Local Media Companies Need to Decentralize to Survive

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CentralizationCentralization is an Industrial Age concept that belongs on the garbage heap of 21st Century digital business ideas.

In some industries, of course, there are certainly still benefits for centralizing and streamlining one’s operations. But as applied to information technology and media, centralization is an error that needs correction. In a networked world, the real business opportunities are all local — not in bundling everything together to create scale and accumulate digital pennies.

This week, the experimental and, by all appearances, successful hyperlocal site AnnArbor.com is shutting down to merge with its parent company’s all-Michigan site, MLive.com. This is such a dreadful mistake that I don’t even know where to begin. AnnArbor.com has been owned by MLive since February of 2012, and management cited duplication of services — standard industrial age thinking — as a reason to merge.

“Integrating Ann Arbor with its other media properties across the state enables MLive Media Group to leverage our unified strengths, ultimately offering readers a better news experience, both online and in print,” said Dan Gaydou, president of MLive Media Group.

Bullshit, Dan. It’s about expense reduction and centralization of resources. As one of your commenters noted of the above, “If there was EVER a quote that might have come from the incompetent marketing weasels on ‘Dilbert’, this is one……”

The sites operate separate content management and commenting platforms, creating parallel workflows, company officials said.

While the change reduces duplication, it won’t alter the Ann Arbor editorial focus on local news, Gaydou said.

“AnnArbor.com created a dialogue with readers, and helped us learn a lot about the news that matters most to our community,” he said. “Most importantly, our Ann Arbor experience affirmed that local news is the foundation of our organization and all of MLive Media Group benefits from this insight.”

Readers of AnnArbor.com disagreed with Gaydou in the comments, and with no small amount of anger either.

“…I am out. I cannot stand MLive. Everything about mlive is awful….”

“What a shame. I absolutely loved AnnArbor.com. Michigan and Ann Arbor are just too different, that’s like if there was a website called Brooklyn.com and it was being absorbed by NewYorkTimes.com, it’s just not the same.”

“Paula and Team – You should be proud of the number of comments here indicating that annarbor.com has become a fixture in the community that will be missed by many (not all) of its readers. That’s quite an achievement for four years.”

“I knew Ann Arbor News. I read Ann Arbor News. Ann Arbor News was a friend of mine. MLive, you’re no Ann Arbor News.”

In other cases such as this, or when an entire company decides to centralize its digital operations, a lot of nice things are said and promises made to the community that there will be no loss of coverage whatsoever, but, while doubtless well-intended, it usually doesn’t come out that way.

And then there’s sales. Centralizing sales teams is the easy way out, and that’s precisely what makes the idea so dangerous for local media organizations. It removes the responsibility of property management from the managers and transfers that authority to a central sales team that functions, essentially, as a third-party ad network. It is, of course, much worse, for this third-party ad network is owned by the company, so everything exists to benefit the company’s network. The “local” is stripped away and revenue decisions are made from a distance. It allows sales management to present a much bigger bundle for the commoditized processes of banner advertising, whether targeted or not, and that seems to be the core motivation for centralization.

The idea that “everybody else is doing it” brings into play the paradox of industry reinvention, which makes about as much sense as the old parental bromide, “If everybody else jumped off a cliff would you do that, too?” Everybody else is doing it, because online advertising has been forced to adapt a tired model of mass media advertising, and because it can be managed. Managers need processes to manage, and the centralized network has various manageable processes. This makes everybody feel like they’re doing something, but the reality is they’re in a form of stasis, while the battle is taking place on the street.

Local media companies still have powerful brands in their communities — brands that can open doors for other business opportunities. Ten years ago, I wrote that a new use, for example, of a broadcast signal was to promote local digital business development for the company that owned it. Instead, we’ve opted to use our brands to open the same doors we’ve already served, and in the same fashion. We falsely believe we’re on a level that rides above the street, a defensive arrogance born of the sense that we’ve been here a long time and have earned that position. Unfortunately, it’s really born of a sense that we are somehow less than — or less able or qualified or knowledgeable than — those who engage in the street fight, and that’s a tough position for sales.

Wait a minute, Terry, you want ME to compete with Google? Of course— what choice do you have? The digital space you’re selling in is not what your centralized digital unit needs it to be — it’s a whole new world.

TerryNaplesTerry Heaton is President of Reinvent21, a consulting company specializing in business reinvention for the 21st Century. He’s an internationally-recognized creative expert on all things web-related, especially as they relate to local media.