History of Electronic Transformation in the Story of the San Jose Mercury News

I think I tweeted this article several months ago but I was reminded of it again during a pre-conference session at Tools of Change this morning.  The article from the Columbia Journalism Review is a fascinating tale of how an established media outlet - one in many ways pre-disposed to change - struggled to make the right decisions, the right investments and do these at the right time.

Here are some snips (These are fairly deep in the article - CJR):

By the time William Glaberson of the New York Times came to visit in early 1994, some five thousand new AOL subscribers had signed up to receive Mercury Center. The number, Glaberson noted, represented less than 20 percent of AOL’s subscribers in the Bay Area and less than 2 percent of the Merc’s readers. But Glaberson’s report in the Times was all that Ingle, Mitchell, and their staff could have asked for. Even with new sites at the Chicago Tribune, Gannett’s Florida Today, and a handful of other papers, it had taken less than a year for Mercury Center to emerge as arguably the most ambitious experiment in how to weave the new technologies into an existing news operation.

It was not only the volume of services that set it apart, but the extent to which the electronic services so dramatically expanded the definition of what it meant to be in the news business. Mercury Center, Glaberson noted, had carried an online chat with San Jose’s mayor, offered its telephone-only subscribers recordings of Martin Luther King Jr.’s speeches, posted press releases (much to the newsroom’s consternation), and had also made available archives of all stories that had appeared in the newspaper since 1985. The archives, which came with an additional fee, had proven to be particularly popular. Ingle had thought their greatest appeal would be to schoolchildren working on reports. But the traffic was heaviest during the day, suggesting that the biggest users were business people eager for information about their industries and competitors.

Ingle told Glaberson that he was envisioning a new breed of journalist, dispatched with the sort of equipment that would allow filing in all sorts of ways, not merely for print. He called them “multimedia reporters.” Still, for the print side, the connection between the newspaper and Mercury Center involved little more than the addition of codes at the bottom of printed stories, so that readers could log on, or call in, for more. Some reporters had begun online conversations with their readers (everyone was asked to respond to reader e-mails). Others told Glaberson they saw the back and forth as peripheral to their work.
.....

Christensen, a devout Mormon, was staking out a position that bordered on business heresy. In the face of disruptive technology, he wrote, the wise course was not to react to the demands of existing customers. It was imperative to lower revenue expectations for the products spun off by those new technologies. And it was essential to accept the inevitability of failure. If sustaining technology brought reassurance, disruptive technology sowed doubt.

Yates had been with Knight Ridder long enough to recognize how much Christensen’s case mirrored what had taken place at her company. Knight Ridder, under Jim Batten, had ended the Viewtron experiment because the market was judged too small and the cost too high. But now Christensen was presenting an argument suggesting that, in essence, the company had had it all wrong—that because it had lost so much money it could not appreciate that Viewtron did, in fact, serve a market, albeit a small one that could, over time, develop into a far larger one, once the technology became cheaper, accessible, and efficient. Once the personal computer with a high-speed modem became a household fixture, the newspaper would cease being the best way to read, and more importantly, to search for jobs, employees, cars, and homes. That was the moment of disruption. And when it occurred, the companies that had been cultivating their shares of the emerging markets found themselves no longer at the periphery, but, like eBay, in a position to dominate a market that, not so long before, did not appear to exist.

As if by chance, Ingle had in 1990 come upon the very corrective in Mercury Center that Christensen would prescribe seven years later—a small, inexpensive laboratory for trying out those disruptive technologies, a place where modest successes could be celebrated and built upon, a “skunk works” operation that the company could keep running as it waited to see whether the new markets might emerge, or existing ones catch up.

Note: Christensen wrote The Innovators Dilemma which was also specifically referred to this morning.