BusinessWeek's Tom Lowry reported the news that I will be leaving BusinessWeek, my professional home for some 22 years. Steve Cohn reported the story for Media Industry News. Here's the memo I sent to my colleagues:
Friends & Colleagues:
After spending 22 years of my professional life at BusinessWeek, I’ve decided to move on when Bloomberg becomes its new owner next week.
I’ve had a wondrous journey here, from the day in 1985 when Steve Shepard hired me as management editor to the day Steve Adler invited me back in 2005. I came of age as a journalist and editor under Steve I and will forever be grateful to him for the chance to write big impact cover stories and take far too many book leaves. I’m especially thankful to Steve II for giving me two very big opportunities: To return to my professional home to help run the magazine as executive editor, and to later take charge of our digital operations as editor-in-chief of BusinessWeek.com.
The latter was an especially transformative job for me. I’ve become a passionate advocate of digital journalism. So it will come as little surprise that I will be planning to launch a new digital media company based near San Francisco to explore the future. I’m flattered and thankful that Bloomberg provided me an opportunity to stay with BusinessWeek, but my passion to chase this entrepreneurial venture feels like the right move at this stage in my career.
For me, BusinessWeek has been far more than a mere employer. It’s been a close personal friend. That’s largely true because of the highly talented people I’ve been able to work with and learn from over these 22 years. I thank every editor who made me look and read better than I ever was. I thank every colleague who helped to shape my ideas and thoughts. I thank every friend who lent me support and encouragement through both the good and the hard times.
I offer a special thanks to Zulma Chamorro, my assistant, who always tried to keep me on time but rarely succeeded. I’ve greatly appreciated her commitment and diligence to both me and the entire online team. I also want to single out the two managing editors I’ve worked closely with at the magazine and online: Ciro Scotti and Martin Keohan. Their devotion, intelligence and integrity will stay with me forever.
I wish Bloomberg great success with BusinessWeek. Norm Pearlstine and the rest of the Bloomberg team will bring lots of new ideas and new resources to BW that makes me excited about the brand’s future. I’ll be its biggest cheerleader from afar.
It has been a privilege and an honor to work with all of you. Let’s keep in touch.
Amid all the havoc and pain in our business, I'm going to make a bold prediction: Over the next three years, we're going to witness one of the biggest booms in media ever. It will occur not in print, of course, but in the online world. And it will largely be fueled by forced media entrepreneurs, laid off writers and editors, lower barriers to entry, and the opportunity for tens of thousands of well-trained journalists to create something of value that they can run and own.
That old line about freedom of press belonging only to those who own a press is just that--old. For years now, pretty much anyone who has access to a computer and the Internet owns a press. But there was still a missing ingredient: vast numbers of journalists with the courage and the skill to use the Net to do their own thing. That's much less true today because of the layoffs of tens of thousands of highly qualified writers and editors who have been thrown out on the street by their dying employers. Many of them will not be able to find jobs in the field; they'll have to invent their jobs and that will result in this new media boom.
This generation of skilled unemployed has a few other things going for itself.
1) First-mover advantage is no advantage at all. We've now seen a number of successful web models, from Drudge and the Huffington Post, to the rise of an ecosystem of news generators in many cities and regions around the country. Followers have significant competitive advantages over first movers because they can learn from their mistakes and they can take advantage of better and cheaper technology. Today there are many more open source (low-cost and easy-to-use) options for would-be entrepreneurs to exploit. There were dozens of search engines before Google, but it took a follower to master the search market. There also were dozens of MP3 players before the iPod. Now is the time to follow the early pioneers.
2) Labor is cheap and the monopolists are dying. As the traditional winners of our business continue to die, there will be lots of opportunities for new low-cost models run by smart, highly motivated people--and there will be many vacuums to fill online. As bad as the past three years have been in our business, the next three will be positively brutal. Take a look at this chart that illustrates the staggering decline of magazine publishing income over the past decade but also gives you a glimpse of the opportunity today.
3) Despite the proliferation of blogs and websites, we're only at the very beginning of a media revolution. Many of these new ventures in the coming media boom will fail. After all, the odds are always against the entrepreneur. But many of them will succeed and change the game.
There are three fundamental beliefs today that have also been used as "white lies" by many media executives who have failed to reckon with the vast changes that have roiled our business in recent years. These absolutes will free you into thinking very differently about the business.
