Gruber on Newspapers

July 21st, 2009

John Gruber wrote Monday that for newspapers to survive, non-content creating divisions must be eliminated:

What works in today’s web landscape are lean and mean organizations with little or no management bureaucracy — operations where nearly every employee is working on producing actual content.

And it’s not really surprising that they’re [large newspapers] failing to evolve. The decision-makers — the executives sitting atop large non-editorial management bureaucracies — are exactly the people who need to go if newspapers are going to remain profitable.

Mark Bernstein responds, writing that:

Newspapers aren’t bloated bureaucracies because they have antiquated management. They’re heavily staffed because they are built for a different technology and a different distribution system. The old economy made them strong in some areas, and vulnerable in others. The new economics will change their structure. But it’s not simply a matter of antique management; it’s the result of that press in the basement and all those trucks out back.

Gruber replies:

But he’s talking about the newsrooms. The vast number of reporters and editors and support staff focusing on producing the actual content of the papers. And of course there are a lot of them, and the operation looks unnecessarily large compared to a web-only publication, because a newspaper is a hell of a thing to have to fill up with content 365 days a year.

Gruber misses Bernstein’s point; Bernstein is not talking about newsrooms. Bernstein basically agrees with Gruber that newspapers are much too large. Instead, Bernstein is criticizing his focus on management as the cause of their decline.

Bernstein argues that the newspapers’ basic problem is their 19th and 20th-century distribution systems were incredibly expensive, and necessary. Delivering papers first by horse and carriage, then by van, was the only way to get them where they needed to be. But by using these methods, they tied themselves down with amazingly-high fixed costs: buildings to house the presses, the presses themselves, and ultimately, the union contracts for the people who did the printing and delivering. They still shoulder this burden.

Poor management decisions, or too bloated a management class, did not pull newspapers into this mess; economic realities did. Their model made sense in the 19th and 20th centuries, but do not now.

Let’s use the New York Times as an example. Some of their union contracts for support of production and distribution are not negotiable until 2011, and printing and distribution costs are estimated to make up as much as 50 percent of their operating costs (the source for both claims is here). Those union contracts and costs are vestiges of last century’s economic requirements, and are difficult to shed.

Eliminating scores of employees is unpopular at any time, but especially during this recession, and the unions make it monumentally difficult. But just as Gruber argues, and Bernstein concurs, eliminating them is necessary for newspapers to survive.

So it is not so much that the “people who need to go” are the ones in charge, but that for newspapers, the past still haunts the present. Gruber’s overall point that newspapers need to radically reduce their size is spot on, but his focus on management, I think, is not.

Reducing cost, though, is the easy part. The hard part is finding a way to generate enough revenue to still thrive.