The Scoop Might Have Lost Value, but Advertisers Still Need the News

Video Interview With Newsweek Chairman Rick Smith

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Rick Smith, who stepped down last year as Newsweek CEO and editor in chief, is upbeat about most things, but he's not so optimistic about the value of good reporting in today's media universe.
In this nine-minute video inteview, Newsweek chairman Rick Smith decries the decline in the value of reporting in the digital age.

"There used to be a moment when an exclusive nugget of information was a valuable item. Now the exclusive has a half life of about seven minutes, and then it's all opinion about it. If you look at cable TV news, or certainly the internet, there's this gusher of opinion," so real reporting becomes devalued, he told me during an video interview.

But, he added, "talk is cheap. Opinions are cheap. Reporting is extraordinarily expensive." He said the entire press corps in Iraq probably numbers 100 people, "maybe less. That isn't helping." There are fewer in Afghanistan. "All news organizations are under cost pressures these days, and too often it's the reporting that gets sacrificed."

I asked Rick if advertisers still care about this quaint approach to journalism -- or whether all they care about are readers' eyeballs.

"Boxcar eyeball numbers are all that some advertisers are looking for. Other advertisers are looking for an environment that includes thoughtful readers, readers who are willing to take in information and make judgments on the basis of that information and not just to be entertained. And for certain kinds of products, for certain kinds of services, for establishing a strong corporate image, there's a real advantage in being in an editorially credible environment, where readers are engaged ... and therefore more likely to take home the advertising message."

Rick asserted that for advertisers "this is a wonderful age, because there are so many choices out there. Compared to the old days, when there were three TV stations and three national news magazines and a couple of weekend talk shows, the options for placing advertising have changed. But collecting in one place each week several million thoughtful, engaged readers, I continue to believe, is a very strong platform for an advertiser."

See, I told you he was an upbeat guy.

I couldn't even get him to show a little pessimism about the perils of differentiating his magazine from others and his website from other general-news sites. "I would submit that going back to the origins of modern business, how to differentiate yourself from your competitors has been one of the most important business challenges, but that's a constant of business. And you better get it right."

Rick says the Newsweek website attracts as much traffic as Time and U.S. News combined. "I like the trend of both our traffic and the direction of our web offering. I particularly like it going into an election year, where our voices add value, and our voices drive traffic."

Although Rick is giving up two of his titles, he's staying chairman, and one of his more fun duties is his involvement with the Kaplan educational division. Most people think of SAT preparations when they think of Kaplan, but Rick says the tests are now less than a quarter of Kaplan's business.

Now there's Kaplan University, which has both a campus-based and an online model. Rick says there are more than 30,000 students studying online in programs ranging from junior college to full bachelor's and master's degrees.

One of his big thrills was to speak at the Kaplan online graduation ceremony, with 2,500 people in the audience but only 300 in the hall. "Everybody who walked across the stage had a story, and it was a story that was different from the traditional education story," he said.

Online education "gives people a second chance, because they may have been detoured on their original educational journey, and it gives people a chance to change their direction in life."

What's the best part of Rick's new job? He gets to play an important strategic role -- on both the editorial and business sides -- and no longer deal with budgets.
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