One thing I look for in a successful publishing house are its long-term goals. Sure, there are plans and then there is execution. Just because someone paints a nice picture of the future does not mean it will come true. But long-term thinking, a willingness to accept short-term loss and investing in your core product are great starting points.
Just look at the world’s most successful newsrooms in terms of digital subscribers – The New York Times and Washington Post. Both have presented their long-term goals and are investing in their core product (in the case of The Post, even expanding). The number of journalists working for both has grown in recent years.
The idea of the newsroom as a profit centre – rather than a cost to be trimmed – is not something new. People like Doug Smith, ex-McKinsey consultant and change management guru, have long spread the word among newsrooms on both sides of the Atlantic.
Sure, the owners of both American papers have deep pockets. Especially Washington Post owner Jeff Bezos, although The Post’s management is always eager to add that the billionaire owner expects the paper to be sustainable in the long-term.
That long-term view is a core piece of Bezos’ approach. As you might read in the many books on the topic (for example Brad Stone’s latest: Amazon Unbound), it’s what led Amazon to become one of the world’s most powerful companies.
Looking far into the future is the secret to many successful firms. Luckily there are lessons, like breadcrumbs, anyone who wants to futureproof their business can follow. Some are tested, some have been repeated by so many I am wiling to add them to the mix.
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The Financial Times recently published a profile of book publisher James Daunt who rescued UK chain Waterstones. The title read “The Englishman trying to save American bookstores from Amazon”. I was amazed how similar the Waterstones story was to the media’s relationship with Big Tech.
My takeaways from reading the profile: give staff more autonomy and trust; obsess over service; lose easy, dirty money to be more sustainable in the long run; less but better employees. Let me break them down.
Daunt started out as a bookstore owner and found out the hard way it is not an easy business. Just like the business of journalism (a publisher I know loves to repeat it is the worst business as you cannot shape the product – independent journalism – as doing so would remove the “independent” part).
Daunt’s ideas might sound like a no-brainer today. But remember he came up with them decades ago (and many successfully copied them since). One was for him and his staff to recommend books they had actually read and enjoyed, rather than publishers’ favourites.
They also displayed as many books as possible with their covers face out, sometimes adding handwritten notes of recommendation. Daunt thought of bookshops as clubs where customers come not only to shop but also to socialize and consult staff as experts.
He applied these tactics at Waterstones, after being asked to rescue the chain in 2011. And then again with Barnes & Noble in the US (where he was asked to replicate the Waterstones success).
But first came staff cuts, which purged the ranks of all but the most devoted book lovers. Those staff that were left, he knew, could have more autonomy and freedom.
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Something similar happened to Netflix, as CEO Reed Hastings recalled in his book No Rules Rules. In 2000 the company was quickly running out of money and he was forced to let a third of his employees go. He tasked HR to identify the low performers – out of 120 employees, 80 remained. Surprisingly, productivity increased.
As Hastings’ co-author Erin Meyer, a professor at top international business school INSEAD, pointed out that academic research backs this up. Studies have found that just one bad employee can corrupt the whole team and reduce overall performance by up to 30%.
Another lesson from Daunt was that he refused to take millions from publishers to promote their books. He reasoned that it made all bookstores look the same with the same titles displayed. No surprise for visitors, no personalisation depending on a store’s location.
After reading this I thought such “dirty money” is when publishers are willing to stuff their websites with aggressive and intrusive display ads. This downgrades the experience of the reader and possible future subscriber.
Sure, display ads provide quick money. But as recent years have shown, the income is not what it once was and that is also the reason publishers turn to subscriptions and memberships.
But many are not willing to lose money in the short-term to attract subscribers and keep taking money for ads readers keep telling them they hate. The same readers that publishers hope to turn into subscribers. How do you want to convince an angry person to give you money?
Daunt’s tactic worked, he lost millions in the short run but was able to make it up in the long run. Then he could hire more employees and build back a declining business.
(Just to note, the Financial Times also pointed out Daunt’s personal and his strategy’s downsides but those are not a concern of this column).
In his 2021 book Futureproof: 9 Rules for Humans in the Age of Automation, technology columnist for The New York Times Kevin Roose lays out how to prepare for the upcoming (or already happening, per Roose) industrial revolution led by AI and automation.
While explaining the rules and how he got to them, Roose gives examples of companies that remade themselves and are already prepared themselves and their employees for this future.
One thing that keeps being repeated is that with AI and automation, many products might look and feel the same. But services around the product such as interaction with customers and human problem-solving will be the differentiators.
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Roose gives an example of a company that invested in trained human operators for its helpdesk call center (most of the industry is moving to automated robo-answering machines with a hidden option for a human operator).
He argues the former company is better prepared for the AI future. Just as Daunt’s design of the bookstores encourages customer browsing and spending more time, expert staff can provide valued help.
It all comes down to the idea of a newsroom as a profit center. Amazon obsesses over customers, newsrooms should obsess over the product which is journalism. In the future, the best journalism will be the bedrock of any successful news operation. But without a great newsroom to produce quality journalism, you won’t have a good product.
Hi! I'm David Tvrdon, a tech & media journalist and podcaster with a marketing background (and degree). Every week I send out the FWIW by David Tvrdon newsletter on tech, media, audio and journalism.