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ESPN Chicago twists the knife. How to fight back.

Posted in: Audience, Business Models, Content, New Ideas, Newspapers, Trends, by: John Duncan

Apr 13, 2009
09:21 AM

Up to this point one potential area for online competition for local newspapers remained the local stuff. The theory went something like this. Your local metro has more resource and more access to news and people than your local blogger can ever have and more depth of coverage and access to local advertising than a national brand could hope to muster so if they focus on that, they can own it. If they maintain a depth of local coverage unavailable elsewhere then maybe they can hold on to audience and even potentially hit the mother lode and actually charge for what they do.

There was something to be said for this theory. If people will only pay for something that they can't get anywhere else for free (which is pretty much a given) then maybe the local news outlet can go for genuine local depth while bigger enterprises go for broader niches and broader geographies. So CNN can own national and international news but they can't do Sacramento like the Bee. And ESPN are great for gathering the sports news of the day in one place but if I really only care about the Tampa Bay Rays then I have to head to the St Pete Times. So when ESPN launched ESPN Chicago today I have to confess that my heart sank. One of the prime deep niches for local media could have certainly been sports and if ESPN decide that they want to be broad and deep then sports could be removed from the list of local possibilities around which local news organisations could build a new business. And if ESPN can make a localised model work then every other local niche will be up for grabs by major national brands.

In fact the local haven seems increasingly like another dead end for mid-sized metros. It follows the Huffington Post’s local adventure in Chicago. And the explosion of advertising networks and the increasingly precise targeting of customers that they offer now makes it easier for local businesses to pay rock bottom prices to get localized exposure in the sort of context they choose. If ESPN’s content is as deep as the Chicago Tribune’s (it isn't yet) and they can build an audience, they no longer need a large and expensive local sales force, to monetize the audience. They won’t make a lot of revenue but much of the content they use to generate it is being produced as part of something else. So they enter Chicago with the cost base of an expensive blogging operation and the content of a major news organization. That spells newspaper killer, I’m afraid, even if the first day’s ESPNChicago is rather dull.

The sad thing is that the strategy of the broad players to also control deep niches makes a lot of sense from a consumer perspective too. With newsrooms taken apart by cuts, many local news operations are struggling to truly cover local sports to an acceptable depth let alone an untouchable one, many have pitifully weak “consumer oriented” business pages with little appeal to local business communities and they have spent a couple of years cutting local community editions to save cash in print. Newspapers opened the door that ESPN are now walking through.

Newspapers have failed to commit to anything that we would recognize as a content strategy and have now been outmaneuvered not by a Craigslist or a Facebook but by Walt bloody Disney. Newspapers are too slow, too timid and too complacent to keep up even with the big slow companies in the new market space, let alone smaller nimbler ones.

So what should newspapers do? Well, here’s my advice…

1. Get a strategy. A strategy isn’t a list of 10 things you are “focusing” on. Neither is it a bland corporate mission statement that doesn’t mean anything to anyone in your company and is so vague it doesn’t challenge any decision you make. Let me be the first to tell you that saying you aim to be a “world-class platform-neutral news information provider” just tells me you haven’t got a clue about the future, are too scared to make a guess and are hoping someone else will get it right so you can copy them. A strategy is a product of a big vision of the market and where it’s going. It’s about abandoning some markets to concentrate on others. Newspaper companies don’t have a strategy. Newspaper companies have tactics, things they do to respond to other people's strategies. Until newspapers get a strategy of their own that helps them decide what to do and what not to do, they are doomed to see all the high-potential market strategies owned by everyone else. Which leaves newspaper companies to grumble about unfair everything is and not much more.
2. Commit to something. Having a strategy is great. Executing it is another matter. If newspapers believe that local is the answer, spend money on it. Fund it by shuttering something that you don't believe is the future even if it makes money now. Make decisions that are difficult but forward looking, that look strange today but are a commitment to the future of your company, that allow your capital to follow tomorrow’s opportunity instead of today’s.
3. Fire most of the senior management. If there isn’t a strategy it’s probably because the company is top heavy with people who have too much at stake in the status quo, people for whom squeezing out another three or four years of contributions to their pension scheme is an acceptable outcome. You need to find the brightest smartest most aggressively ambitious people in your organization, the people who are frustrated by the death of the industry and feel that something could be done about it, and get them in power. If you don't employ anyone like that, do not pass Go, do not collect $200, go into Chapter 11 immediately and save your shareholders the cash it is going to cost to keep your organization on life support for the next two years.
4. Attack other media. You may have noticed that the consumer no longer really sees any difference between your newspaper, radio and TV or even between you and every website out there. So? Stop holding on to that difference. Bid for rights that radio assumes are theirs (local sports play-by-plays?) and TV does badly (live hockey/MLS/British soccer?) Steal from national brands and produce versions of what they do. Aggregate other people's content. Produce a better free classified vehicle than Craigslist. Own the local information wiki. Use your newspaper as a free marketing medium to attack opponents and steal the most lucrative parts of their audience. Be viciously competitive. Be hated. Take risks and fail efficiently. This will be easier if you did in fact follow point 3 and fired your scared process-oriented bureaucratic upper and middle management. Do stuff quick. Kill your failures quickly and move on to the next experiment. Empower people who know how to manage experiments and take risks not people who like to chair meetings.

I believe there is still time for us to save some good newspapers. But every day that we sit and stare at the headlights, makes the survival of even 15% of our industry less and less likely.