“Newspapers have a terrible future.” – Warren Buffett, Owner of The Buffalo News, 11/3/2009

Yes, yes they do.  The finer point here is that journalism has an incredibly bright future.

The problem, as I see it, is that newspapers and the corporations that own them are risk-averse creatures.  They are not looking to revolutionize what they do as there are too many people in their employ and too many investors to satisfy.  Innovation rarely, if ever, comes from industry stalwarts.  It emerges when a market opportunity presents itself to an entrepreneur who has the capital and ability to take risks.

As it stands, circulation numbers for The Buffalo News are down again, but they have added a new revenue stream to the corporation as they are now the local printer for The New York Times.

“The Times deal is another example of how we are diversifying our business,” News’ senior vice president of marketing, Dottie Gallagher-Cohen said.

Well, kind of, but not really.  That’s like Chrysler saying they are diversifying their struggling automobile business by also making automobiles.  Diversifying the business would be expanding into a new market vertical or innovating with a new product.  However, this represents a key problem with the survival of newspapers.  They aren’t willing to expand the business footprint in any way that would put their primary revenue stream at risk.  I can’t blame them, I see the bottom line thinking which promotes that logic, I really do.

However, those in charge conflate the medium with the media.  They are unable or unwilling to envision or plan for a future in which the news of the day is not printed on paper and taken to to the reader.  What has happened in the last several years is that consumers have essentially said that the value they derive from the product at .75 per copy is not worth their daily investment.  It’s a rebuke of the business model, not necessarily of the content.  Well, it’s not a rebuke of the quality content, but it’s a rebuke of the extraneous content like stock price listings, classified ads, feature fluff found on other local outlets and AP Wire stories.

So, what is a newspaper like The Buffalo News to do?  After all, they are the paper of record in a one newspaper town and have the luxury to experiment with new models unlike their debt-laden brethren in other cities.

Well, since no one asked and I’ve spent the better part of the last year writing about it, I’ll tell you exactly what they can do.  Also, they better hurry up and try or some new media outlet might finally get access to the necessary capital and do it on their own…wink/wink, nudge/nudge

The Buffalo News should stop dithering about with pointless add-on, out of the box social networks like the KickApps fueled MyBuffalo.com and their vertical content network featuring cars and brides and other things that aren’t journalism.  I mean, why not just sell funny hats as an additional revenue stream?  It makes about as much sense as attaching these niche sites to your media outlet.

Spin off a hyperlocal, open source journalism site, let’s call it WNYNow.com for the sake of argument.  Assign an editor, a multimedia editor, a web design staff, videographers, 5-7 writers and a couple of photographers who will only work on the site.  Starting a separate business entity allows it to operate free from the arcane union rules and also allows for market based salaries and tighter cost controls.  The content is only available online and aside from advertising or marketing in the print edition, these two entities will operate separately and independently.

For enterprise or investigative pieces, allow the writers to pitch stories not to the editors, but to the readership.  They should report their story openly, asking for assistance and feedback from the readers as each story develops.  Ultimately, the readers have an ownership stake in the story and turn into advocates for your content.  They amplify your stories using social media and become ambassadors.

For day to day reporting, the editor and writers post an open calendar of events, meetings and press events that can be covered.  Ask the readers to assign a priority level and assign your staff accordingly.  They get to have a voice in the editorial assignments and are also engaged as they become part of the news process.  Utilize relationships with existing alternative media outlets in town to aggregate their coverage/content and curate the good information into a larger, co-operative piece of multimedia journalism.

You’ll build a loyal community of readers and you will know who they are, what they like, where they live and what their interests are.  You have a valuable community into which you are now able to sell access.  That’s where you begin to monetize.

As the community around your online outlet grows and traffic increases, you begin to reduce the number of pages you print in the daily paper.  As you continue the process, print reporters from the newspaper either retire, go elsewhere, or accept a non-union contract to work for the online outlet.  Eventually, the output flips and you’re printing a newspaper just a couple times each week or even just once per week while your daily reporting functions have moved online.  Profit margins will eventually grow online as the cost of provisioning the news decreases significantly since you no longer need to procure paper and ink.  You can also generate revenue from your existing print assets as you can continue to run a specialty print shop for other clients.

In short, open up the process and build a community around your core product…journalism.  After all, newspapers and journalism are two separate things and as newspapers die, the transition to online media is not an evolution, it’s a revolution.  Plan accordingly.

I know I am.