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Innovation, social media may be way to new business model for industry, Coats says

April 29, 2011

Journalists need to be innovative and take advantage of the social media revolution to serve readers and to find a new business model to sustain the profession, says Rusty Coats, a media consultant and former newspaper executive.

Delivering the keynote address at the APME NewsTrain workshop in Madison, Wis., Coats told participants Friday, April 29, that the newspaper business model is broken and it can’t be fixed.

“It needs to be reinvented,” he said during his address entitled “The Big Picture.”

He said the Internet has outpaced newspapers as the number one source of local news. He said Internet ad revenue continues to grow while newspaper ad revenue has dropped 48 percent in four years.

The move to digital access of the news will only continue, he said. In 2012 more people will access the Internet via their smart phones than through a traditional computer line, he predicted.

Journalists will have to find new ways to connect with readers using social media sites, he said, referring to Facebook and Twitter and several other new sites.

Coats also detailed how news organizations can analyze social media comments on the news and newsmakers to project election outcomes, identify social issues and community stories.

One example he gave was how the San Francisco Bay area newspapers are using Facebook access for readers to comment on stories and the result has been a more civil discourse on comments because the commentators are identified.

News organizations also need to analyze their structure and determine where to put their resources to cover the news with fewer journalists, he said.

Discussing a study done while he was a vice president for Scripps Newspapers, Coats said researchers decided that Scripps needed to reorganize its newsrooms to be digital first with all journalists being trained in multimedia delivery of the news and with more time spent on local watchdog journalism.

He advised newsroom executives to continue to look for new ways to present the news and to learn how to be entrepreneurs in finding news Web sties that work.

He pointed out that the Corporation for Public Broadcasting has created Web sites that provide coverage on certain topics in certain regions rather than on general news of the geographic area.

He also discussed some of the successful entrepreneurial Web sites, such as the Texas Tribune that is dedicated to exceptional public policy issues and data; the Batavian community news website;, a successful Seattle neighborhood blog.

The Seattle Times, he said, has partnered with nearly 20 neighborhood websites to cover a series on homelessness in the greater Seattle area and shares advertising and revenue with the sites.

Coats predicts that the future news business model may be found through entrepreneurial experiments.

“That’s how I see it – a thousand flowers blooming. Sooner or later one is going to get it right.”


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