Revolution is not for the faint of heart.
Two central truths about our business become clearer every day: first, that there is an enduring need and opportunity for public service journalism; and second, that the current transition, involving everything from audience relationships to revenue models, is indeed revolutionary.
It is our good fortune to be the generation entrusted with this rebirth, though not everybody will agree with that. Some of you will think we’re going too far as we transform our operations, priorities and relationships. Many will criticize us for moving too slowly. Tragically, some of you will give up and quit too soon.
But there’s a profoundly important role in the evolving information ecology for the journalism of verification, organized responsively in an outside/in relationship with audiences, drawing upon networked resources, founded on trust and reputation. We must be prepared to do pretty much whatever it takes to our business operations and organizational charts to get us there.
Nearly every day I discuss changes that would have been heresy for newspaper editors even 10 years ago. Things that once seemed like tenets now look like artifacts. The pace of change and the momentum of the imperatives we face truly are disorienting.
Our stock price is in the tank. Bummer. (I've been accumulating McClatchy stock longer than most of you). Year-over-year revenues have been declining. Businesses that were mainstays of our prosperity – Detroit car markers, real estate brokerages – are themselves in turmoil. Wall Street is not happy; the relentless downward trend is disappointing, no doubt about it. Investors who own millions of shares and employees who own hundreds all share the discomfort.
Some of this is the particular pain of the housing meltdown and related economic woes. Beyond that, many of our business fundamentals really are different now. As a result newspaper publishing is moving from being one of the country’s last vertically integrated industries to being something else – a model being invented as we go.
Some of the restructuring is easy enough to understand, even if it feels bad. People who answer phones in circulation are worth every bit as much as people in newsrooms, of course – but their jobs are not equally central to the mission of producing public service journalism. We serve our mission better the more efficient we become.
So we’re a mission-driven company, right? How do you decide what’s central? Does it matter if you compile sports agate and NBA game summaries on your own copy desk? If the state public offices commission has a transparent, easily accessible campaign finance database online, should you try to duplicate that or just link it? If there are already 50 photographers covering a wildfire, when do you send your own?
These questions keep getting harder. If the future of the enterprise depends on continuing to grow audience (and it does), is it right to reassign staffers from features to a social networking site for young mothers? In a culture that prides itself on depth and subtlety of its journalism, how much can you justify reassigning reporters to early-morning shifts to populate the website with breaking news for early risers?
Though it be littered with such tough questions, I am not afraid of our future. Every day I watch McClatchy newsrooms adapt and extend, producing sustained public service journalism for audiences that have never been bigger. These growing audiences are at the heart of both our mission and our business model, a congruence for which I give thanks daily. (It need not necessarily have been so). We’re getting better at selling and profiting from them, even as we get more efficient and less expensive to operate; those lines will cross, and meanwhile our legacy business produces comfortable profit margins to see us across the changes.
The music’s not in the piano. Storytellers always occupy a central role in society, and there is no story more compelling than the truth.
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Largely a very good essay, and a refreshing acknowledgement of the difficulty of the task. But calling the stock price a "bummer" is taking it way too lightly. McClatchy is now worth less than half of its own debt. Buying Knight Ridder was a mistake and seriously hampers the company's ability to survive, much less re-invent itself.
ReplyDeleteThanks for the kind words, but ...
ReplyDeleteWhile I certainly don't intend to take the stock price lightly, your comments about what the company is "worth" are seriously off base. Yes, the market cap has fallen dramatically, but that in itself is hardly the measure of the company's value. McClatchy is a strongly profitable company and we're applying free cash to debt repayment at a fast clip. Debt was reduced by hundreds of millions this year and is forecast to be about $2 billion by the end of next year. Our cash flow to interest ratios are strong and the family shareholders and board of directors are united in supporting us as we work through this transition.
The Knight Ridder papers we retained, by the way, have improved McClatchy's performance; our revenue performance is better with them than it would have been without. KRI's internet resources, like Career Builder, also provide an import asset.
Working through this combination of advertising downturn *and* structural change is hard, but it's definitely unrealistic to mischaracterize it as worse than it is.
I wish I could believe you. You speak often of "trust" but when your own VPs spout obvious falsehoods (http://www.poynter.org/column.asp?id=45&aid=134102) trust is no longer something you have in the bank.
ReplyDeleteI'd have to agree. "Truth to Power" is a slogan McClatchy applies in its words toward others, not itself.
ReplyDeleteI suppose you're referring to Sac Bee's Ed Canale saying that ad production outsourcing "benefits customers."
ReplyDeleteI wouldn't have said it just that way; obviously the decision also involves money and saving expenses. But it does happen to be true, both in specific and general terms, that customers can benefit.
As I mentioned in the post above, becoming more efficient at things like ad production or taking circulation calls enables us to sustain larger newsrooms and devote more effort to our prime mission. That's a hard thing to do, but I have no doubts or qualms about it being the right thing.
Furthermore, it's also possible to improve customer service by outsourcing. For example, about 75% of the Filipino staffers who now handle many circulation calls have 4-year college degrees, and 100% have at least a 2-year degree. The wages paid in U.S. phone rooms don't attract people with that level of education or skill, so the fact is customers may very well be dealing with people who are better prepared and able to help them.
Is outsourcing jobs pleasant? No. But that doesn't mean customers might not benefit.
These are complex and difficult times for many industries, ours most certainly included. One thing we know for sure is that simpleminded, categorical assertions don't do much to advance either understanding or solutions.