1) Print advertising will never come back. There are just too many options for advertisers today and too much pressure on advertising rates. In the so-called good old days, BusinessWeek, for example, lived in a cozy competitive world with The Wall Street Journal, Forbes, and Fortune. Now it must more actively compete with Yahoo Finance, MSN Money, AOL Money, CNBC, Reuters, Huffington Post, Slate, and thousands of other business sites. Never mind Google, behavioral targeting, everywhere and anywhere. Just as significant, most advertisers are lessening their dependencies on the intermediary--the media--to reach their target audience by going directly to them. One of the best places for entrepreneurs to get advice and help is American Express' OPEN site. It's as good if not better than anything published by traditional media in this space. Bottom line: Advertisers have learned to live with no print or far less print and they are not coming back.
2) Online advertising will never offset those declines nor save print. There’s far too much competition online and far too much available inventory. In the past year, the competition and the excess inventory have put tremendous pressure on advertising rates. CPMs (the cost to reach 1,000 people) have plummeted just about everywhere. And the costs of an online ad are just a mere fraction of what they continue to be in print. We use to say we've traded analog dollars for digital dimes. Now it's more like digital nickels and it may soon be digital pennies. It takes a lot of them to make up a single dollar. And there's a hitch to scale online: Scale brings down CPMs. The larger you get, the lower your CPM is going to be. It's no wonder why there are no incumbent brands who have been able to solve this puzzle.
3) Users will not pay for content, unless they’re convinced it has immediate and tangible value. Very little journalism meets that standard today. News journalism, unfortunately, has largely become a commodity. Do we really need 57 versions of a story on Bernie Madoff pleading guilty? Of course not. It's why much of the conversation about pay walls is moot. It may be true that media brands have no choice but to get more money from their subscribers, but it's going to be extremely tough to get people to pay for what they now get free. The genie is so far out of that bottle it will be impossible for her to get back in. I like what LinkedIn's Reid Hoffman said recently about Rupert Murdoch's plans to put up a paywall: "I am sure that during the transition from horses to automobiles there were some people bemoaning the loss of horse transport."
Why are these absolutes important? Because if you believe in these three absolutes and you're in the media business, they can be used to liberate you. If not, each of them become little white lies that allow you to lead by incremental change. People convince themselves that print advertising will come back once the recession ends; that scale online will help them make up their lost revenue on the print side of the house; and that so many of their competitors will die that someday they'll get a fair price for their content. Forget it. These fundamental truths of our business tell us that nothing less than radical transformation will make the difference.
This year may go down one of the toughest ever to be a journalist. Newspaper buyouts and layoffs have cost roughly 13,500 newspaper jobs this year, after claiming 16,000 positions in 2008. More than 100 newspapers, from the Rocky Mountain News in Denver to the Seattle Post-Intelligencer, have collapsed and disappeared this year. Some 525 magazines shut down last year.
The Old Media devastation has been unprecedented, even fueling a macabre genre of New Media, blogs such as “Newspaper Death Watch”, “Paper Cuts,” and “Magazine Death Pool,” the latter illustrated with a grim reaper who asks “Who Will Be Next?” Sadly, the shutdowns and layoffs are only part of the story. Journalists everywhere are facing mandatory furloughs and salary cuts. Most newspapers, magazines and broadcast news organizations have frozen all hiring, too.
What have journalism schools done to adjust to the new realities of our business? Not much, I conclude in an essay that appears in the digital magazine Byline published by the New York Press Club. Here's my take on what journalism educators need to do to train students for a very different time. My basic argument: J-schools need to develop a curriculum of courses to prepare not merely journalists but entrepreneurs who will launch their own media enterprises. What do you think?
John A. Byrne is the chairman and CEO of C-Change Media Inc. Until recently, Byrne was editor-in-chief of BusinessWeek.com and executive editor of BusinessWeek. He holds the distinction of authoring a record 58 cover stories in BusinessWeek magazine and is also the author or co-author of eight business books, including two New York Times' bestsellers. Byrne had also been editor-in-chief of Fast Company magazine. He founded C-Change Media, a digital media company, to take advantage of the sea change that is roiling the traditional media business. C stands for content, curation and community, the three common attributes of each C-Change web venture.