Back in the mid-nineties, it was clear that Internet advertising for help wanted, cars, and real estate, the mainstay of newspaper classified revenues, would eventually migrate to the Web. It was only a matter of time. But newspaper publishers sat on their hands, more worried about protecting existing revenue streams than leading the effort to develop new ones.

Part of this obstinate and moribund refusal to accept the inevitable was the result of the organizational structures within the newspaper industry: A top-down, highly functional structure, with departments, like classified advertising, and circulation, that effectively did what they needed to do at the time, but couldn’t think creatively about the future, and rarely spoke to each other.

Magazine publishers have generally moved to the Web more readily than their newspaper counterparts, but still too slowly;and many are now facing the challenge of trying to grow their Web-based business while print revenues languish. They need fluid organizations that can turn on a dime, and focus on the customer rather than inter-departmental political squabbles. The obvious challenge: How best to structure the organization to keep the print product vibrant but really focus attention on the potential of Web initiatives.

The New Org Chart
The research outfit Outsell Inc. recently issued an excellent report titled "Creating the E-media Organization." You’ll have to buy it to get the details, but their conversations with key media CEOs confirm that the issue is top of mind. Outsell says there are four basic models companies have developed, which they call the "publisher’s pure play," "centralized," "hybrid/matrix" and "integrated." Each has its challenges, but each can work, says Outsell, depending on where you are in the cycle of your Internet investment.

No matter how you structure the operation today;I’d suggest you assume that the structure will change as products develop and the market responds;there are some key things you should be doing, among them:

  • Hire Web-savvy staff. Look outside the traditional print publishing realm to bring in people who understand the technology and are willing to take chances with it. If your editors, for example, don’t spend time reading blogs how will they understand their own readers?
  • Tell your folks to expect constant change. Roles are no longer static. Editors can’t ignore the Web or the underlying technology; they must embrace it.
  • Experiment aggressively. Launching a Web product is a lot less expensive than a print product. If you aren’t launching several a year, with more on the horizon, you’re going to end up like so many newspaper publishers.
  • Move people around. Departmental boundaries are not nearly as important as they once were. Changing reporting relationships and moving staff from one functional area to another can be disruptive in the short term, but of great value in the long term.
  • Explore different economic models. Web revenue will probably not fully replace print revenue for a very long time, if ever, so to maintain profitability, different cost and organizational structures will be essential. Don’t shy away from this fact. Experiment with it.
  • Stop doing things that don’t work. Don’t waste time on print initiatives that will take three years to reach profitability. You don’t have that long.
  • Invest in your infrastructure. The IT department is now a critical component of your success. Don’t "nickel and dime" technology investments. IT should be headed by a "can do" executive who lives on the Web. The former IT director at 101communications read more than 20 technology magazines every month, but none of them in print.

We are in an incredibly exciting and challenging time in the publishing industry. You can make it fun, exciting, even profitable if you look to the future and embrace innovation and new ways of doing things.

Jeffrey S. Klein is chairman of 1105 Media Inc.

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