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The Orange County Register. The Market Wins Again.

October 30, 2014

Disclaimer: The views I present in this post are mine and do not necessarily represent the views of my employer, as usual. Additionally, I have been a longtime subscriber, and am currently a digital subscriber, to the LA Times.

This is the first of a two-part series on the OC Register

This is the first of a two-part series on the OC Register

If I’ve learned anything in my career thus far, it’s that the market rules. It absolutely rules. Align your product, price, place and promotion to the market, and you at least have a shot at being successful.

But if you ignore market dynamics, you’ll lose. And the degree to which you’ll lose will depend on how much you don’t align with the market. Ignore the market big-time, and you’ll have a train wreck.

For the last two years in Southern California, we’ve had a front row seat to one of those train wrecks as we’ve watched the Orange County Register newspaper experiment with a new business model that seemed to altogether ignore the market, thus giving us a lesson to be learned for higher education.

The Orange County Register

In 2012, the then new publishers of the OC Register, Eric Spitz and Aaron Kushner, launched a new business model for the paper. It was a print-first approach that emphasized local coverage with a number of integrated newspapers and publications included in the Register newspaper package. Actually scratch that. It wasn’t just a print-first strategy the new publishers chose. It was essentially print-only.

The new publishers chose not to invest in the digital consumer experience. They didn’t reenvision the OC Register newspaper as a media company as so many other newspapers have done nationwide in an attempt to deal with the changing market. Instead, they reaffirmed that the OC Register was a newspaper, they touted the newspaper reading experience, and focused on building their newspaper subscriber base.

The publishers adopted a hard paywall for the OC Register website, and wondered publicly why newspapers would give away their content. And while other newspapers were trimming their staffs, the Register expanded their corps of reporters.

Spitz and Kushner made a splash nationwide with both admirers and critics agreeing that this was a fascinating experiment and perhaps a solution for the newspaper business.

But as I looked at it from the perspectives of a potential advertiser and subscriber, I was floored by their audacious approach to the market.

In an era of dramatically changing market forces, when thought leaders are describing to us in real-time how digital is significantly changing consumer behavior, Spitz and Kushner were pushing all of their chips to the center of the table and were betting on print. On print.

That’s right. The OC Register–a news content producer–was implementing an aggressive business model that was ignoring all the market dynamics of digital content and consumer behavior in today’s marketing environment that drive brand recognition and growth.

As an advertiser, would I be interested in only reaching OC Register subscribers who would be unable to share content? Maybe, if their subscriber base is the audience I want to reach. But if their subscribers are almost entirely seeing our ad in print rather than digital, how do I measure ROI? And if the Register is essentially acknowledging that their subscribers are largely late adopters to digital, how is that going to drive the needle measuring website traffic?

From the perspective of a technology empowered news consumer, their print-first strategy alienated me. I don’t consume news by picking up an ink-saturated newspaper. I want to be able to read my news on a well-optimized platform of my choosing and be able to share stories with family, friends, and colleagues.

Whether you call today’s marketing environment Content Marketing or refer to it as Paid, Owned and Earned Media, Spitz and Kushner were ignoring all of it.

Just this week, the NY Times ran an article (I found on Twitter) titled How Facebook is Changing the Way Its Users Consume Journalism. I highly recommend it and share it here (which I can do by the way because the NY Times employs a metered paywall). The article states:

Though other services, like Twitter and Google News, can also exert a large influence, Facebook is at the forefront of a fundamental change in how people consume journalism. Most readers now come to it not through the print editions of newspapers and magazines or their home pages online, but through social media and search engines driven by an algorithm, a mathematical formula that predicts what users might want to read.

In this new market for journalism that’s increasingly about digital and algorithms, how do you make a decision as a news content producer to adopt a print-first strategy with a hard paywall that keeps those stories from being shared by algorithms? By seeing yourself as a newspaper and not a news content provider, that’s how.

In essence, Spitz and Kushner created their own gated community of newspaper subscribers, a perfect match for the stereotypical housewives culture of Orange County, but entirely out of sync with the market. And based on the fact that the market wins pretty much every time, I believed Spitz and Kushner were doomed to fail.

Fast-forward to last week, or last month, or the last six months, and the bold and ill-advised experiment hasn’t worked. Waves of layoffs, the short-lived LA Register, past due payments for distributing their newspapers, and a shake-up in management, all confirm that the Register is in trouble. Shocking.

Sure, newspapers nationwide are struggling, and there are other filters through which view the failure of the new publishers to fix the OC Register. But if we learn anything from the OC Register, and the newspaper industry overall, it’s that the market rules.

The OC Register didn’t stand a chance with this new strategy. It’s one thing to ignore market dynamics. It’s quite another to go in the opposite direction. Like it or not, news content providers–A.K.A newspapers–that formerly distributed their content via newspapers are going to have to continue to explore how to adjust to the new ways consumers consume news content.

The Moral of the Story for Higher Ed

The OC Register and the newspaper industry overall provide an important lesson for higher education. Market forces are in the relatively early stages of disrupting higher education just as they have disrupted the newspaper industry.

And we’re faced with the same question that newspapers have had to address. What’s our core business? Is it traditional or even nontraditional higher education as we know it, or is it transforming lives through education regardless of the platform? We need to open our minds before old revenue streams dry up.

Now is not the time for higher education leaders to look boldly to the past for solutions. It’s not the time for retrenchment. It’s the time to reenvision higher education in order to address changing consumer behavior and changing market dynamics, not ignore them.

See also: Higher Education. A Fading Rite of Passage?

Marketing: It’s No Longer 2009.

Marketing to the Empowered Consumer

 

 

 

 

 

 

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2 Comments leave one →
  1. October 30, 2014 12:39 PM

    Hi Rick, Interesting article. I too have watched the not-so-slow demise of the OC Register. However, I do think they’ve done a good job with local coverage like community and prep sports, albeit, not good enough to turn a profit apparently. In your application to higher education, are you making a nod to market forces moving higher ed to on-line learning?

    • October 30, 2014 1:06 PM

      Thanks, Randy. Yes, but higher ed largely gets that online education must be a part of the mix at the grad-adult level. But we’ll see it emerge more at the traditional undergrad level too. And who knows what’s next? The world will look like a different place in ten years. Regarding the good local coverage of community and sports news by the OC Register, my next post will talk about our ad campaign with them.

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