The San Jose Mercury News, my employer for more than a decade, was an early innovator in online news. The Mercury News was online before most newspapers established news websites. In 1993, the Mercury News launched Mercury Center in a partnership with America Online. Readers paid $9.95 a month for access to AOL and an expanded menu of news content that wasn’t available in the print newspaper. Just two years later, after the introduction of the Netscape browser, Mercury Center moved to the Internet.
With its technology-savvy readership in Silicon Valley, the Mercury News should have been a leader in the transition from print to digital news. A lengthy article this month in the Columbia Journalism Review examined why that didn’t happen—identifying mistakes by management at the Mercury News and the newspaper’s former parent company, Knight Ridder.
The CJR article points to numerous strategic errors in a risk-averse corporate environment. From my perspective, the biggest mistake was the establishment of a common platform and template for all of Knight Ridder’s websites. As the CJR article pointed out, this RealCities network was an effort to protect Knight Ridder’s newspapers from rivals such as Microsoft, which launched its own network of Sidewalk city guides in the late 1990s. However, as Knight Ridder executives tried to outcompete with Microsoft, they mostly ignored (and even declined opportunities to invest in) the much more disruptive threats from technology upstarts such as eBay, Craigslist, and Google. This standardized, top-down approach to digital news squelched innovation at the local level. Certainly, in the 1990s and in the past decade, many journalists were resistant to change. For them, the Internet threatened quality print journalism—and caused thousands of newspaper layoffs. In the Mercury News newsroom, however, I worked with many journalists who embraced digital media as an opportunity for new forms of storytelling—including blogs, podcasts, and multimedia. The Knight Ridder Digital platform, however, was designed for defense rather than offense. The Mercury News had to establish its own Internet addresses for its more innovative online news content.
By 2005, with Knight Ridder’s stock price in a steep decline, institutional investors forced CEO Tony Ridder and company executives to sell the chain. In turn, new owner McClatchy sold the Mercury News and other big unionized papers. The Mercury News was bought by MediaNews Group—whose CEO, Dean Singleton, was known for keeping struggling newspapers profitable by cutting staffs and consolidating operations of geographically adjacent publications. The Mercury News, for example, shared content with the Oakland Tribune, Contra Costa Times, and other newspapers in the Bay Area News Group. The newspapers also combined advertising, circulation, production, copy editing and design operations. That strategy bought the Mercury News some time, at the cost of continued newsroom layoffs. The Mercury News remained the best source for local news coverage in San Jose and Silicon Valley. By now, though, it had lost much of the attention of a high-demographic audience—readers interested in coverage of Silicon Valley’s technology industry—to rivals including smaller blogs such as TechCrunch and VentureBeat (which was established by a former Mercury News venture capital reporter), technology news sites such as CNet, and large news organizations such as The New York Times, The Wall Street Journal, and Bloomberg.
So what now? MediaNews is now controlled by hedge funds after it filed for bankruptcy to restructure its debt. John Paton, who engineered a “digital first” turnaround strategy as CEO of newspaper chain Journal Register, is now also CEO of MediaNews. According to The New York Times, Paton doesn’t have one big easy answer for the transition from print to digital. Instead, he has offered numerous smaller steps—including increasing incentives for selling digital advertising, outsourcing everything except news and sales, and inviting the community to contribute content. He doesn’t rule out additional layoffs. I’m hopeful, though, that this strategy will buy the Mercury News and the talented journalists who work there even more time.
A metro newspaper and website’s “digital first” strategy probably can’t succeed without an emphasis on local news and the local audience. One of the strengths of the Internet, however, is that it allows global distribution of content—at negligible additional expense. At the Columbia Missourian, for example, a large part of online traffic comes from readers in Columbia who are interested in news about local government, education, or public safety. However, many other readers live elsewhere, but have ties to Columbia. They’re very interested in news about the University of Missouri, especially Missouri football and basketball, but not local news staples. The San Jose Mercury News, which owns the valuable SiliconValley.com Internet address, has a large global readership interested in the technology industry. Other newspapers also have important institutions or industries in their regions with similar ties outside their geographic communities. It’s important to cover these institutions and industries from a news-value perspective. They also provide opportunities for readership and revenue growth that publishers shouldn’t ignore as they adopt “digital first” strategies.
Additional sources:
Carr, D. (2011, November 13). Newspapers’ digital apostle. The New York Times. Retrieved from https://www.nytimes.com/2011/11/14/business/media/paton-prepares-his-newspapers-for-a-world-without-print.html.
Shapiro, M. (2011, November/December). The newspaper that almost seized the future. Columbia Journalism Review. Retrieved from https://www.nytimes.com/2011/11/14/business/media/paton-prepares-his-newspapers-for-a-world-without-print.html.
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