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I Like Sam Zell's Style

I think I told this story once before in this blog, but I'll tell it again. When Topix first started to talk with Knight Ridder way back when, we had a meeting with lots of the KR higher ups. At some point in this meeting, we asked one of the KR exec's something to the effect of "what markets are you not in right now that you want to be?" The exec's response: None.

Judging from the look of horror in our faces (can you imagine being in a business like online news and NOT look to grow outside your current geographic markets???), the executive felt compelled to explain to us that that's not how the newspaper business works. They have their markets, their competitors have theirs, and everyone lives happily ever after. Oh.

What the exec who said that didn't realize was that a strategy like that works well until something disruptive (like, i don't know, say......THE INTERNET?!) comes along. Then things must change.

With the internet/ blogging/ search engine revolution, media distribution became cheap and easy. Newspapers used to having a monopoly on these things were suddenly forced to (horrors!) compete. Different places to spend ad money jumped up, large audience footprints we established, more interesting ad products developed and, accordingly, newspaper revenue felt the pain. Previous luxuries of the business, like journalism, became re-characterized as cost centers, bait for readers if you will. And just like the old saying goes, if you're not catching fish, it's time to cut bait. And so has been the history of the newspaper for the past couple of years.

Anyway, fast forward a few years, KR no longer exists, NY Times stock sinks like a stone, Tribune gets sold off and the tombstone for the newspaper industry starts being chiseled. And that's that, right?

Hmmmm. Maybe not. Maybe there is a hero in this story. When Tribune is sold its buyer is actually someone NOT in the media industry. Someone who is untainted by the political/ emotional baggage of the past. A fresh set of eyes and a strong personality. Someone who understands the need to actually forget about past glories and question everything and anything. And not to be nice about it. That last part is key, by the way.

Sam Zell seems to be that guy. Turning around a sinking ship is hard business. There are lots of tough decisions ahead and more enemies than friends to be made along they way. I like what he's doing though. He's ruffling feathers. Making people uncomfortable. From what I've seen he's trying to message out that newspaper employees should stop worrying about nonsense like Pulitzers and start worrying about things like monetization, advertisers, CPM's, audience packages, etc. High mindedness is a luxury of successful businesses, not failing ones. This guy may just be the exact kick in the pants that the industry needs.

Now with that, ruffling feathers is only half the job. There still needs to be strategic decisions made around product, distribution, monetization, etc. I don't know where he'll come out on those. But shaking off the ghosts of the past and looking at the business with fresh eyes is certainly a good start.

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This page contains a single entry from the blog posted on February 20, 2008 1:43 PM.

The previous post in this blog was Restoration Hardware = Customer Loyalty.

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