photo by Gil C / Shutterstock.com
We start with three fundamentals. It is bad for Colorado democracy to have no paper of record for statewide issues. People are unwilling to buy the Denver Post product. The product problem is a decade old one that management has failed to address.
My business is turnarounds and I have worked on a few media related turnarounds. The Post and its employees are exhibiting all the classic signs of the swirl above the drain. First, leadership does not appear to have explained to employees that customers are unwilling to buy the Post product.
Exhibit 1 – A reporter after the recent layoffs argued with me on Twitter there was nothing wrong with the product. The public did appreciate it. It was just the greed of a hedge fund.
In this case the reporter said this “hedge fund who does not appreciate owning a newspaper is more than just profits”. Uh, duh. It is a hedge fund.
A hedge fund is unregulated money invested purely for profit under very aggressive money managers. They usually and in this case for certain are the last possible financing source. Said another way, the Post is in such bad shape the only people willing to invest are hedge funds who without mercy expect high returns.
Solution: Every employee and member of management has to acknowledge that the problem is the product – your customers will not pay for it. If you do not hit your numbers, the hedge fund will continue cutting.
If you look at the Post’s performance from a reader’s perspective, the last decade has been the history of late adoption and poor execution. The Post tablet and phone applications are hard to use, slow, and poorly organized. Customers in the new world will not tolerate this level of performance. Much of the coverage is reprints of national papers, the AP, Reuters, and other services many of which are instantly available on alternative high functioning apps.
And because facing the truth is essential – the quality of the writing and reporting has suffered from the loss of much of the most senior reporting talent.
The printing industry went through the same disruption over a decade ago. Ironically, printing employees would have substituted “newspapers” and “retailers” as villians for a “hedge fund”. Countless times I heard both papers and retailers pounding on printing sales people about volume, price, and the failure to innovate. They could get it faster, cheaper, better on the Web. Irony.
The printers that survived did several things. First, the strong ones bought the weak ones, cannibalized those sales, and got more efficient through automation and layoffs. Second, they accepted that there was no return to the past. New business models around logistics and even health insurance were explored.
The future was not in begging customers to support the product for charity and constitutional reasons. It was not explaining to the customers why they were wrong not to buy the paper. It was an immediate, disruptive adaptation, and acceptance of change to the underlying business model.
The Post needs to begin by asking it customers, “What would you pay for?” From what the Post has editorialized and the online commentary from its reporters it is apparent they simply do not know the answer. While that sort of basic ignorance can be shocking, it is typical in a turnaround.
My suspicion is that Post readers would pay for more local coverage and coverage of the West. If prior management had not wasted a decade and there was a reasonable balance sheet, a deal to buy up the best papers in the Rocky Mountain States (consolidation/efficiency) coupled with coverage focused on West and local issues in a single paper could revolutionize press coverage (innovation).
Even if that is the wrong answer, it is the level of innovation required.
The Denver Post needs bold change based on the problem. The problem is the product. You cannot fix the problem when you deny it.