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Meet One of the Reader's New Bosses

What the American Press Institute thinks about the future of newspapers has suddenly become very relevant to the Reader.



Same building, same office and desk, same bosses and colleagues. But off somewhere in the sweet abstract yonder, the Reader has new owners who intend to make big decisions. What's ahead?

I've just skimmed a couple of long reports from the American Press Institute looking for clues: "Newspaper Next: Blueprint for Transformation," released in 2006, and "Newspaper Next 2.0: Making the Leap Beyond 'Newspaper Companies,'" published in early 2008. Newspaper Next is the industry-funded API's response to a time of crisis; it's a research project launched in 2005 because the newspaper industry found itself at "a strategic inflection point—a period of disruptive changes that threaten its current way of doing business with no clear future path."

Four years later, the changes are no less disruptive and the path forward is no clearer.

The Newspaper Next reports were just touted to me by the API's director of "targeted solutions," Elaine Clisham, whom the institute's Web site describes as a "speaker and evangelist for Newspaper Next." Clisham disarmingly warned me they were "very Harvard and academic and boring"—the Harvard part being a reference to Clayton Christensen, a professor at that university's business school whose consulting firm was hired by the API to do the research. But she also said they were full of "good stuff on how newspapers got to be where they are and what to do about it."

My new credo is good stuff to Clisham is important stuff to me. Clisham is now on loan from the API to work full-time for Creative Loafing Inc., the company that owns this newspaper.

Creative Loafing owns five other alternative weeklies too, and after acquiring the company in a bankruptcy court auction August 25, Atalaya Capital Management of New York owns Creative Loafing. "The company that exists now is not the company that existed 72 hours ago," Clisham told me three days after the auction. "Atalaya is a strong company with a strong balance sheet that's willing to invest judiciously in its resources to strengthen each paper in its market. Each paper has a very different perception in its market than any of the others. What will make us successful in Chicago is very different than what will make Tampa successful in Tampa.

"My job," she told me, "is to make sure whatever money is out there to get, we're in a position to be able to get it."

The Newspaper Next reports have a lot to say about something Christensen calls "disruptive innovation." That's the new product that insinuates itself into a crevice of the market the big dogs hardly deign to acknowledge, then relentlessly expands. One example offered by "Blueprint for Transformation" is the cheap Japanese cars that drifted into the low end of the American market, then began emphasizing quality and eventually ate the Big Three's lunch. Those early Japanese cars weren't perfect. But they were—a key Christensen concept—"good enough."

"Sometimes 'good enough' can be great," says "Blueprint for Transformation." "The essence of disruption is about making tradeoffs. . . . Free newspapers are a good example. The Boston Metro"—a free commuter daily—"cannot compete with the depth and breadth of the Boston Globe. When a reader has a solid chunk of time and wants to dig into the day's events, the Metro is an inferior product. But when that same customer wants to kill 15 minutes on a train, and the only alternative is boredom, the Metro is a near-perfect solution."

But this report is wrong about the alternatives. Another alternative commuters had to the Metro was the Globe, just as in Chicago another alternative to RedEye was the Sun-Times.

"Newspaper companies show strong perfectionist tendencies," the 2006 report continues, "but there are important reasons to fight this urge. First, it can result in products that are overly complicated or expensive. . . . Second, perfection is costly to achieve. Because so many initial product strategies are wrong, the worst thing to do is spend a lot of money early. The heavy investment makes it difficult to adapt when you learn what you need to do instead."

Then there's this sneaky advice: "Create a business model that succeeds without a revenue stream that is vital to incumbents. By not charging late fees, Netflix made its business seem less structurally attractive to Blockbuster, whose business model historically relied on late fees."

I wonder what, if anything, this report tells me about the future of the Reader; however, it's a virtual blueprint of the paper's beginnings. The Reader was an archetypal disruptive innovation: It began in 1971 as an eight-page rag slapped together in someone's apartment and stacked on the floors of shops in Hyde Park, Lincoln Park, and Lakeview. The first advertisers peddled waterbeds, used books, and cheap prints and furniture—places off the dailies' radar. The missing revenue stream was circulation: why would the Tribune or Sun-Times think for a second of competing with a so-called newspaper that gave itself away?

And decades later, why would the Tribune or Sun-Times—or Reader—get worked up about the infant Craigslist, which had no discernible revenue stream at all when Craig Newmark started it in San Francisco in 1995?

As for perfection being the enemy of the good, there's a catchphrase that's bounced around the Reader for decades, usually on deadline: "Good enough for a free paper." But it was ironic: The values that early on gripped this paper were perfectionist. Every muckraking article would be edited with a fine-tooth comb and lawyered to a fare-thee-well. Every listing would be triple-checked. Nothing would compromise these standards but attrition: Creative Loafing bought the paper in 2007 and the revised editorial budget cost us writers, editors, and proofreaders.

