Tom Silvestri, leader of the Richmond Media Group, president and publisher of the Richmond Times-Dispatch and chairman of the American Press Institute, spoke with Business of News SmartBrief editor Adam Mazmanian about issues facing the news business in 2012.
In 2011, newspapers including the New York Times, the Boston Globe, the Minneapolis Star Tribune and others rolled out some form of metered access to their Web content. How do you think pay walls fit in as part of a newspaper’s overall revenue model?
The key word in your question is “fit.” Our entire industry is trying to diversify its revenue sources and find new sources of revenues. What we’re finding is that pay walls, and there are some people in our industry who don’t like this term, are not a silver bullet or an elixir.
I wouldn’t bank on it for a substantial injection of revenue, but it does help broaden the revenue model by stressing the importance of content and our need to produce premium, distinct content. Markets are going to discriminate on what’s worth paying for and what isn’t, and it gives us the opportunity to get back to the premium content arena.
Putting my publisher hat on here, we’ve been able to study pay wall initiatives, and our approach is to take a more holistic, long-term view — not ignoring the potential dollars that come in from a pay wall, but to do it in a way that mirrors our “digital first” effort. But it’s going to be a slow go, and I wouldn’t bet the ranch on it. It’s a piece of the puzzle that includes content, distribution and vendor partnerships. But hats off to those who have tried it, provided us with data points and have been learning as they go.
Groupon went public in 2011, but it appears that the social-shopping trend has lost some momentum. Gannett is pushing into this space, as are other media companies. What can a local newspaper bring to the table that a national franchise such as Groupon and LivingSocial doesn’t have?
At the end of the day, for newspapers like mine, it’s all about local. The key questions are: Do you have good offers, attractive products and does it roll up into attractive deals for the customer? If you have a “no” in any of those areas, you are going to fall short. You could try the “good enough” model, but in the long term I don’t think you can win with a lesser formula.
All publishers should consider this: Is it better to focus on the next thing? Are you late to the dance? Should you use partnerships and other arrangements? We hear from our customers, there are so many deals coming at them that maybe they’re clogged.
More and more readers are accessing content on mobile devices and tablets. What can newspapers do from a content standpoint to differentiate their mobile product from their desktop edition and from print?
Mobile is indeed different. And it’s important to think about this every day. What I love about mobile is that because it’s different, it’s really a wide path to the future. It may not seem like a wide path. It may seem like a bike path. What’s neat about mobile is that audience rewards are larger. We’ve seen some success on delivering immediacy value and guidebook approaches. Once you figured out the immediacy value, you can take this back to news.
Reinventing the delivery system is really exciting and scary. The guidebook approach is just using the technology to get people an answer right off the bat. We used a mobile app for the three-day Richmond Folk Festival. It solved the problem of how do you get people from one event to another at night when people can’t see the paper.
You can’t force it. It’s got to happen naturally. You can’t get too far ahead of the customer, and you can’t lag too far behind the customer. It’s something we’re going to spend a lot of time on in 2012.
Increasingly newspapers are merging their Web and print operations — both in advertising and editorial. Is this a welcome development? Are there reasons to maintain separate print and online silos?
We have spent, and everybody is spending a lot of time on this. I’m almost weary about organizational structure. Bundling works, but digital still needs to carve out paths for specialists. Let’s take the case of a sales operation. When you’re the largest sales force, there’s only so many reinventions you can undergo. Bundling works — for product, staff and audience. But what can’t be lost here is that you’re not creating silos by creating specialists — you’re playing smart by anticipating the next wave.
The other thing we’ve learned, there’s an education with the customers. You have to allow the customer time to be trained, just as if they were inside your building. Yes, we could all be multimedia and we should, but you have to anticipate the wave of innovations and breakthroughs and keep the motor running on a digital team that’s ready to roll, so you don’t have gaps and interruptions.
What do you see in store for the newspaper industry in 2012? What kinds of innovations do you see driving revenues?
My original thought was that I’d have to charge you for the answer. One of the most overlooked innovations is taking the parts of the legacy business and reinventing in the digital space. That will continue. There are things that have worked well in print that give the appearance of not working well in digital. We have to move forward with changing those — things like political reporting, classified liners, marketing in social space.
I might offer five guiding policies for getting into the future.
First, I think it’s a healthy exercise to run through a scenario that your operation is not built to grow. When you do that, it’s going to make your reinvention more purposeful.
The second one is you ask, how do you move more resources into the digital space — how do you make each position a purposeful investment in the future? All of our positions are very important, but how do you make them purposeful for the future that’s going to be more customer engagement, more community engagement. You have to have a workforce of the future plan. Every time you get a position open, are you leaning into the future or just doing today’s work?
The third is a need to improve on inspiration as the first step in encouraging innovation in both big and small ways.
Fourth, lots of us have some space in our building because we don’t have as many workers. Can you turn your buildings into incubators? Can you build collaboration with businesses that are great match-ups for you?
The fifth thing is the oddest thing, but it’s so basic. My company is over 160 years old and we have a principle of customer service excellence in delivering the newspaper and publishing ads. But what doesn’t get a lot of ink is reinventing customer service in the digital space. It is a different creature.
I can’t stress enough the importance of establishing customer service in digital space. If you fail there, your customer is not as patient or loyal. If you do it right, you move your brand into that trusted brand space which people view as being reliable.
Image courtesy of Tom Silvestri.
This question-and-answer session was produced as part of SmartBrief’s 2011 Year-End Reports, which capture the year’s most important stories in each industry. Sign up now for Business of News SmartBrief to get tomorrow’s report on the top must-read stories for news media professionals.