If Willy Loman is the stereotypical salesman who failed to adapt and evolve in the face of change, then the story can act as a metaphor for some recent failures we are witnessing in print media.
Perhaps it is not good business for a person who has made a living for most of his life from the business of the printed word to talk about the death of that industry. Blow by blow the printed word, in the form of periodicals at least, and perhaps in entirety, is losing its dominance in deference to electronic media.
Fifteen or so years ago, while sitting on a committee of fellow directors at a major southern newspaper, our strategic planning began to morph. Blind loyalty and the hurling of certain quaint epitaphs was waning. A bold belief that the printed media would always succeed, because it persisted in the hands of the reader, as opposed to the fleeting bits and bytes of electronic media was clearly becoming a faded idea. We talked about, and experimented with trying to sell the media in electronic format. Our marketing studies showed that the younger generation was not reading newspapers. They were getting their news from television, and increasingly from a new frontier, the Internet.
In the good old days, newspapers were immensely profitable enterprises. The return on investment enjoyed by newspapers was the envy of most other industries. If the auto industry was enjoying a mere 5% ROI, then the 35% ROI the newspapers stove to attain were obscene. That was our goal the first budget meeting I attended at that large southern newspaper so many years ago.
It was the rule of thumb that classified advertising paid the bills. Income generated by sales of those little ads paid all of the overhead, including newsprint and ink, labor, transportation, utility expenses-all of it! Monies generated by display advertising and circulation were the gravy, the profits that drove that 35% ROI.
Look at the classified section of the newspaper now. It is a mere ghost of what its former self. Electronic, and many times free, offerings, like Craig's List have decimated this particular sales device.
Several dynamics started the downward spiral which is the death of printed media.
First it was labor demands at some of our franchise properties in the northeastern states. Newspapers in Connecticut and New Jersey were draining a portion of the corporate profits. All of the other newspapers, including that major southern newspaper for which I worked, modified their business plans, became leaner and meaner to help maintain those corporate profits.
For 5 straight years we were asked to pare our budgets even farther. Preventative maintenance, that is where the presses were routinely maintained so catastrophic events didn't happen were curtailed. Quality waned. Papers wearing smears and roll splices that were in the past culled from the circulation were allowed to remain in the production runs.
The next resource the corporation began to decimate was human resources. They would systematically come into a department and eliminate every position. Then they would create new job descriptions, and make the staffers bid for those jobs. In most cases, the oldest, most loyal, longest term employees were replaced by younger staffers in the management positions. It was a de facto way of eliminating the highly paid people who had made the system work in the past. The long term-highly paid-employees who stayed found their salaries cut dramatically. Those who stayed were demoralized, broken, and had bad attitudes towards the company.
I understand the dynamics. I recognize it probably had to be done to maintain profitability. But unfortunately, one of the side effects of this realignment was a brain drain away from the industry. Those "highly compensated" employees were the brain trust that made the industry what it was. The ideals they harbored were what made the newspaper operate efficiently and in a quality manner. When they were displaced, all of their experience, all of their ideas and methods left with them. Quality suffered even more. Breakdowns and delays in printing became the norm instead of infrequent catastrophic events as in the past.
I only tell this story for completeness. It is not only the electronic medium which is a disruptive technology to the print industry, but a myriad of other dynamic too. The electronic medium is merely the death blow.
I have spoken only about newspapers, because of a certain expertise I have in that industry, but the woes and collapse of print media is not the private domain of newspapers, no, magazines and other periodicals have failed with alarming frequency.
In a tough economy, advertisers are less apt to spend money advertising. I imagine they too are having brainstorming and strategic planning meetings where these very subjects are being discussed. Looking for more bang for their buck, electronic media looks increasingly attractive. More print entities die.
The list of failed entities is rather extensive, and includes such names as Adventure, Giant, Metropolitan Home, Gourmet, Southern Accents, Vibe, Nickelodeon, Domino, Teen, PC Magazine, O at Home, Home, Playgirl, many, many newspapers, and the list goes on and increases almost daily.
The latest shocker, and the impetus for this column, is the announcement this week that Newsweek is curtailing their print operations, and going entirely digital. I'm sure in the corporate boardroom the demise of this entity has been a gruesome and bloody journey. I'm sure many of the same dynamics I intimated earlier in this missive played out.
Evolution in this case might be a good thing. Maybe all of us old dinosaurs who love holding the printed word in our hands, smelling the ink and paper, being able to easily go back to the beginning of a story to make sure we got it right, are as anachronistic as say the horse and wagon. In any event, the industry is changing, and quickly. I'm certain there will be even more shocking news as yet more fail and morph to a digital format, or die altogether.
Until next time-
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In to the Wind and this column are copyright 2005 - 2012 Mike Gilchrist. Readers, feel free to contact me at email@example.com via email, or write to me at P.O. Box 255, Toledo, IA 52342.