Warren Buffet's Berkshire Hathaway has been on a newspaper acquiring tear. It recently bought most of Media General's newspapers with the exception of The Tampa Tribune. Earlier in the year Buffet bought his hometown paper The Omaha -World Herald. This will give Buffet some 60 plus local papers to play with and he will definitely use his marketing genius to turn his new newsprint into gold. Why? First off, Buffet truly understands the brand equity of local daily and weekly newspapers.
"In towns and cities there is a strong sense of community, there is no more important institution than the local paper," said Buffet in a statement. "We may buy more." He not only understands their key strength but local newspapers biggest challenge which is how to persuade customers to pay for news content online. A significant challenge since most newspapers previously gave away their online information for free.
How might the imaginative and youthful thinking Mr. Buffet accomplish this? As Albert Einstein once said: "Don't expect the people who caused the problems to be able to fix them." Because Warren Buffet is not locked into old school thinking he can freely change the existing business model. By placing more online focus on news and information that has the most local market appeal i.e. local politics, social events such as weddings, births, deaths, meetings, local sports, local politics, etc. and not trying to compete with the national media in covering national and global news - local newspapers online content can give them low cost "must have" daily information that will have the most interest to local community residents. It's not brain surgery, it's just creating content differentiation and exclusivity. Why not a local "Best Bets" for retail? Or weekly winners and losers for local politicians based upon their actions or inactions. A local type Page 6 could also be easily created.
Clay Felker, the gifted Editor who launched New York Magazine created galleries of small photos featuring prominent New Yorkers at parties and events because he realized the local market appeal they would have. His New York Magazine created new categories of local interest ranging from what people earned to the best deli sandwiches. The same can be done today by these local newspapers. Ironically, the opportunity is not to produce less content but a great deal more. But, direct the new content to online and cut back on the costlier print product's frequency or number of pages.
One editorial team can produce the content for both the print and digital product. The print product could be used as a promotional vehicle to drive people to the papers web site. For example, on a weak advertising day for print the local paper might just be four pages that promote the papers content and offerings of online advertisers. Or there might just not be a printed product every day. And rather than rely upon an advertising supported business model, online content must be eventually charged for and at a rate that makes for a profitable enterprise.
Since many of the papers currently do not charge for online content the opportunity is to create more compelling service oriented content; and local news that keeps local politicians, school boards and others "honest". Local newspapers are really the guardians of a local community's values and needs. By making their web sites a daily must read - local newspapers can charge for content and become another monthly service that consumers rely upon similar to a cable channel or phone company. Cable companies were able to charge more as they offered more content. Phone companies can charge more for different services such as call waiting. A local newspapers web site can be able to charge more by creating more content options for readers. These content options can range from receiving your personalized daily horoscope, special daily coupon off deals for local retailers, restaurants, etc., to a daily match.com. The beauty of the Web is that more content does not entail the production and delivery charges of the print product.
Imagine Buffet having one centralized online creative team developing local market concepts that can be used by all his newspapers. Berkshire then could attract top engineers and content creators whose salaries could be amortized across their 60 plus papers. One sales team could sell both print and digital and where possible; regional sales teams could be utilized. A small corporate team could sell national advertisers. And a free classified could be tested online and then slowly charged for. A classified had been the greatest shopping centers for newspapers in the past. They just need to be recreated online and made attractive to test and try.
Because Warren Buffet will be open to new ideas and new thinking and not locked into an antiquated business model; there's no question that he will eventually turn the new newsprint he's acquired into a new media gold mine.
Steve's most recent book You Can't Fall Off The Floor - The Insiders' Guide to Re-Inventing Yourself and Your Career chronicles his 50 year career working for over 25 different companies with 189 lessons learned and insider tips from Gayle King, Cathie Black, Chuck Townsend and 28 others; Blacker is still going strong today as a partner in Frankfurt & Blacker Solutions, LLC. His web site is blacker-reinventions.com and e-mail address is email@example.com
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