Creative Loafing's new interim CEO is Richard W. Gilbert, a former president of the Des Moines Register and, from 1986 to 1993, of suburban Chicago's Pioneer Press chain. Gilbert's 69, reason enough for him not to want his new job for long, but while he has it he has it full-time, and he's already begun visiting the six papers. One point he's making is that he has no "silver bullets." Or, as he elaborated to me, "Good journalism is about telling good stories, telling them well and factually, and it takes resources to do that. And in recent years, not only in this company but in other companies, those resources have really been under assault. Anybody who comes to you and says, 'Hey, I got the answer to this. I got it all figured out'—I haven't run across this person yet."

And he tells the staffs he knows everyone fears their jobs and careers are in jeopardy. As for jobs, Gilbert says Creative Loafing's focus will be on creating them, not eliminating them—"there's been enough of that already." But as for careers, who the hell knows? "Quite candidly, none of us know the answer to that," he says. "It's an extraordinary time."

What does the Reader mean to you? I asked Gilbert. He said his feelings about this paper go back to the days when he was competing against it in Evanston. "I always thought it was a force, and a strong competitor, and I liked reading it. It's a great alternative newspaper, or was, and I'm sure everybody associated with it wants it to continue to be."

Gilbert's expected at the Reader Thursday, to meet the staff and kick the tires, along with Clisham and James O'Shea, the former managing editor of the Tribune and editor of the Los Angeles Times, who's joining the new Creative Loafing board. O'Shea, who stopped by the office on Monday, will have the responsibility of overseeing the editorial future of the six properties. "He's forgotten more than I'll ever know about content," Clisham told me.

Gilbert and Clisham are the only two new members of the Creative Loafing team who described their assignments to me as full-time. O'Shea has other things going on in his life, in particular the book he's writing about the $8 billion Tribune–Times Mirror merger of 2000 and its disastrous consequences. But Clisham told me, "There certainly seems to be a great deal of interest in having Jim be hands-on, at least at the beginning."

Because in a perfect world the editorial staff of the Reader would be given more money to work with and left alone by corporate overseers, I asked O'Shea what "hands-on" means to him. In time, he said, it will mean telling Gilbert if he thinks the editorial direction the Reader (as well as the other papers, considered individually) wants to go in is the right direction, and if he does, supporting it. But for now, it means meeting and listening. "That wasn't being done," he told me after his first meeting with the editorial staff. "It didn't take a genius to sit in that room today and figure out a lot of people felt that way. That vibe came to me right away. I have to say," he went on, shifting the subject, "to go from 53 people down to 17—that's a huge hit."

Atalaya is out $30 million and wants its money back. It hasn't hired O'Shea and the others to be passive; their job is to see to it that money is invested in the papers in ways that will make them more attractive to the next owners.

"I can tell you this right now," says Gilbert. "I know of no plans to sell these papers now. I don't think anybody is standing in line to buy them." Or any other newspaper, for that matter. But Atalaya hasn't taken on these papers to keep them forever, and it will pull off a very neat trick if it manages to turn them over at a profit in what the Newspaper Next report "Making the Leap," calls "today's white water media environment."

A few pages later the same report warns that what "looks like a perfect storm for newspapers" isn't, because "storms pass, and this one probably won't." It tells newspaper companies to forget they're newspaper companies because they need to become "a new kind of local information and connection utility" that seizes the "big new opportunity" of the Internet to make themselves "everyone's first choice to 'help me know or do whatever it takes to live here.'"

Ben Eason, the CEO of the old Creative Loafing, never showed much interest in the Reader's actual editorial content, either in print or online. But Newspaper Next doesn't give the editorial product much thought either, leaving me to wonder—can the skeptical ethos of the Reader survive the ingratiating values of an alt utility (to coin a phrase) whose mission is to become all things to all people?

Never mind that we're watching mainstream dailies flounder as they do their best to be all things to all people—would Reader readers even want something capable of being "everyone's first choice" for everything? The Reader serves, and even helps define, a social and cultural niche, and I'm not sure what advice Newspaper Next has for niche media.

I asked Clisham. "It's probably too early in the game for me to formulate an intelligent answer to that," she replied—she needed to study our demographics. "I'll say this," she went on. "My perception is that the Reader's success to this point has been in the kind of long-form serious, intelligent journalism and writing it's been known for for a while. The question is how do we—it's too simplistic to say, 'Where's the market for this?' But how do we turn that into products that somehow can get paid for? That's the challenge."

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