, "Redefine Radio"), it's going to take some big thinkers in our industry who aren't afraid to question the traditional business model. Gordon Borrell, Jason Calacanis - and now this Newspaper Next study - lay down the bread crumbs. Radio needs to quickly and aggressively rethink its strategy. The online train is leaving the station.
NEW YORK — Newspapers grappling with declining circulation and profit margins can turn themselves around if they quickly develop publications and affiliated websites packed with local information, according to an eagerly awaited industry report Wednesday.
"The land rush to meet local information needs has barely begun," says Newspaper Next: The Transformation Project, based on a study of business models and practices sponsored by the American Press Institute.
For example, the report says that newspapers might assemble databases about parks, medical facilities and restaurants, information about schools, consumer-supplied ratings for restaurants, mechanics and contractors, as well as chat groups for parents and shoppers.
The report also says dailies could produce special editions for commuters and niche publications for tourists, young adults, parents, seniors, non-English speakers and sports and entertainment fans.
Along with the local initiatives, Newspaper Next urges papers to develop online ad standards and joint sales teams to create a single national ad buy for their websites.
"We thought that was fascinating," says Stephen Gray, the project's managing director. "Newspaper websites (collectively) have a substantial user base that can be competitive" with Internet giants, including Google and Yahoo.
Industry-education group API launched the project with Innosight, a consulting firm that specializes in innovation led by Harvard Business School professor Clayton Christensen.
The report had tough words for the industry on that score, giving it a D+ grade for not "looking beyond the traditional revenue model. Most signs indicate that the newspaper itself is likely to shrink into a boutique product, serving an ever-smaller audience and advertiser base," it says. "The pace of shrinkage appears to be accelerating."
Along those lines, Bear Stearns on Wednesday lowered its 2007 earnings estimates for the industry, citing a faster-than-expected slowdown in ad sales.
To change that pattern, Newspaper Next urges newspapers to "think like a disrupter" in their markets and experiment with a portfolio of ventures. "What are people trying to get done in their lives? Where do they look for solutions?" says Gray.
That effort to reach people who aren't necessarily interested in traditional news does not necessarily conflict with newspapers' mission to promote civic discourse. "The future of journalism and the civic mission of newspaper companies will be much easier to maintain if newspaper companies can develop profitable new business models to support them," the report says.
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