Overconnected

In “Overconnectivity and Surprises,” William Davidow explains how the newspaper industry fell apart due to overconnectivity. His perspective was enlightening. He points to a paper by mathematician Eugene Wigner that states that overconnected environments are unstable and subject to rapid change and also accidents. Newspapers are therefore an example of this. Davidow says the newspaper industry went from a connected state to an overconnected one, bypassing a highly connected state altogether. Because newspapers thrived for so long on the same business model, they were not equipped to handle the rapid changes the Internet brought to the industry, most notably the replacement of classified advertising.

Davidow explains: “The Internet changed both the newspapers and the means of delivery. News that once appeared on paper was now delivered over the Internet. Almost overnight, newspapers went from thriving in an interconnected environment to suffering in an overconnected one. People stopped reading print newspapers, advertisers disappeared, and circulation plummeted. Unable to cope, some newspapers began abandoning their print product and switched to Web-only news. Others struggled to adopt new business models. The current chaos in the industry is a sign of overconnection.”

He also talks about positive and negative feedback, but from the perspective of an engineer. The term “positive” refers to how change reinforces and accelerates change, whether the outcome is desirable or not. Negative feedback means stability and keeping environments in balance. He likens it to a home thermostat: “positive feedback would have the thermostat’s signal to the furnace be ‘Great heat; let’s have some more,’ repeating it until the house became unbearably hot,” while negative feedback tells the furnace that it’s too hot or cold and the furnace adjusts accordingly.

The positive feedback the Internet and interconnected states related to newspapers received left the newspapers reeling. And, they still are.

Warren Buffett recently acquired the Omaha World-Herald and several other newspapers. While I’ve always thought of the World-Herald as a paper that “survived” the industry chaos – and will continue to survive – an articlein Bloomberg from December sheds light on the struggle that it and Buffett faces.

Terry Kroeger, the newly installed chief of Buffett’s newspaper empire, says their goal is to reintroduce newspapers to what they do best: delivering urgent, local information that readers can’t get elsewhere – and coaxing people into paying for it. “We’ve got to evolve with what people are looking for, and I think our industry has done kind of a crappy job with that,” Kroeger said.

What I found interesting in this article is that Kroeger started working at the World-Herald 27 years ago. If even Kroeger himself is admitting that the industry has responded poorly to the changes, and he’s been working there since I was 5 years old, my initial reaction is – wouldn’t Buffett want to put someone else in charge? Someone who was not one of the many who didn’t make the necessary adjustments along the way? Someone with a fresh perspective or new ideas? 

The article also discusses the issue of staying objective. Health-care articles from the World-Herald and other Berkshire-owned Nebraska newspapers go onto a website sponsored by Blue Cross and Blue Shield of Nebraska, which has advertising in addition to the sponsorship. Kroeger said the arrangement with Blue Cross doesn’t affect the content. Buffett’s ownership also raises the question of how that influences news coverage. But, Mike Reilly, the World-Herald’s executive editor, says it doesn’t. The articles states that for years, the paper has run a weekly column on the billionaire called “Warren Watch,” something that continues under Buffett’s ownership. “There hasn’t been any change in how I run the newsroom,” Reilly said. “We used to cover the heck out of him and we still cover the heck out of him.”

Bloomberg says that the World-Herald is profitable and so is Buffett’s whole newspaper division overall. I do hope they survive but I do wonder how these business decisions by Buffett’s group will affect the paper.

I have always been impressed with the World-Herald though, especially with its “Omaha.com” web address. You want people looking for information on the city to recognize that the newspaper’s site is the best site. I remember when I interned at the St. Petersburg Times in Florida in 2002, their Tampa bureau office building just said “The Times” on the outside so that people moving to Tampa would assume that the Times was the local paper instead of the Tampa Tribune. On my first day of work at the Times, I was told that the goal every day was to put the Tribune out of business. The Times also put their name on the arena in Tampa that year, calling it the St. Pete Times Forum. In the years since I left, the paper is now called the Tampa Bay Times, as they continue to infiltrate and grow in the area.