Virtue is not a business model

Jeff Jarvis does a good rant about business models and the news business – excerpts below. Most of these lessons do apply to libraries too. Just read it about the news business and then re-read it about libraries inserting our portfolio of services. It’s a good wake up call.

Hard economic lessons for news

RULES FOR BUSINESS MODELS

* Tradition is not a business model. The past is no longer a reliable guide to future success.
* “Should” is not a business model. You can say that people “should” pay for your product but they will only if they find value in it.
* “I want to” is not a business model. No one gives a damn what you *want* to do.
* Virtue is not a business model. Just because you do good does not mean you deserve to be paid for it.
* Business models are not made of entitlements and emotions. They are made of hard economics. Money has no heart.
* Begging is not a business model.
* There is no free lunch. Government money comes with strings.
* No one cares what you spent. Arguing that news costs a lot is irrelevant to the market.
* The only thing that matters to the market is value. What is your service worth to the public?
* Value is determined by need. What problem do you solve?
* Some readers are not worth saving.
* Disruption is the law of the jungle and the internet.
* Disrupt thyself. So find your weak underbelly before someone else discovers it. Or find someone else’s.
* “The newspaper model is broken and can’t be fixed.” Says John Paton.
* The bottom line matters more than the top line. Plan for profitability over revenue, sustainability over size.

REALITY CHECKS FOR NEWSPAPERS

* Circulation will continue to decline. There can be no doubt.
* Cutting costs will reduce product quality and value, which will further reduce circulation. A vicious, unstoppable cycle.
* Falling circulation will continue to reduce ad revenue.
* Low-cost competitors and abundance will continue to reduce the price of advertising.
* Local retail will continue to consolidate, further reducing ad revenue. Blame Amazon.
* Classified categories—real estate, auto, jobs, merchandise—will continue to become more self-sufficient.
* There’s a cliff coming: the end of a critical-mass of circulation needed to maintain inserts.
* Once fixed costs are sliced to the bone, they will rise again. Cutting alone does not a business strategy make.

DIGITAL RULES

* Scaling local sales is the key challenge.
* There will always be new competitors. For content, attention, advertising, and advertising sales.
* You no longer control the market. You are a member of an ecosystem. Play well with others.
* Abundance will drive down prices in digital even more than in print.
* The question about pay walls is whether they are the *best* way to make the *most* money.

OPPORTUNITIES

* Scaling local sales is the key opportunity.
* There is huge growth potential in increasing engagement.
* There are still efficiences to be found in infrastructure.
* Journalists should do only that which adds maximum value.
* There is growth to be found in networks.
* There are efficiencies to be found in collaboration.
* There are other revenue streams worth exploring.
* We have not begun to explore new definitions of news.”

Read the whole post for more.

Stephen