Andreessen speaks

Imagine newspapers have never been invented. Here’s the synopsis of a business plan for your consideration:
(a) head for Canada,
(b) cut down trees,
(c) feed said trees into one end of gigantic machine,
(d) take pulp paper from other end of machine,
(e) truck said paper to place of publication,
(f) feed paper into one end of another gigantic machine, which prints words and pictures on it,
(g) load printed paper into more trucks,
(h) deliver newspapers to front porches (behind screen door!), driveways and plastic tubes on metal posts beside roads in every godforsaken nook and cranny near said place of publication.

Likelihood of angel funding? Not too high. Likelihood that enterprises actually engaged in this crazy business today figure out that continuing this routine much longer is folly? About the same, apparently.

Marc Andreessen, well-known entrepreneur of the digital world, suggests in a Portfolio interview, responding to the question, “If you were running the New York Times, what would you do?”:

Shut off the print edition right now. You’ve got to play offense. You’ve got to do what Intel did in ’85 when it was getting killed by the Japanese in memory chips, which was its dominant business. And it famously killed the business—shut it off and focused on its much smaller business, microprocessors, because that was going to be the market of the future. And the minute Intel got out of playing defense and into playing offense, its future was secure. The newspaper companies have to do exactly the same thing.

The financial markets have discounted forward to the terminal conclusion for newspapers, which is basically bankruptcy. So at this point, if you’re one of these major newspapers and you shut off the printing press, your stock price would probably go up, despite the fact that you would lose 90 percent of your revenue. Then you play offense. And guess what? You’re an internet company.

Now, realistically, he would not shut the printed Times down overnight. The important point here is that newspapers are not playing offense (although the Times comes pretty close), and they’re not internet companies.

To be an internet business, a digital business, the a newspaper would have to decide, irrevocably, that it will now be focused totally on publishing online content and creating online communities, 24/7. No U.S. newspaper organization, including the Times, has truly done this—they continue to be organized around that evening deadline for the print product, and everything else is secondary. And their reporters and salespeople continue to carry business cards with the prominent name and logo of the printed paper, not that of their web site.

Importantly, getting out of the daily distribution of “ink on dead trees” does not preclude sweeping some of that digital content into print from time to time. The Christian Science Monitor will stop its daily paper, but will maintain a weekly magazine. Politico publishes a weekly newspaper circulated on Capitol Hill. Wisconsin’s Capital Times eliminated its daily edition, but still publishes twice-weekly niche tabloids. The Onion is driven by its web business, but has a print edition with a circulation of 690,000.

Andreessen’s solution is radical, and he probably knows it’s not going to happen, not right now. But the Times and all other daily newspapers could, and should, consider the radical-enough solution of going digital by dropping everything except a profitable, ad- and feature-laden Sunday package (and probably switching that to Saturday publication). Cutting out six mostly break-even distribution days a week would be a lot smarter than cutting out 40 percent of their news staffs. (And, as Mark Potts suggests, and I agree, “Newspapers haven’t even scratched the surface on potential online advertising revenue, and that’s partly because they’re still focused on print.”)