Mercury News Reaches Out For Help

I've always enjoyed Mike Cassidy, one of a seemingly dwindling number of columnists at the San Jose Mercury News, the self-proclaimed newspaper of Silicon Valley. So I had to respect his cover story column in Sunday's paper entitled It's Time For a Frank Talk with Readers about The Mercury News.

Excerpt:

Newspapers across the country are in trouble. The union representing editorial and business employees at the San Francisco Chronicle, which had significant layoffs in the spring, said recently that more job cuts are expected. Some papers have closed. Others will. Five years ago, San Jose without the Mercury News was unthinkable. Now, well, now we know the newspaper business is changing very rapidly — and not for the better.

So, it's time to talk. But this conversation shouldn't be about the problems facing the newspaper industry and the Mercury News. This should be about solutions — new, brilliant, creative solutions. The Mercury News remains a powerhouse of talent, intellect and dedication. The question is: what do you want us to do with what we have assembled right here and right now?

Yes, there is some urgency.

The Mercury News is already greatly diminished. As advertising revenue has declined in recent years, we've killed features and sections that aren't coming back. We've closed bureaus. And we've lost hundreds of talented journalists through layoffs and resignations. A news operation that bustled with about 400 journalists in 2000 is now down to about 125.

I was happy to see a newspaper asking its readers about where to go from here. In an industry that is often all too product centric, it's great to see people who are thinking about the customer.

To me, answering how to save newspapers is pretty much the same as answering how to save any business:

• What needs can it meet better than anyone in the world?
• How can it make money in so doing?

The Mercury News is an information business. So what information needs can it meet better than anyone else? None, you might think. In an era of free, real-time, Internet-delivered news, there's no room for any newspaper, you might say.

Not so fast. I'll take myself as a case study. Here's what I read, news-wise:

• Print magazines: Economist, Business Week, Forbes
  
• RSS feeds: over 100, usually technology business or software focused
  
• Portal: MyYahoo, usually 95% redundant to the aggregate content of my RSS feeds, but for some reason I skim it anyway
  
• Newspapers: The New York Times, San Jose Mercury News (aka, The Merc), Los Altos Town Crier

When I lived in Manhattan, I read The Wall Street Journal as my "local" paper because I worked on Wall Street. When I lived in Paris, I read Libération, largely because my French tutor convinced me its writing was best matched to my level of French. (I sometimes wonder if it wasn't a clever hoax to get someone in la direction reading a socialist newspaper.) But I digress.

My point is I've consistently had room in my life for three newspapers: (1) a big national/world one, (2) a local one, and (3) a hyper-local one. Whether it's now with the New York Times, The Merc, and the Town Crier or back in college with The Wall Street Journal, the San Francisco Chronicle, and The Daily Californian, the mix is still there.

So let's assume there's meaning in that pattern. I have three broad classes of information needs. So what should the Mercury News do?

• Leave national/world reporting to someone else. They cannot compete.
• Leave hyper-local reporting to someone else. They will never beat the Town Crier at covering my daughter's soccer team or the local school board.

What's left? Local. And what does local mean in Silicon Valley? Happily, two very clear things:

• Business. Silicon Valley lives for business. Venture capital. Startups. Big titans and their stumbles and conquests. Projects spinning out of Stanford and Cal. New disruptive technologies. New business models.
  

• Sports. The San Jose Sharks. The San Jose Earthquakes. The San Francisco Giants. The Oakland As. The 49ers. The Raiders. The FC Pride.
  

To me, it's a classic case of where across-the-board cuts will destroy you. When The Merc cuts back on overall resources, it should be increasing the relative resources -- and probably the absolute ones as well -- devoted to the areas where they can provide unique value for their readers.

Many are the days when I think about canceling my subscription to a paper that's routinely so thin it doubles over under the pressure of the rubber band, and when I hear the New York Times will be launching an SF Bay Area edition this Fall. But why don't I cancel? Because I'm a season ticket holder to the Sharks and I love the Merc's Shark coverage. And I'm a participant in Silicon Valley and they (used to) have pretty good coverage of local business.

My sense is The Merc is cutting wrong. They are going across-the-board. The business section is badly anemic of late and I view it as one of their two hopes going forward.

Once they've decide on "a strategy" -- i.e., which few things they can reasonably do better than anyone in the world -- then they can charge for it.

Information "doesn't want to be free." Information doesn't want anything at all. The people who produce information want to produce it because they see a return worth their investment. Sometimes that's direct compensation, as in paid subscription. Sometimes it's indirect compensation through advertising. Sometimes, it's fame which is either intrinsically valued or used as a means to land high-paid speeches and consulting gigs. Sometimes, it's a hope that you'll (quite indirectly) end up selling more software as a result.

I think newspapers need to forget the obsession of "do we charge?" for online vs. print. The model should be:

• We make great content.
• We charge for it.
• We don't care how you want it delivered.

Think: check here to subscribe to The Merc's (content). Check here to pay additional supplement if you want us to print it and throw it squarely under the middle of your car each morning.

And charging for content doesn't mean firewalling off everything. Sure they should experiment with various forms of teasers (e.g., selected free stories, free first few paragraphs, perhaps free archives). But the basic model should be: we make great content, better than you can get anywhere else in our chosen domains, and we charge for it.

The more newspapers that do this, the healthier the newspaper business will become. And those who can't charge for content will no longer be able to blame the Internet. The light of day will show that lack of value-added, not the Internet, was their undoing. (Think: many sectors of the B2B trade press.)

While I'm at it, what shouldn't the folks at The Merc be doing?

• Trying to figure out how to charge for information that's free elsewhere
• Kidding themselves about where they can and cannot really provide information that's better than anyone else in the world
• Thinking about the past, the good old days, et cetera. It's all about going forward.

In the end, I don't know if the business I've described is bigger or smaller than than their old one. It's probably smaller initially, but with creativity, you might be able to build it into something bigger. But the one thing I do know is that it's a business. It's sustainable. It has competitive advantage. And it's not predicated on the assumptions of a disappearing past.