A User-First Framework for Sustaining Local News - Harvard ...

Cost‐cutting in the digital age: Show your customers the door—your own
Several years of cutbacks have created the impression—and, sadly, often the
reality—that news organizations have already slashed expenses to the point of seriously
diminishing their journalism and under‐serving their users. Hopefully, even the
beginnings of a modest economic recovery will fuel some reinvestment in news
products in 2010. But a hard truth about sustaining local news reports for the foreseeable
future is that—even with profitable paid content, re‐imagined advertising, lucrative new
partnerships and some successful new ventures—newsrooms will have to cut in some
areas in order to invest in others. The key question will be how best to deploy the
resources available.
In assessing his company’s prospects for Wall Street analysts in December,
McClatchy Newspapers CEO Gary Pruitt pointed to a relatively obscure statistic in the
course of his presentation. 150 “The percentage of McClatchy employees in news,
advertising and digital has risen from 37 percent in 2000 to 47 percent this year, and will
go to 51 percent in 2010,” Poynter’s Rick Edmonds reported from the meeting.
That shift occurred as a result of outsourcing the printing of eight of the company’s
30 newspapers, and it means that a significantly higher share of McClatchy employees
are now working in areas tied to the company’s future as opposed to its past.
The shift reflects the kind of cost‐cutting urged by Penelope Muse Abernathy, who
holds the Knight chair in Digital Media Economics and Journalism at the School of
Journalism and Mass Communication at the University of North Carolina. In a paper
prepared for a recent conference at Yale, Abernathy and Richard Foster, senior faculty
fellow at Yale’s School of Management, urged “shedding legacy costs as quickly as
possible.” 151
Specifically, they urge making those cuts in ways aligned with the migration of news
organizations’ customers from analog to digital platforms. The problem, they point out,
is that publishers have directed so much of their limited funds into print “to prop up the
cash cow so it continues giving until they can figure out a way to ‘manage’ the digital
shift without dealing a fatal financial blow to the entire organization.”
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