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Published:April 18th, 2008 05:51 EST
Fixing A Broken Industry

Fixing A Broken Industry

By Joel G. Block (Mentor/Columnist)

I have spent many years working with newspapers all over the United States and around the world on new media initiatives. We had good success with our early initiatives, but the industry was instantly overtaken by the explosion of the Internet in 1995. Nevertheless, the lessons that we learned were powerful then, and they continue to be powerful today. Unfortunately, most of the lessons have been missed by the managements of the major newspaper organizations.

I was contacted yesterday by a student at the University of Southern California (USC). She told me that she was doing a case study - addressing the issues of newspapers in a digital age. She asked if she could interview me because she had attended a lecture that I gave at the university several months earlier. During our interview, she asked several questions that were quite revealing, and it reminded me of the real issues that the newspapers face " and this prompted me to write the comments that I am sharing here.

I want this essay to get into the hands of newspaper managements around the United States. Of all the industries that I have touched in my career, the newspaper industry was filled with the nicest and most honest people. It is an industry that I truly want to help.

Several issues have affected the newspaper industry over the past 20 years and these issues have been impairing the industry`s ability to rebound. In 1995 when the Internet came onto the scene, the newspapers suddenly felt that a lot of their draw was being challenged. For the general public, the Internet came onto the scene with the force of a tidal wave, but the newspaper industry knew as early as 1992 (or even before) that some "telephonic" media was going to erupt and potentially disrupt their information franchise.

I was very vocal with the newspaper managements in 1994 about the old story that we learned in business school. I can summarize the story in one sentence: "If the train companies had seen themselves in the transportation business, then they would have owned the airlines." Likewise, the newspapers needed to see themselves not in the news business, but in the content distribution business. In 1994, I recommended to one of the largest papers in the country that they start acquiring the Internet service providers to retain that content distribution franchise.

That didn`t happen, and as a result, a horror story has ensued. For the next 10 years, we witnessed the first generation of Internet activity, which was largely a barrage of self-promotion and one-way communication. Though the Internet has evolved and become a staple of most everyone`s information diet today, the newspapers had a very difficult time figuring out how they would plug themselves into this new information age. This is especially alarming given the tremendous cost factor that the newspaper companies bear in their content creation and printing costs. The problem has been compounded by the fact that their advertisers " their sacred advertisers " now have many more alternatives that did not exist in the past. And many of these alternatives are new, exciting, and effective.

But over the past three years, a new kind of Internet has evolved - one that many people are still struggling to understand. Web 2.0 is not about professionally created content " it is actually just the opposite. Web 2.0 is all about user generated material. This new Internet steers clear of the concept of editors and any kind of filter that affects the user`s experience.

Web 2.0 is simply about user generated content. Whether it`s YouTube, Facebook, LinkedIn, MySpace, or any of the myriad of websites where users are creating material that other users look at, advertisers are pouring millions of dollars into these sites because that`s where the eyeballs are today.

Actually, user generated content provides the newspaper companies with the great crack in the wall that they had been looking for, so they can profit from the game and achieve a dramatic outcome. The irony is that most of the content that is being created in so many of these sites is so poor, so offensive and so irrelevant to most people, that the brilliance of the newspaper industry`s content creation skill can shine once again.

The content of the news industry is its distinguishing benefit.

I hope that senior management representatives of the newspaper companies will call our offices so that we can begin a dialog about invigorating what I know is one of the great industries in the United States. The newspaper industry has provided information and insight for over a century to Americans and others around the world. It`s time for the business to regain its position, improve their profitability, and provide us with information that is relevant in a way that we want to absorb it.

We`ve got a few ideas that we`d like to kick around.

About Joel G. Block, President of Growth-Logic, Inc.
Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenue and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker and advisor. To bring Joel into your company, please visit or