This is a follow up to my previous post looking at the challenges most publishers face going digital.

Two weeks ago, Amazon launched a new larger version of the Kindle called the Kindle DX. It is essentially a functional equivalent of the existing Kindle 2, but with a larger 9.7″ diagonal screen to better accommodate highly formatted publications like newspapers, textbooks, and business PDF files. Here’s a quick video overview of the device that Amazon put together:

Given the financial challenges faced by many news organization today, some people have been calling the Kindle DX the last, best hope newspapers have for “going digital” and reducing the costs associated with physical print and distribution. Rupert Murdock even mentioned the interest Newscorp has in creating a Kindle-like device they could leverage as a delivery platform.

While I welcome their growing interest in digital readers, devices like the Kindle DX are hardly a panacea on their own for what ails the newspaper business. Traditional media organizations have a broad set of issues to address, and very little time left to act. If this industry really wants to embrace the digital future, they will need to come to the table with an open mind about what their business should look like. A few points of advice they should consider:

Denial is your biggest enemy:

As hard as it may be to accept, ink and pulp have no long term future role in the news business. Print newspapers are being kept alive by momentum, and by traditionalists that cling to a physical paper more from habit than anything else. Print based news distribution is dying off and will not recover. Also dying off are the traditional sources of revenue that came from the local monopoly physical distribution gave to newspapers. As tough as this may make things, stop looking for ways to turn back the clock. Remaining relevant will require a massive transformation of the way your business operates, and the products you turn out at the end. Making decisions that try to preserve the past will keep you from taking the tough, decisive actions you’ll need to survive into the future.

Stop confusing the future of journalism with the future of print based news:

The media is not the message. Unshackled from the constraints of physical publication, journalism has an unprecedented opportunity to flourish. The demand for quality content will continue to grow and there are more ways for journalists to connect with their readers and each other than at any time in history. Think creatively about the opportunities this opens up for transparency and collaboration. Editors can expose some of the debates that take place prior to publication along with the final articles.

Without the space or media constraints of a physical publication, it will be possible to include a wealth of background materials like original note and audio taped interviews that may be associated with each story published. This could create a unique opportunity for readers to dive behind the distilled perspective expressed in a story, a level of transparency unmatched by any news provider today. Taking this even further, this approach could provide a collaborative foundation that lets other journalists pick up from a published story to potentially explore it from other unique perspectives. Not only could this help you better fill the social watchdog role envisioned by the constitutional foundation of a free press, it may also present you with new revenue generation and cost sharing opportunities.

When it comes to production, start thinking nationally or even globally:

Having fully independent local news organizations serving local markets doesn’t make sense in a digital world. Centralize as much of the news production process as possible to eliminate duplication and reduce costs. Create the infrastructure to allow regional news to be collected through a network of individual contributors using a “paid-if-published” model. Maintain quality by using local, centralized and even outsourced writers and fact checkers to package it for publication. Focus any of your own local reporting resources on more complex or investigative stories that make sense to develop internally. Keep a local/regional editor and key writing talent on staff, but make the technology investment needed to tie all of these people and assets together into a highly efficient virtual newsroom. Done well, you’ll still be able to maintain an identifiable local voice while producing quality product with greatly reduced fixed cost overhead.

Advertising – hyper-local, personal, and interactive:

Advertising in the digital content space provides some unique and powerful capabilities. It allows you to identify a specific reader, and target them with ads that are more relevant to their interests and lifestyles. It is also possible to leverage the geo-location services available on many modern digital platforms to serve up ads tied very specifically to their physical location at the time content is accessed. When these two aspects of digital delivery are combined, the ads you serve up can become far more actionable – and potentially far more valuable to advertisers. With the right technical infrastructure in place, ads can even be delivered on a just-in-time basis, allowing local establishments like restaurants and theaters to offer discounts based on real-time availability. It is also possible to create ads that are more like interactive applications. Not only can this type of “app ad” provide some level of immediate value to consumers, it can also become a platform for advertisers to interact with them and potentially monetize their interest. The connected nature of digital ads, creatively leveraged, can open up completely new revenue opportunities for you. While the near term revenue generated from these new ad models probably won’t match what you see today from print advertising, I believe they have the potential over time to out deliver their paper bound counterparts.

Be Ubiquitous:

Outside of some high value and fairly unique assets, putting a firewall around your content won’t work. The information contained in anything that is published will ultimately make it’s way out to everyone with an interest in it. This is the social dimension that makes the web model so powerful. People will have so many free choices available to them on topics of broad interest that trying to charge for what you produce won’t be practical. It doesn’t matter that your publication may offer stories that are clearly superior to what is freely available. When consuming information, people will move down the path of least resistance, and that means “free” content will be looked at first. Only those people not satisfied by what they see for free will consider paying, and the value they will assign to it will only go to the marginal additional value your content adds. That isn’t much of a market or margin to base your business on. A better way forward is to make your content as frictionless to consume as possible. Make sure it works across all different types of devices. Go out of your way to easily integrate with all of the major social tools and platforms. Add copious meta-data around your content to make it easy for interested people to find it. Syndicate and share. Embrace being digital completely, and count on using advertising and other indirect models to monetize it.

I have no illusion that the advice I’m offering here will be easy for the print media industry to act on or implement. It demands a meaningful investment of already scarce resources, and clearly carries a fair amount of execution risk. On top of that, the industry as a whole will likely be much smaller once this digital transition plays out. However, there is no way to turn back to a pre-digital world, and the half-measures most print publications seem willing to take on the digital front will not be enough to pull them out of the death spiral they find themselves in.

It’s time for them to take decisive action.

The industry is rapidly approaching the point where the current business model will become completely dysfunctional. At some point soon, every news organization will need to reconstitute their remaining assets and capabilities into a business structure that will let them survive and thrive going forward. And those that are aggressive and make this transition early will have a wealth of new opportunities available to them. But to get there, the industry will need to stop thinking of technology as an enemy, and instead embrace it as a partner.

It will be the cornerstone of their future success…